Tuesday, December 31, 2019

People expecting inheritances ask mean-spirited questions of financial planners, and some make it to Smart News

Marketwatch has some bizarre questions from readers about people’s rights with inherited property or property they expect to inherit.  Some of them sound like they come right out of “Knives Out” (the movie).

Here’s one about someone whose stepfather inherited his mom’s house (normally) but then remarried.  Can this person kick out the second wife after the stepfather dies?

It sounds like a mean question. Quentin Fottrell thinks so. 

The story was on Smart News today.

Maybe not such a happy new year. 

Tuesday, December 24, 2019

Seniors and even heirs getting into trouble with reverse mortgages

Nick Penzenstadler has been reporting in USA Today about many problems with reverse mortgages, such as an article now about clumsiness heirs experience with banks even when they want to pay them off, story here
Customers in lower income neighborhoods have been losing homes, especially since 2008, for minor problems (like not paying insurance premiums) after homes might have lost value. 

Monday, December 16, 2019

The "Bail-in" issue and bank deposit safety; "structuring violations"; grantor trust abuse

I still see occasional stories from mostly right-wing sites and papers that it’s dangerous for retirees to depend on banks, and that gold and silver or maybe even cryptocurrency is somehow safer (the way having a mountain ranch with plenty of guns is safer).

John Lawrence had written a story in 2015 for the San Diego Free Press,  explaining the process of going from “bail-out to bail-in” (post 2008), where a bank bails itself in by seizing deposits and letting the FDIC pay depositors up to $250000 – and warning that in an emergency the solvency of the FDIC could be in question. This was based on an IMF article in 2012 

The GSI Exchange, which trades precious metals, had made similar claims at the end of 2018 with less detail. 

Retirees will sometimes see spam-like emails warning them of these risks, and these could introduce malware.

Perhaps some investors could become concerned over instability arising from Trump’s recklessness, which could lead us into war – and the uncertainty about impeachment and the 2020 elections. 

Congress as a whole seems to remain reckless about debt ceiling and government shutdown issues.

The other big risk to some investors comes from asset forfeiture laws that allow seizure of money when money laundering us suspected, and when “structuring violations” (intentionally breaking large deposits down below $10000 per transaction to obscure the transfers) are suspected, as in this Forbes story.

Trustees of inheritances should be careful about misusing funds still in the name of the deceased trust (especially after merging into grantor trusts).  The deceased funds are not “yours” to do what you like with until properly distributed to “your” name. Typically they can be used to settle debts, pay for housing and provide supplemental health and dental care, but not for entertainment or unusual investment schemes.  Beneficiaries can sue trustees over these issues.

These concerns do play into the Left's conceptual challenges to the morality of "capitalism" on a personal level and accumulating wealth without working. 
NBC News has provided a story warning retirees of imposter scams, needs purporting to be from distant friends or relatives. 

Friday, December 06, 2019

Could inheritances be targeted for reparations taxation?

Should taxes on inheritances be entertained for the idea of paying reparations to some descendants of (black) slaves and, in some circumstances, indigenous peoples?

A paper in Qz in June 2017 by Chuck Collins at least makes a case, and mentions inheritances specifically toward the end of the article.  His suggested floor of exposure to additional tax (to non-black, non-indigenous) households is $5 million, still the general floor today.

His moral arguments are well articulated, and mention historical precedent examples of the Japanese internment during WWII, as well as Holocaust survivors. 

The Guardian has a June 2019 piece with opposing views by Ta-Nrhisi Coates and Coleman Hughes.
I am struck in my own life with the idea that inherited wealth is not as “valuable” as wealth that had been earned by one’s own labor, and typically there are strings attached or limitations in many trusts and probate outcomes.  I have been around SJ activism in the past that wanted to get rid of all inherited wealth.  Yet, the idea of “generational wealth” got mentioned at least once on Donald Trump’s “The Apprentice” series 15 years ago.

Monday, December 02, 2019

NYTimes opinion piece shows how difficult Alzheimer's can be for other family members, even when largely behavioral

Jeneen Interlandi exposes “The Unending Indignities of Alzheimer’s” on p. A26 of Monday’s New York Times, as “editorial observer”.  This essay has been reproduced on many blogs and websites in full.

She presents a narrative about her father who, at 78, is diagnosed mainly because of behavioral problems, which actually got him kicked out of a senior center and which now mean he has to have 24-hour supervision.  But because he can dress himself and do some functions, the family can’t get indirect Medicaid payments which, in New Jersey, is managed by third party companies and insurance agencies for nursing homes.  I worked (for Bradford) on Medicaid MMIS for New York in the 1970s and I don’t recall a mechanism like this.

There could be a danger that a senior whose behavior is just eccentric or who is overwhelmed with housekeeping could be considered to present a problem for others in a community. 

My own mother was officially diagnosed by the neurologist (who was an O.D.) in the last year of her life (passed away at 97 in 2010) and one scan showed some plaque, but I believe most of her problems, which came on in the last two years of life, were due to congestive heart failure and aortic stenosis.