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Recent Successes And News: Month: April 2020
Should Seniors Who Lose Their Job During the Coronavirus Pandemic Claim Social Security Benefits Early?
In the wake of the coronavirus pandemic, unemployment is skyrocketing. Seniors who lose their jobs may be tempted to claim Social Security benefits early, but should they, given the resulting reduction in future benefits? The answer depends on your situation, but you may be able to claim and not sacrifice much in terms of future benefits.
While you can claim Social Security benefits as early as age 62, the better financial decision is usually to wait to take benefits as long as you are able. If you take Social Security between age 62 and your full retirement age, your benefits will be permanently reduced to account for the longer period you will be paid. Individuals who file at age 62 this year will receive 72 percent of their full benefit. On the other hand, if you delay taking retirement beyond your full retirement age, depending on when you were born, your benefit will increase by 6 to 8 percent for every year that you delay, in addition to any cost of living increases. This extra income could be very welcome, especially if you live into your 80s or beyond.
Unfortunately, many seniors who lose their job due to the coronavirus pandemic may find it necessary to apply for benefits early, potentially losing hundreds of thousands in future benefits. Before rushing to apply for early retirement benefits, you should consider all of your options. If you are lucky enough to have substantial savings, it may make sense to spend your savings rather than take benefits early. You may also be able to apply for unemployment benefits to allow you to further delay taking benefits.
If you do not have any savings or unemployment benefits to fall back on, your only option may be to claim benefits. However, if you do claim early and then go back to work, you may have the ability to increase those benefits. If you are able to stop the benefits within 12 months of starting, you can withdraw the application, repay the benefits collected, and then still be eligible for the higher benefit amount at full retirement age or older. It is essentially a one-year interest-free loan. For more information, click here.
If you take benefits early but are not able to stop the benefits within 12 months of starting, you can still suspend your benefits in order to earn higher benefits. For example, if you start collecting at age 62 but no longer need the income once you reach your full retirement age, you could suspend benefits until age 70. You won't get a complete do-over, but between your full retirement age and 70 you would earn delayed retirement credits, which would increase your ultimate benefit amount when you collect at age 70.
Whatever you decide, consider all of your options carefully before making any rash decisions.
For a New York Times article about taking benefits early, click here.
For more about Social Security, click here.
Attorney Doris Gelbman assists a client with a document execution. Photo: Megan Flowers
As the COVID-19 pandemic continues to spread through the country, more people are realizing the importance of getting their estate planning documents in order. Those over age 60 are particularly at risk for developing complications from the novel coronavirus infection. Having in place documents — including a durable power of attorney, a health care proxy, a medical directive, a HIPAA release and a will — is essential in the event that illness strikes.
Although planning one’s estate is a top priority, people don’t want to put themselves or others at risk while doing it. Elder law and estate planning firms across the U.S. are well aware of this concern – both for their clients and their own staff — and have devised creative solutions for clients to execute their documents while limiting or eliminating contact between participants. Strategies include the drive-up solution, taking special precautions with office meetings, and (in some states) executing the documents remotely.
The Drive-Up Solution
This method involves all parties driving to a parking area – perhaps a lot adjacent to the attorney’s office, the client’s driveway, or an assisted living facility parking lot. At a minimum, the attorney and client will need to be present, although witnesses and/or a notary may also be required, depending on the document being executed and state law. One person, usually a law firm staff member, takes documents from car to car so the parties can roll down their windows and sign with minimal contact. Everyone can bring antibacterial wipes with them to clean their hands after the document execution has been completed. It’s unorthodox but it works and keeps everyone safe.
The Charlottesville, Virginia, firm of Gelbman Law PLLC has started using the drive-up approach for signings (see photo). In Virginia, a will must be notarized and witnessed by two individuals, which could make for a crowded and unsafe condition if the signing is done indoors.
“We started thinking about how we could safely accommodate our clients, who are almost all elderly and at greater risk, and so the idea of drive-up will signings seemed like the safest move,” firm principal Doris Gelbman told The Daily Progress, a local newspaper. “I would say that, uniformly, our clients have been appreciative that we’re taking these safety measures.”
It's also possible to employ the drive-up method without an intermediary shepherding documents between vehicles. Patricia D’Agostino of the Massachusetts elder law firm of Margolis & Bloom described in a recent firm blog post the three-car process she used for a signing that required witnesses and a notary:
I served the notary from my car, [the two witnesses] were witnessing from their car and the client was in his car in the middle. We were all on our conference line to communicate. The client showed me his driver's license through the car window. We had already sent the original documents to the client by Federal Express and I had copies. After the client signed the documents, he placed them outside of his car and when he was back in his car, I got out and put them in my backseat. I’ll leave them there for a few days to be safe before we process them. Since our understanding is that the coronavirus dies out on all surfaces within three days, [the witnesses] will be able to witness the documents and I will be able to notarize them at a later date.
Some firms are using still another variation of the car method: the attorney drives to the clients’ house and from the car witnesses them signing the documents on their porch.
Meeting at the Office
In cases where the physical law office remains fully or partially open, some firms are executing documents in the office but taking precautions to social distance and to make the process go quickly.
The firm may use a large conference room – or perhaps several separate rooms – to prevent close contact between the parties. All surfaces are thoroughly sanitized, pens not shared, and careful hand-washing encouraged both before and after the document execution process. Gloves may be used by everyone to avoid contact.
Many firms spread out appointment times – perhaps even scheduling them in the evening or on weekends – to keep the number of people in the office at one time to a minimum. Key to safe in-office signings is for the clients to review the documents thoroughly and communicate any concerns by phone or video conference before physically meeting so the document execution can be completed as quickly as possible.
Like everything else these days – work, schools, doctor visits, birthday parties, and more – document execution is also going digital during the COVID-19 crisis. Details of elder law and estate planning documents can be worked out over the phone or through video conference calls or email exchanges. When everything has been prepared successfully, the actual document execution may be able to take place online. In some states, such as Florida, legislation has already been enacted to allow parties to conduct document executions virtually through Zoom, Google Duo, or other virtual platforms. In the wake of the pandemic, New York State now allows for video notarization. A number of other state legislatures are moving towards passing similar temporary laws so that clients can seamlessly execute their estate planning or other documents without endangering themselves or their attorneys.
No one wants to think about death or incapacity, and people come up with many reasons to put off planning their estates. But in this unprecedented health crisis, worries about the safety of executing essential documents should not be a factor in the decision.