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Estate planning

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Prominent Benefits Attorney Morton ('Mort') Harris, 81, Dies
"Morton Harris, 81, died Monday August 3, 2015 at St. Joseph's Hospital in Atlanta, Ga.... Morton was a partner in the law firm of Hatcher, Stubbs, Land, Hollis & Rothschild, LLP and practiced law in Columbus [Georgia] for over 50 years specializing in tax, business, employee benefits, estate and trust law. He received numerous honors and awards throughout his career [including] ... Fellow, American College of Tax Counsel, Fellow, American College of Trust and Estate Counsel, [and] Fellow, American College of Employee Benefits Counsel[.] ... An active participant in community affairs, Morton served as a Trustee of the City of Columbus Pension Board[.]" (Columbus Ledger-Inquirer)
[Guidance Overview] Supreme Court Rules Part of DOMA Unconstitutional; Employer Action Steps Suggested
"[T]here are at least five steps that any affected employer should now be considering: [1] Stop imputing income for federal income and FICA tax purposes on health plan coverage provided for a same-sex spouse, but continue imputing income for state income tax purposes if the employee resides in a non-recognizing state; [2] Communicate the Supreme Court's decision to employees, and request that any employees in same-sex marriages that may not be known to the employer identify themselves; [3] Offer a mid-2013 enrollment right under welfare plans for same-sex spouses not previously eligible; [4] Identify all employee plan provisions that may be affected by a changed definition of the term 'spouse'; [and] [5] Identify all past and present employees who are in a same-sex marriage." (The Wagner Law Group)
Current Challenges and Best Practices Concerning Beneficiary Designations in Retirement and Life Insurance Plans (PDF)
"The complexity of the rules under ERISA may, in some cases, lead to beneficiary designations that do not accurately reflect the participant's intent, and can frequently result in disputes over who is entitled to ERISA plan benefits following the death of the participant.... [E]ven when the beneficiary designation correctly indicates the participant's intent, beneficiaries may be unaware of what to do to obtain the benefit or to determine the benefit to which they are entitled.... The Council is examining this topic and intends to draft recommendations to the Secretary of Labor for consideration." (2012 ERISA Advisory Council)
[Guidance Overview] Despite Husband's Beneficiary Designation, Second Wife Not Entitled to Annuity When Husband Never Divorced First Wife
"If the participant never divorced his first wife, then she would be his surviving spouse under the plan. As such, her status as the participant's surviving spouse would take precedence over the participant's express election of the second wife as his spouse and beneficiary. This is because the first wife never waived her rights to receive spousal benefits as required by ERISA Section 205." (Wolters Kluwer Law & Business / CCH)
ERISA Advisory Council to Examine Disability Coverage, Retirement Income and Beneficiary Designations (PDF)
"[The Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) [meeting] will be held on June 12-14, 2012 [in] Washington, DC].... The Advisory Council will study the following issues: (1) Managing Disability Risks in an Environment of Individual Responsibility; (2) Current Issues Regarding Income Replacement During Retirement Years; and (3) Current Challenges and Best Practices Concerning Beneficiary Designations in Retirement and Life Insurance Plans." (Employee Benefits Security Administration)
Text of GAO Testimony on Role of Federal Government in Promoting Financial Literacy Among Americans
"This testimony discusses (1) the federal government's role in promoting financial literacy, including GAO's role; (2) the advantages and risks of financial literacy efforts being spread across multiple federal agencies; and (3) opportunities to enhance the effectiveness of federal financial literacy education efforts going forward. This testimony is based on prior and ongoing work, for which GAO reviewed agency budget documents, strategic plans, performance reports, websites, and other materials; convened forums of financial literacy experts; and interviewed representatives of federal agencies and selected private and nonprofit organizations." (Government Accountabilty Office)
[Guidance Overview] Deceased Participant's Estate Can Sue to Recover Benefits Paid to Ex-Spouse
"The Third Circuit Court of Appeals ruled that ERISA does not bar the estate of a deceased 401(k) plan participant from suing the participant's ex-spouse to recover benefits distributed to her as the named beneficiary where she previously waived the right to those benefits as part of their divorce decree. The case is the first in which a federal Court of Appeals has addressed the issue." (Deloitte)
Investment Costs Hit Retirees Twice
"[I]t's as critical for retirees (people spending money) to think about how costs hit their portfolios as it is for people who are still saving. In fact, you might say that by taking a bite out of both income and wealth over time, costs actually hit retirees with a 'double whammy.'" (Vanguard)
IRS Ruling on 401(k) Deferred Annuities Balances Spousal Rights and Employer Burdens
"Employers may immediately rely on Rev. Rul. 2012-3, which is part of a broader effort to encourage lifetime retirement income options. The conclusions reached about different annuity designs reflect regulators' efforts to preserve spousal rights without unduly burdening plan administrators." (Mercer)
Financial Planning on a Limited Budget
"There are a crop of new resources that let you get financial-planning services on the cheap. For a flat or hourly fee, a certified financial planner can help you develop a savings plan, get your budget in order and pay down debt. But keep in mind that you get what you pay for -- so don't expect any of the bells and whistles of a full-service financial-planning or brokerage firm." (The Washington Post; free registration required)
[Opinion] ACLI Letter to the SEC on the Dodd-Frank Act Study on Financial Literacy among Investors (PDF)
"ACLI supports cost-effective initiatives enabling informed decision-making in the purchase of financial products and services. Enhancements to investors' financial literacy will help Americans achieve financial and retirement security. The three core elements of the Study -- improving disclosure, enhancing financial decision-making, and increasing transparency -- provide a meaningful framework for constructive improvement. ACLI has actively participated in numerous regulatory projects designed to enhance disclosure, spotlight expenses or conflicts, and buttress decision-making by consumers." (American Council of Life Insurers)
Ensure your Plan Participants are Prepared for a Secure Retirement
Defined Contribution Conference, March 11-13, in Miami. Learn from your peers through presentations and discussions on plan design, communications, investment options and more. FREE registration for qualified plan sponsors. (Pensions & Investments)
[Guidance Overview] Treasury Proposes New Rules for Annuity Options in Retirement Plans
"The proposed rulings give clarification on the rules that apply when employees are given the option to use a single-sum 401(k) payout to obtain a low-cost annuity from their employer's defined benefit pension plan. A second ruling clarifies that employers can offer their employees the option to use 401(k) savings to purchase deferred annuities and still satisfy spousal protection rules with minimal administrative burdens." (AccountingWEB)
Congress Eyes New Rules for Inherited IRAs
"A Senate Finance Committee proposal floated this past week as part of a highway-funding bill would give heirs five years to empty inherited individual retirement accounts or 401(k)s, which would typically trigger income-tax payments. The rule change could raise some $4.6 billion in income taxes over the next decade, according to a statement by Sen. Max Baucus (D., Mont.), chairman of the Senate Finance Committee." (The Wall Street Journal)
Highlights of Forum on Financial Literacy: Strengthening Partnerships in Challenging Times (PDF)
"On October 20, 2011, GAO convened a select group of leaders and experts for a forum to discuss key issues related to financial literacy. These participants, which included representatives of federal, state, and local government agencies; academic experts; nonprofit practitioners; and representatives from the private sector, were selected to represent a range of viewpoints and draw from a variety of backgrounds." (U.S. Government Accountability Office)
Multi-Generational Views on Family Financial Obligations:Survey of Baby Boomers and Members of Generations X and Y (PDF)
"[T]his research suggests that Americans' desire to give is strong, but not limitless, and the money provided as a gift or for help with specific financial issues, or any other type of non-financial assistance, tends to be seen as a reflection of caring and love between family members, rather than as a familial mandate or unspoken contract." (Metropolitan Life Insurance Company)
Americans Want to Save for Retirement and for Survivors
"According to the Multi-Generational Views on Family financial Obligations: A MetLife Survey of Baby Boomers and Members of Generations X and Y, nearly four in five (78%) survey respondents believe there is an obligation to provide a for a surviving spouse if one dies unexpectedly." (PLANSPONSOR.COM)
Pitfalls of Inherited IRAs
"If you are the guardian of a child who inherits such an account, you should consider moving the assets into an inherited IRA for the child rather than simply withdrawing the money and paying a sizable chunk of the inheritance in taxes upfront, says William Schmidt, an estate-planning attorney at Schmidt & Federico in Boston." (The Wall Street Journal)
[Guidance Overview] The Constitutionality of the Defense of Marriage Act is Questioned in an ERISA Case
"This is not the only case where the constitutionality of DOMA is under consideration. Given the developing patchwork quilt of state and local domestic partner laws, this uncertainty about the constitutionality of DOMA leaves employers struggling not only to comply with the law, but to figure out what the law is in the first place." (Porter Wright Morris & Arthur LLP)
Tax Benefits and Allocation Issues in Rollovers to Roth IRAs
"The goal of this analysis is to provide practitioners with an overview of the potential retirement and estate planning benefits of rollovers from a 401(k) plan into a Roth IRA, as well as to alert practitioners to the impact that common 401(k) plan distribution rules will have on the tax benefits of such a rollover in light of the current IRS allocation rules." (Texas Tax Lawyer via Haynes and Boone, LLP)
Retirement Beneficiary Designations: Getting the Right Assets to the Right People
"According to the Wall Street Journal, 401ks and IRAs account for about 60 percent of the assets of U.S. households investing at least $100,000. Both state and federal laws affect to whom these assets may go, and the results can be complicated, especially when the owner of the account has been divorced and remarried." (, LLC)
[Guidance Overview] Sub-IRAs Created by Trustee-to-Trustee Transfer Were Inherited IRAs
"Two sub-individual retirement accounts (IRAs) created by a trustee-to-trustee transfer for two non-spousal beneficiaries who acquired their sub-IRAs because of their parent's death are inherited IRAs within the meaning of Code Sec. 408(d)(3)(C), according to an IRS letter ruling." (Wolters Kluwer Law & Business / CCH)
Recent Changes in Tax Code Allow Investors with Huge 401(k) Accounts to Turn Them into Tax-Free Income for Grandchildren's Lifetimes
"This massive estate-tax break was created last year in two steps. First Congress lifted a $100,000 income restriction on who can convert a 401(k) or IRA to a Roth IRA . . . . Then late in the year, it raised the generation-skipping transfer tax exemption (GST) to $5 million until 2013." (The Washington Post; free registration required)
Family Feuds: The Battles Over Retirement Accounts
"As the amount of money stashed in 401(k)s and individual retirement accounts has grown, more and more families are finding themselves locked in battles over who has rights to the assets, especially in cases involving divorce and remarriage." (The Wall Street Journal)
Article on the Plan Document Rule Under ERISA
"[The target page presents the introduction to a recent comment] entitled When Happily Ever After is Not Ever After, After All: Rectifying the Plan Documents Rule Under ERISA to Benefit the Right Person." (Wills, Trusts & Estates Prof Blog)
GAO Correspondence: Cost and Legal Authority for Selected Financial Literacy Programs and Activities (PDF)
"Based on ongoing congressional interest, the enclosure to this letter provides a summary description, statutory or other legal authority, and appropriation or estimated cost for 13 selected financial literacy programs and activities in 10 federal agencies." (U.S. Government Accountability Office)
GAO Report: A Federal Certification Process for Financial Literacy Providers Would Pose Challenges
"Financial literacy program evaluations are most reliable and definitive when they track participants over time, include a control group, and measure the program's impact on consumers' behavior. However, such evaluations are typically expensive, time-consuming, and methodologically challenging." (U.S. Government Accountability Office)
ERISA Preemption and Beneficiary Designation Forms
"The circuit courts are split as to whether ERISA preemption would require benefits to be paid to the estate or state law doctrines would allow the beneficiary designation form to be honored." (Employee Benefit News; free registration required)
An In-Depth Look Into Intergenerational Flows
"The goal of this paper is to carefully document the characteristics of within-family monetary transfers in the United States, using all nine waves of the Health and Retirement Study (HRS)." (Center for Retirement Research at Boston College)
When Is ERISA Preemption Permitted: Beneficiary Designation Forms
"The circuit courts are split as to whether ERISA preemption would require benefits to be paid to the estate or state law doctrines would allow the beneficiary designation form to be honored." (Employee Benefit News; free registration required)
[Guidance Overview] Beneficiary Designations Under Qualified Plans
"A fundamental question for any Plan's beneficiary designation form relates to whether spousal consent must be obtained for a participant to name a nonspouse beneficiary." (Foster Swift Collins & Smith PC)
[Guidance Overview] Court Rules That Plan Owners Must Get Consent of Spouse to Pass Wealth to Children
"The court determined that under the terms of the participant's plan, a spouse's right to plan assets is immediately vested upon marriage, and since no spousal waiver was obtained, the default beneficiary is the spouse, even though she was not the named beneficiary." (Investment News; free registration required)
Even Beneficiary Designation Forms Can Create Significant Issues for Benefit Administration
"Employee benefit administrators, 401(k) vendors, recordkeepers and benefits professionals regularly recommend that participants in qualified retirement plans periodically review and update their beneficiary designation forms." (Employee Benefit News; free registration required)
[Guidance Overview] Court Says Spouse Trumps Beneficiary Designation of Children
"A federal court has granted retirement plan benefits of a deceased participant to his spouse, even though he had listed his children as beneficiaries on the plan's designation form." (PLANSPONSOR.COM)
[Guidance Overview] Court Denies Mother's Claim to Deceased Son's Benefits
"A federal court has upheld an employer's decision to grant death benefits to the beneficiary designated by a former employee, though his mother claimed he was unduly influenced." (PLANSPONSOR.COM)
[Guidance Overview] Beneficiary Designations Under Qualified Plans
"There have been many changes in federal pension law that have an impact on a participant's beneficiary designation form. Beneficiary forms drafted even a few years ago may be outdated and not compliant with current law." (Foster Swift Collins & Smith PC)
Celebrate Financial Literacy Month
"April marks the beginning of Financial Literacy Month, a time during the year when we can all take a few minutes to brush up on our financial knowledge to make the most of our money." (WISER)
Long-Term Care Insurance: A Piece of the Retirement & Estate Planning Puzzle (PDF)
"Specifically, the study measures attitudes towards and knowledge of long-term care insurance among Americans. The survey also explores concerns about needing extended care services, confidence in being able to pay for such services in the future, perceived methods of funding the expenses associated with long-term care, and the misperceptions about and barriers to purchasing long-term care insurance." (The Prudential Insurance Company of America)
[Guidance Overview] Same-Sex Domestic Partners Added to Federal Employees' Annuitant List
"Same-sex domestic partners have been added to the list of annuitants who are eligible to receive a survivor annuity under the federal employees' retirement program, according to new proposed regulations from the Office of Personnel Management . . . ." (Wolters Kluwer Law & Business)
Financial Planning Technology As an Employee Benefit
"It can lead to adverse consequences for both well-intentioned employers and financial do-it-yourselfers that use financial planning software without a certain amount of knowledge or the inability to see the bigger financial picture." (Employee Benefit News; one-time free registration required)
Wealth, Financial Literacy and Schooling
"The estimates of the impact of financial literacy imply that investments in financial literacy could have high payoffs in terms of enhanced household wealth." (Teachers Insurance and Annuity Association - College Retirement Equities Fund)
Americans' Financial Capability
"Financial capability is measured in terms of how well people make ends meet, plan ahead, choose and manage financial products, and possess the skills and knowledge to make financial decisions." (The Pension Research Council; registration required to download papers)
GAO Concludes Existing Regulation Covers Financial Planners
"[The GAO] recommended that the National Association of Insurance Commissioners . . . assess consumers' understanding of the standards of care associated with the sale of insurance products and that the SEC determine how well investors understand financial planners' titles and designations." (American Institute of Certified Public Accountants)
Consumer Finance: Regulatory Coverage Generally Exists for Financial Planners, But Consumer Protection Issues Remain (PDF)
"This report examines (1) how financial planners are regulated and overseen at the federal and state levels, (2) what is known about the effectiveness of this regulation, and (3) the advantages and disadvantages of alternative regulatory approaches." (U.S. Government Accountability Office)
How Important Are Inheritances for Baby Boomers?
Excerpt: "This study quantifies the aggregate amount of inheritances that baby boomers ? those individuals born between 1946 and 1964 ? can expect to receive over their lifetimes, and the distribution of past and prospective receipts by household type." (Center for Retirement Research at Boston College)
How Important Are Intergenerational Transfers for Baby Boomers?
Excerpt: "We estimate that two-thirds of boomer households will receive some inheritance over their lifetime, with a median amount of $64,000. The estimates are based on data obtained before the economic crisis, so our analysis explores how the collapse in the stock and housing markets might affect the picture." (Center for Retirement Research at Boston College)
[Guidance Overview] Provisions in The Senate's Tax Cut Extension Bill
Excerpt: "Other expired and expiring provisions that would be extended through 2011 by the bill include: . . . IRC ? 132 parity for exclusion from income for employer-provided mass transit passes and parking benefits . . . . IRC ? 408(d)(8) allowance for tax-free distributions from individual retirement plans for charitable purposes." (Journal of Accountancy)
[Guidance Overview] Child Loses Battle over 401(k) Distribution Taxes
Excerpt: "A federal court has upheld a lower court ruling that the minor child of a woman who pleaded guilty to killing the child's father is liable for federal income tax on a 401(k) distribution from his father's account." (PLANSPONSOR.COM)
Trends in Employee Financial Issues (PDF)
16 pages. Excerpt: "The tide has shifted, and never before have we seen so many employees focused on long-term planning. In Q3 2010, more than 1 in every 4 calls into our Financial Helpline was related to retirement planning, and in total, over 60% of employee interactions involved discussions surrounding long-term planning issues. This gives us the impression that employees are beginning to regain confidence in their overall financial picture." (Financial Finesse, Inc.)
How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors (PDF)
29 pages. Excerpt: "Two competing explanations for why consumers have trouble with financial decisions are gaining momentum. One is that people are financially illiterate since they lack understanding of simple economic concepts and cannot carry out computations such as computing compound interest, which could cause them to make suboptimal financial decisions. A second is that impatience or present-bias might explain suboptimal financial decisions. That is, some people persistently choose immediate gratification instead of taking advantage of larger long-term payoffs." (University of Michigan Retirement Research Center)
Americans Want More Financial Education, According to Survey
Excerpt: " When asked to rank the importance of understanding their own personal finances, nearly 8 in 10 respondents (79%) gave it a 7 or above on a scale of one ('what I don't know won't hurt me') to 10 ('I feel the need to know all I can about my financial situation'), according to a press release." (
Retirement Planning Most Difficult Financial Task, According to Recent Study
Excerpt: "A news release about the poll of more than 4,000 U.S. households said many investors are taking over the responsibility for their own financial planning, but many don't know enough to make informed choices." (
Improving Employees' Financial Literacy
Excerpt: "While many employers offer some form of investment advice, a recent national survey shows that employees are slow to tap that expertise. One Minneapolis-based construction company has been able to better connect with employees by hosting a series of financial workshops." (Workforce Management; free registration required)
[Guidance Overview] Ex-Wife Entitled to 401(k) Account Balance
Excerpt: "In finding that [the ex-wife] was entitled to the money, [the judge] pointed out that the Supreme court ruled that [ERISA] does not bar common law waivers but plan administrators are nevertheless bound by the plan documents if such waivers conflict." (planadviser)
Retired and Broke: Why Retirees Are Declaring Bankruptcy
Excerpt: "For more and more seniors, retirement doesn't mean a debt-free life of leisure. An increasing number of Americans aged 65 and older are declaring bankruptcy, according to a recent study by [a] professor of law at the University of Michigan Law School." (Reuters)
Boomers' Shrunken 401(k)s Spark Interest in Reverse Mortgages
Excerpt: "Ten years ago, reverse mortgages were primarily used by widowed or single women well into their 70s with little other means of retirement income. Now, big losses to retirement savings as a result of the financial crisis have stoked interest among younger retirees of both sexes." (Businessweek)
[Official Guidance] Brief for Secretary of Labor as Amicus Curiae Supporting Defendant-Appellee, Metropolitan Life Insurance Company
Excerpt: "The question presented in this case concerns whether, in light of the decision in Kennedy v. DuPont, 129 S. Ct. 865 (2009), holding that plan administrators must distribute benefits to beneficiaries in accordance with plan documents, ERISA allows a plan administrator to disregard a validly-executed beneficiary designation because the plan lacks a formal procedure through which a designated beneficiary can refuse benefits." (U.S. Department of Labor)
[Opinion] What Effect Will Defense of Marriage Act Cases Have on Benefit Plans?
Excerpt: "Although numerous federal laws are affected by the definition of a spouse, of particular note are those statutes affecting surviving spousal benefits, spousal consent requirements, qualified domestic relations orders, COBRA, flexible spending accounts, and taxation of medical benefits. Under Gill, a plan would be required to recognize the rights granted to a spouse under the relevant statutes." (Tax Management Inc.)
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