Special Circumstances Flashcards
Community Property States
all property accumulated DURING the marriage is is divided in half
Equitable Division Law excludes what
certain property is owned separately by spouses and not subject to division like gifts, inheritances, property owned prior to marriage
Need for support =
total financial needs of the spouse - income (income from separate and marital property, from actual and imputed employment, income from any other source)
What is used to divide retirement assets
Qualified Domestic Relations Order
What plans are not covered by QDRO
military and government retirement plans
Do you need a QRDO for an IRA transfer?
No - but rollover rules apply if distribution not placed in recipients account within 60 days
Is alimony tax deductible for the payor?
No
Is alimony recorded as income for the receiver?
No
Is child support tax deductible or reported as income?
No
How do you qualify for Social Security Disability?
if you can’t perform any Significant Gainful Activity. Disability must be expected to last at least 1 year or result in death
What is the other option for disability besided Social Security Disability?
Private or employer provided disability insurance
Elimination period for SSDI
5 months
Supplemental Needs Trust is for whom
for disabled individual - won’t jeopardize eligibility for Medicaid/Medicare, SSDI and other Govt benefits
What can help a terminally Ill person receive funds
Accelerated Death Benefit or Living Benefits Endorsement - can receive part of death benefit early
Viatical Settlement
Viatical Settlement
assign ownership of life insurance to viatical settlement company - receive tax free percentage of death benefit
Do unmarried couples receive SS survivor benefit?
No - don’t get Medicaid coverage for partner’s nursing home stay either
Nontraditional Couples should have what paperwork
domestic partner agreement, wills, health care proxy and power of attorney
Withdrawing from a 401k Age 59 1/2 rule as well as what
if you are 55 and older and get fired you withdrawal w/o the 10% penalty
Percentage state unemployment insurance pays
typically 50% - benefits paid for 26 weeks
How long can you receive unemployment insurance?
26 weeks - unless during periods of high unemployment
Other short term unemployment benefits employers made provide
life insurance, pension credit, long/short term disability credit, tuition reimbursement, vacation accrual
Documents available to protect special needs children
power of attorney, guardianship choices, wills, special needs trusts
Government benefits for special needs children
government offsets in social security disability, medicaid
Should you leave assets directly to a special needs child?
No - do not name the child direct beneficiary of LI policy, annuity or retirement plan
What is an advantage of taxing a windfall upfront?
Taxes can be paid from the lump sum instead of from the owner’s estate
What part of Life Insurance proceeds could be taxable?
If the beneficiary takes annuity payments
How is property transferred between spouses or former spouses treated incident to a divorce?
Property is treated as if it were acquired by a GIFT 🎁 - the transferor BASIS in the property is CARRIED OVER to the transferee
What is the FIRST thing you should do after being laid off?
File for unemployment since there is a 1 week waiting period
Do you have to notify the bank holding your mortgage if you get laid off?
Not necessarily - you may have enough $ from unemployment to pay the mortgage
Are living wills recognized in all states?
NO
Does power of attorney allow that person to make decisions before youre incapacitated?
Yes. As soon as it goes into effect they can make decisions whether or not you’re incapacitated
Excess alimony payments that are subject to recapture, are they taxable?
Not taxable to the RECIPIENT
Are child support payments deductible to the Payor?
No
Alimony is deductible to who and taxable to who
deductible by the payor and taxable to the recipient
Property settlements and child support in divorce settle how
property settlements and child support are not deductible by the payor and are not taxable to the recipient
What is most difficult to split up in divorce
defined benefit plans because they pay out in the future
How to typically value a define benefit in a divorce
if its being evaluated as part of a property settlement it will be given a present value
How can a divorcee losing health insurance get coverage?
COBRA - divorce is a qualifying event for COBRA
How long can a divorced spouse get coverage with COBRA
36 months
Divorced spouse may still claim SS how
-married at least 10 years
- divorced for at least 2 years
-may claim SS based on ex-spouse’s earnings
If your ex spouse claims SS benefits does that impact your benefits?
No
Spousal IRA
nonworking spouse can contribute to an IRA based on the taxpayer’s earnings
If spouse participates in employer plan, and files jointly, what can the spouse do?
Make a deductible IRA contribution provided income is below AGI
Intestacy Rights re:nontraditional couples
surviving partner of a nontraditional marriage will often not have rights to a decent’s property if a will is not in place
Tusts do what
-management of property
-accumulation/distribution of income
-distribution of trust corpus to bennys
-withdrawal powers in bennys
Would a trust company provide investment management services?
Yes includes investment management and wealth preservation
Do trust cos offer asset management services?
Yes like bill pay, check writing and other services
Is a trust company a fiduciary?
Yes
