Broker Check

 Social Security Underpaid Widows

          This is the most curious report that the Inspector General of the Social Security Administration has ever issued on a Valentine’s Day.  The purpose of the internal audit was to determine whether the Social Security Administration has adequate controls to inform widows of their option to claim survivor benefits initially and delay applying for their own retirement benefits until age 70, when those benefit might be worth more than their survivor benefits.

          The short answer is NO!  But, it gets worse.  Based upon a random sample, the Inspector General found that 82% of current beneficiaries who are dually entitled to survivor benefits and their own benefits would have received a higher monthly benefit amount if the SSA had informed them of their option to delay their retirement application until age 70.

          The Bipartisan Budget Act of 2015 limited the ability to claim only spousal benefits to those people born before January 1, 1954.  But the law did not alter the ability of surviving spouses to make separate claiming decisions for their retirement and survivor benefits regardless of when they were born.

          Retirement benefits increase 8% per year for every year they are delayed beyond full retirement age up to age 70.  Survivor benefits do not.

          It is not the first time the Office of the Inspector General identified a problem.  In a 2017 report SSA was criticized for not awarding survivor benefits soon enough.

Some States Are Looking To Get Around $10,000 SALT Cap

          NY Governor Cuomo is vetting the idea of replacing the state individual income tax with a state payroll tax on employers.  Also said he will sue the Federal Government challenging the $10,000 cap as unconstitutional.

          California is considering a proposal to set up a state charitable fund that residents can donate to and receive in exchange for their gift a dollar for dollar credit against their state income taxes. 
          Stay tuned!

What You May Have Missed In State Taxation
While The Federal Tax Law Was Passing

New Jersey

          eliminated its Estate Tax but the inheritance tax will still exist.  The inheritance tax is imposed on non-lineal heirs such as nieces and nephews and is not currently subject to adjustment or tied in any way to the federal changes.

New York

          changed its Estate Tax exemption to match the federal estate tax exemption in 2019 calculated on a base of $5 million indexed annuallyfor inflation.  It appears the new base will not automatically increase to match the new federal exemption of $11 million.


          increased its Estate and Gift Tax exemption to $2.6 million in 2018 from $2 million in 2017.  It will further increase to $3.6 million for 2019 and then is scheduled to meet the federal exemption amount in 2020 as indexed annually for inflation.

Planning For Modern Families

          Half of Americans identify as being outside of a traditional nuclear household as defined as composed of a mother, father and 2.2 children.

         The family portrait now presented includes second marriages, same-sex marriages, adopted children and half-siblings.

         A convergence of demographic trends including increased longevity, higher divorce rates, delayed and childless marriages, staying single by choice and multi-national unions has thrown a wrench into the traditional pattern of wealth transfer from grandparents and parents straight down to children and grandchildren.

         Today’s modern families and the professionals who advise them need to plan for complex dynamics yet to come.  Future children and grandchildren, divorces and remarriages, step-children and step-grandchildren, a beneficiary’s untimely death or unforeseen disabilities can all further complicate an already nuanced estate plan.

         It is critical for single and childless individuals, who are growing in numbers and influence, to think carefully about how they transfer the wealth they have accrued.  Single adult women now outnumber married women in the US and they are inheriting and attaining wealth at unprecedented levels.  For this group, all the many kinds of modern families, having assets properly titled with beneficiary designations, having a will and living will and healthcare directive are important first steps.

           If you are interested in following up you should know that Howard Lisch is a lawyer who specializes in wills, estates and trusts. 

          As always, if you have any questions about these or any other matters, do not hesitate to call us.