Mortgage Options

There are many home loan options available to seniors. Some of these options will be immediately familiar, and some will require more research. Here’s a brief summary:

  • Mortgage loan
    A conventional mortgage. The key choices here are the number of years on the loan and the type of rate, fixed or adjustable.
  • Mortgage refinance
    Replacing a current mortgage with a new home loan. When a borrower refinances, he or she is looking to change the rate on the loan, the type of loan, the length of the loan, or a combination of the three.
  • Home equity line of credit (HELOC)
    A revolving line of credit based on home equity. HELOCs are typically used to help finance home improvements, home repairs, or other expenses completely unrelated to a home.
  • Reverse mortgage
    A unique mortgage available only to individuals 62 or older. Reverse mortgages allow homeowners to turn the equity in their homes into supplemental income without the need to sell the home or make new monthly mortgage payments.

Estate Planning and Totten Trusts

The following information has been prepared by an attorney licensed to practice in the State of California. Information may not be directly applicable to residents of any other state. However, the topic considerations should be relevant. All of the information contained herein is to be taken as general information, not legal advice. Use it as a flag to know what you should be looking for when dealing with your estate, or that of your family. For specific questions about an individual situation, you are strongly encouraged to seek the advice of an estate planning attorney in your state.

Prepared for by Clarence H. Schlehuber, Attorney at Law
Carlsbad, California 92008-1703

Estate Planning

Your Estate

At your death, all property that you own is considered to be your estate. Your estate for federal estate tax purposes includes not only the property you own in your own name, but also any joint tenancy property or insurance policies of which you have retained any type of interest. Each state through its legislature has provided for a plan of distribution for those individuals who die without making such a plan in writing. The plan generally provides for some type of equal distribution among lineal descendants, but in certain states, might also include descendants of a predeceased spouse.


All states have a court that is titled "Probate," which is a special court to deal with the handling of one's assets if they become incapacitated or die. In California, if the gross estate of a single person is in excess of $100,000.00 it is subject to probate. Gross estate for this definition does not include any joint tenancy assets, bank accounts with a named beneficiary, or insurance policies with a named beneficiary. In addition, if one is a California resident and married, then those assets which are either in joint tenancy or community property would allow the surviving spouse to avoid probate. The California exemption is for estates in excess of $100,000.00, but if part of the estate is in real estate, then it is possible that some type of summary probate proceedings would have to be established. Once the probate proceeding has been initiated, then known creditors are advised that they must file a claim by mail within four months of the date of the appointment of the personal representative, and in addition, the unknown creditors are notified by publication of a notice in a newspaper in the area where the person died. If claims are not filed in a timely manner, then they will not be considered.

Probate fees in California are set by the legislature, and they provide that both the executor of the estate and the attorney for the executor will be allowed the same statutory fee as follows:

  • 4% of the first $100,000.
  • 3% of the next $100,000.
  • 2% of the next $800,000.
  • 1% on the next $9 million.
  • 1/2% on the next $15 million.
  • For all above $25 million, a reasonable amount to be determined by the court.

In many cases, a family member is named as executor or personal representative and takes a lesser fee or no fee. If they waive a fee, it is often because fees are taxable income, and if they are a beneficiary, most of what they receive as an inheritance is not taxable for income tax purposes. In California, extraordinary fees for the attorney or personal representative may be allowed by the court. Extraordinary services are generally considered to include real estate sales, preparation of federal, estate tax returns or income tax returns. Additionally, if the personal representative has to deal with a special problem such as clearing a nuisance, then that would be subject to extraordinary fees. Extraordinary fees are subject to the scrutiny of the court and must be approved by the court. It is important to note that the statutory fees for a probate estate are based upon the gross estate. This means that if the gross estate has a value of $300,000.00 and is subject to mortgages of $200,000.00 the probate fees would be calculated on the $300,000.00 gross value, not on the $100,000.00 net value. Closing an estate can be time-consuming, and if a probate is necessary, it will take a minimum of six months. Further, since the personal representative can be held personally liable for estate or income tax payments if a pre-distribution is made, usually the estate is not closed until it is certain that all taxes have been paid.

The main disadvantages of probate are that it is a public record which is open to anyone's inspection. Additionally, in those estates in which there are no creditors claims or taxes due, probate takes time and expense that could be avoided.

Probate does provide court supervision, which is sometimes helpful if disputes arise among the beneficiaries. Finally, probate provides a simple method to cut off creditor claims.

For many years the law required an age-restricted community to offer significant amenities and services if it was age restricted. That is no longer the case, but to compete, and attract residents, we still see most age-restricted communities offering amenities and services to serve their residents.

Estate Taxes

Revised 2002 by Joseph C. Kastner Attorney At Law
2441 Hamner Avenue
Norco, CA 92860

In taxing a decedent’s wealth, there can be Federal Estate Taxes and State Inheritance Taxes. California abolished the State Inheritance Tax, and decedents who resided in California at the time of their death are only subject to the Federal Estate Tax. However, if the estate is of sufficient size to require the filing of a Federal Estate Tax Return, then what is referred to as an inheritance “pickup tax” must be paid to the State of California, in which event the amount of the “pickup tax” is exactly the same amount that is allowed as a deduction for State Inheritance Taxes on the Federal Estate Tax Return.

The Federal Estate Tax is based upon a decedent’s net estate. In order to determine the net estate, you must ascertain the gross estate. The definition of a “gross estate” for Federal Estate Tax purposes is one which includes all the assets in a decedent’s estate at the time of death. The Federal Estate Tax is based on net estates currently in excess of $1,000,000. In 2001, Congress enacted the Economic Growth and Tax Relief Reconciliation Act which provides the following applicable exclusion amount for estate taxes:

Year Applicable Exclusion
2002 $1,000,000
2003 $1,000,000
2004 $1,500,000
2005 $1,500,000
2006 $2,000,000
2007 $2,000,000
2008 $2,000,000
2009 $3,500,000

The top estate tax rate will incrementally decrease from the current rate of 50% to 45% in 2009 and is being repealed effective January 1, 2010. However, the estate tax is subject to a “sunset provision” which states that the provisions shall not apply to estates of decedents dying, or gifts made, after December 31, 2010, all of which means that, unless Congress intervenes, the original code provisions governing estate and gift taxes which were in existence as of December 31, 2001, will be reinstated effective January 1, 2011, as if the Economic Growth and Tax Relief Reconciliation Act of 2001 had not been enacted.

Because of the uncertainty of the scheduled repeal of the Economic Growth and Tax Relief Reconciliation Act in 2010 as a result of its “sunset provision,” it is essential to seek the assistance of a tax professional as careful tax planning can allow one to substantially reduce their Federal Estate Tax liability in the event the Act is repealed.

Unlimited Marital Deduction

If a married couple are United States citizens, then the federal government exempts all transfers of wealth between the husband and wife. This means that the federal tax exemption mentioned in the previous paragraph will not be applied, as there is an unlimited exemption on a transfer to a wife. At the same time, if one does not plan carefully, the tax burden will be substantially increased at the death of the second spouse.

Unified Gift and Tax Credit

The present unified credit allows one to shelter up to $675,000.00 and will be increasing until the year 2006. With careful planning, a married couple can shelter $675,000.00 for each person, and by the year 2006 a married couple could shelter up to $2,000,000.00. Our tax laws have severe tax penalties on transfers to grandchildren or individuals in what is defined as two generations below the transferor. If one is not careful, a penalty of 55% can be imposed. Tax professionals can guide one to claiming an exemption for all or part of the transfer.

Gift Tax Exclusion

Presently, one may transfer up to $11,000 per person per calendar year to as many individuals as they please, free of gift and income taxes. However, unlike the gradual increase in the Estate Tax Applicable Exclusion Amount, the Gift Tax Applicable Exclusion Amount, commencing with gifts made in the year 2002, will remain at $1,000,000, and is not indexed for inflation. If one exceeds the annual exclusion of $11,000, then the gift will be subject to a Gift Tax and applied against the transferor’s individual lifetime Applicable Exclusion Amount. In valuing a gift, it will be valued at the present value, but the transferee will receive the gift at the cost basis of the individual making the gift. Cost basis is the amount of cost of purchase of the item by the transferor, or the amount that the transferee will use in reporting a sale of the gifted item on their individual income tax return. Accordingly, the transferee will be subject to a Capital Gains Tax on any increase at time of sale, even though a Gift Tax was paid on the full value. For this reason, one needs to consider the effect of a “lifetime gift,” which could bring a lower cost basis to the transferee, and subject the transferee to a substantial Capital Gains Tax upon the difference between the cost basis and the value at date of sale, versus a “testamentary gift,” which, because of death, will be revalued as of the date of death, thereby reducing the potential Capital Gains Tax to the transferee upon subsequent sale due to the step up in basis.

For example, if a person makes a lifetime gift of real property worth $150,000 at the time of the gift in which the person making gift has an original cost basis of $50,000, and the recipient sells the property several years later for $300,000, the recipient then will be subject to a capital gains tax upon the $250,000 gain; whereas, if the same property was received by a testamentary gift which was valued at $250,000 as of the date of death of the person making the gift, and thereafter sold for $300,000, the recipient would only be subject to a capital gains tax on $50,000.

Tax Summary

In conclusion, taxes can play a very significant part of estate planning. Consultation with a tax professional will allow one to explore tax saving options. Any review would include explaining the use of the maximum option of a marital deduction and other choices such as lifetime gifts, insurance trust, charitable trusts, and family partnerships.

Intestate Succession

One dying with assets subject to probate and without any written plan of distribution is deemed to have died "Intestate". If one dies intestate, the state legislative plan becomes a plan of distribution. Each state has a different plan, and individual states provide different percentages for a surviving spouse. In addition, some states such as California, provide for the heirs of a deceased spouse in limited circumstances. As to children, the court will name a guardian, and it will name a personal representative to supervise the distribution of decedent's estate. It is only with careful planning that you can determine your own destiny.


A will is a written document in which the deceased states their plan of distribution. If one has a will, it does not mean that the estate must be probated. However, it does mean that the estate should be distributed according to the plan of the one who made the will.

Many times people attempt to prepare their own wills. This can be done in the form of a statutory will form available in most stationery stores, or in California, in the form of a holographic or handwritten will. Wills are construed very narrowly and many costly lawsuits have evolved when a person has attempted to make his or her own will without professional advice. If a will is drafted properly, it will assure that your estate will be distributed according to the plan you have chosen.

Joint Tenancy and Totten Trust

A common avoidance of a probate is through the use of joint tenancy. At death, the surviving joint tenant automatically inherits the property. A probate is avoided, but there are serious legal and tax consequences that one must understand before using this method of probate avoidance. Each joint tenant's interest can be subject to attachment to satisfy judgments. In other words, if your co-joint tenant has financial difficulty, his or her creditors could take your joint account to satisfy their debt. In community property states one can lose a full step up of the basis of the asset at death. One may have made a gift to achieve the joint tenancy, which can create gift tax consequences.

A Totten trust is used by banks and savings institutions to name a beneficiary after the death of the depositor. Its main disadvantage is that in many cases the depositor does not have a plan if the named beneficiary predeceases the depositor. It is fully revocable and can be changed by the depositor.


Prepared for by Clarence H. Schlehuber, Attorney at Law
Carlsbad, California 92008-1703

In addition to the Totten trust, in planning one's estate, trusts can be an important element. Trusts can be first divided into two variations. They are revocable trusts and irrevocable trusts. Irrevocable trusts cannot be changed (with a few exceptions) after they are put in place. They are important in tax planning for those with larger estates. They sometimes take the form of an insurance trust or charitable trust, which each have many variations.

Revocable Trusts

Revocable trusts are the most common estate planning used for individuals today. They can be amended and changed at any time before the person making the trust becomes incapacitated or dies. The most commonly used revocable trust is an Intervivos or Living Trust. In this instrument, the maker of the trust places their assets into the trust immediately and then the successor trustee may manage those assets if the maker of the trust becomes incapacitated or dies. The successor trustee is the fiduciary and has a legal duty to follow the terms of the trust as set out by the maker of the trust. The Intervivos Trust allows you to avoid probate at death, and avoid a conservatorship in the event of incapacity. It can be part of an estate plan in which the children will have a sub-trust built into the main trust and not receive their money until they become a particular age in which the maker deems appropriate. In the case of a married couple, it can be used to minimize estate taxes. The Revocable Intervivos Trust is a complicated document and should be completed under the direction of a professional. The trust itself is an independent entity, and unless you properly put the assets into the trust, it is totally ineffective. Even though the trust owns the assets, the one who made the trust has the ability to control the assets, either as trustee or by an amendment to the trust.

Testamentary Trusts

A Testamentary Trust is a trust that takes effect after the death of the trustor. It is probated but does allow for one to designate sub-trusts for the children and marital estate planning. Its disadvantage is that it is subject to probate court jurisdiction at all times, but probate court jurisdiction does give greater security to the beneficiaries should the successor trustee not fulfill their proper fiduciary duties.

Additional Documents

Corporations, limited family partnerships, and general partnerships are often used in planning large estates.

Durable Power of Attorneys for Assets

Durable power of attorneys for assets are used to manage one's property and personal affairs. The term is sometimes used that they are a poor man's trust. During one's lifetime, the holder of a durable power of attorney may act in the behalf of the individual who has given them the power. Durable powers are fully revocable and can be changed at any time. Durable powers can be drafted so that they will not become effective until one becomes incapacitated, or they can be drafted so that they become effective immediately. Durable power of attorneys for assets contain the specific powers that are to be given, and can be very limited or very broad. The durable power of attorney needs to be drafted very carefully, as if it is drafted too broadly or to the wrong individual, it could give the holder an unsupervised means to transfer the assets of the maker without consulting the maker.

Durable Power of Attorneys for Health Care

Advanced Health Care Directives are governed by individual state legislatures. In California, they allow one to designate the type of health care they wish to have in the event they become incapacitated. It can be amended at any time and only become effective when one is incapacitated. In addition to giving the holder the power to follow standard medical treatment, it may be drafted in such a way that the holder can, under certain circumstances, refuse medical treatment for their principal. The principal is the person who made the Advanced Health Care Directive and is now in deed for their designee to act in their behalf.

Final Notes on Estate Planning

In addition to the information mentioned in this article, many other factors are used by a professional in proper estate planning. IRA's, pension plans, insurance, and charitable giving are all items that are considered in planning one's estate. In choosing an estate planning professional, one should carefully examine the qualifications of the person chosen. In some states such as California, individuals are certified in certain specialties. Some lawyers are general practitioners, and some have developed a specialty of estate planning. Taxes are an important consideration in estate planning, and the professional chosen should have a good background in taxation. Throughout the United States, local county bar associations often have lists of qualified attorneys in the area of practice that you are seeking professional help. If asked, they will advise you whether your state has a certification process for a particular specialty, and the qualifications they require to be listed on their referral list.

The articles on Estate Planning And Trusts have been prepared by California State Bar Certified Specialist in Probate, Estate Planning and Trust Law:

Prepared for by Clarence H. Schlehuber, Attorney at Law
Carlsbad, California 92008-1703

Family Limited Partnerships

FLP's (Family limited partnerships) differ from conventional trusts as family members can own an actual share of the limited partnership. An FLP is a useful planning device for accomplishing a wide variety of tax and non-tax estate planning objectives. Read more about it on this wikipedia page.

Property Sales Tax Relief

The 1997 Taxpayer Relief Act gives a $500,000 exclusion of gain on sale of the principal residence if married and filing jointly. For single taxpayers, there is a $250,000 exclusion. This law does not have any requirement for purchasing a replacement residence. It is available once every two years and helps to serve the following purposes:

  • to include children and more remote descendants in the economic benefits of family assets while maintaining management and control of those assets;
  • to provide a single point of contact (the manager or general partner) for third parties with regard to transactions affecting the family's assets, thereby facilitating business dealings;
  • to protect the partnership property from the claims of the partners' creditors and, conversely, to protect the partners' assets outside of the partnership from claims of the partnership's creditors;
  • to provide a means for co-ownership of partnership assets without creating fractional interests or complicating the legal title to such assets;
  • to increase the wealth of the family member partners as a group by investing and reinvesting any proceeds from the sale or refinancing of the partnership assets;
  • to provide flexibility in business, income tax and estate planning not available through trusts, corporations or other business entities;
  • to restrict the ability of persons who are not family members or trusts or other entities created for their benefit from obtaining an interest in the partnership assets;
  • to provide an orderly means for resolving disputes that may arise among family members concerning the partnership assets, thereby promoting harmony among the partners and avoiding the expense of litigation;
  • to promote knowledge of, and communication about, the management of partnership assets between senior and junior family members, thereby facilitating a smoother transition of family wealth when the senior generation passes away;
  • with regard to publicly traded stock (or closely held stock that is expected to become publicly traded), to protect the founder and the founder's family from securities violations by family members, such as insider trading; and
  • to preserve confidentiality concerning the family's assets

Inherited Real Estate

Inherited Property

You have inherited a property.

If the property is near your home, you could use your network to help you prepare it for sale. Assistance would come from an attorney, accountant, insurance agent, repair and maintenance people, and a real estate agent.

However, it is more likely that you are one of the many people who inherit properties that are more than 2 hours away from your home. You don't want to leave the property vacant for long because of the insurance, security, maintenance, and tax issues. And, as soon as possible, you want to sell it.

Use Google search, or fill our our form and we can help you identify a qualified real estate agent who understands your needs and is willing and able to coordinate the appraisals, evaluation, fix-up, and sale of the property. They would also communicate with you, your family members, and your legal counsel so that your goals are accomplished in a timely manner.

Selling Inherited Real Estate

The sale of an out-of-area inherited house, need not be overwhelming physically, emotionally, nor financially. We simplify the process, reducing stress, saving time, and preserving investment.


    Real Estate Services---in any Market:
  • The Best Consulting, Negotiations and Transaction Management
  • Sale of Property
  • Date of Death Appraisal
  • Coordination Services:
  • Prepare the Property for Sale (fix -up and staging)
  • Arrange Pickups and Delivery to Charities
  • Disposal of Unwanted Goods

Services cost no more than ordinary real estate services.

To contact an Inherited Real Estate Professional click HERE.

Reverse Mortgages

American homeowners 62 and over can convert the equity in their homes into a usable financial solution, a reverse mortgage. There are several loan products available, the standard being the FHA HECM (Home Equity Conversion Mortgage). You can pick from an adjustable rate option (either monthly or yearly adjustable) or fixed rate. Adjustable rate options allow you to get more money compared to the fixed rate option in most cases.

You may now use a reverse mortgage to help you purchase a home and have no monthly payment! These loans, unlike conventional home loans, have no monthly mortgage payments for as long as the borrower lives in the home. You will, however, be required to pay your real estate taxes and homeowners insurance when they come due.

There is a national lending limit of $726,525 (as of January 1, 2019) that allows lenders to consider home values up to this limit when determining the amount of money a senior can borrow with a reverse mortgage. This lending limit is set yearly and is subject to change.

The amount you can borrow from a reverse mortgage is determined by three main factors:

  1. The age of the youngest borrower (if more than one)
  2. The current appraised value of the home
  3. Current interest rates

Lenders will set rates based on an outside rate index that they have no control over, usually the LIBOR (London Interbank Offered Rate) or the CMT (Constant Maturity Treasury Index) plus a margin.

Another feature of these loans is that no matter how high your loan balance grows, you never owe more than the home's market value when the loan is repaid.

The greatest benefit of a reverse mortgage loan is that it allows seniors to stay in their home and have access to their home's equity for medical, insurance, home repair or monthly income needs, or any other worthwhile need.

There are no restrictions on the use of the funds.

Senior homeowners have several options for the equity payout of their reverse mortgage:

  • A lump sum
  • A line of credit
  • Monthly payments
  • A combination of these options
Seniors should review all the options and costs associated with each product and each payment option to determine which best fits their, and their family's needs.

The FHA HECM and Fannie Mae HomeKeeper have loan limits determined by Fannie Mae guidelines.

All products mandate counseling. The FHA HECM requires independent counseling before any services i.e., appraisal, title, flood certificate, can be ordered. Counselors are approved by the Department of Housing and Urban Development (HUD) and provide counseling regarding the various programs and their options. Upon completion of this counseling requirement, the borrower may proceed with the reverse mortgage if they so wish.

If you are considering a reverse mortgage, here are your next steps:

  1. Contact a reverse mortgage lender.
  2. Meet with an independent counselor.
  3. Decide which of the programs might be best for you.

Features of most Reverse Mortgages:

  • The loan is due for repayment when the last borrower permanently moves out, dies, or sells the property.
  • Interest on a reverse mortgage is tax-deductible at the time of full loan repayment which is anticipated to be upon the home sale.
  • Seniors can reside in a nursing home for up to a year before the reverse mortgage/loan is due.

Please consult your tax advisor.

For additional information on Reverse Mortgages:

Reverse Mortgage Overview
Fannie Mae
Federal Housing Administration
Frequently Asked Questions about HUD's Reverse Mortgages
National Reverse Mortgage Lenders Association

Investment Strategies

When to Sell Real Estate

Many individuals have done well investing in real estate over the years. Some investments have been in vacant land, others in rental properties. But there often comes a point in time when real estate, particularly residential rentals, is too demanding an investment compared to other assets such as stocks and bonds. So what is the best way to transfer the responsibilities of managing or even totally getting this asset out of your portfolio?

With income properties, you could hire a property manager. But sometimes this isn't cost efficient, or perhaps you've had enough and want out.

There are several ways to remove real estate from your portfolio and perhaps increase your income at the same time.

An outright sale is the simplest. Tax consequences, however, can take up to 20% of your long-term gains (plus State tax, plus recapture tax if it applies).

An installment sale can ease the tax bite, but you will have to wait longer to get your money (yet pay all the tax today).

A 1031 exchange to a less demanding or higher income producing property could simplify your life and defer income taxes. For example, selling your apartment building and using the equity to buy a McDonald's location results in less-demanding property as the commercial tenant usually takes care of all property responsibilities.

If you also want to help a charity, you could put the property into a charitable remainder trust that would sell the real estate without paying capital gains tax (and pay you an income as long as you live and even stretched to the next generation)

You could use a private annuity if you desire to transfer the property to heirs and want to immediately remove it from your estate.

Another alternative is to get a new mortgage to free up cash that you could put in other investments for further portfolio diversification. ( A reverse mortgage can free up cash from real estate, but only if it is taken out on your primary home.)

Before you make any changes, though, you might want to take some factors into consideration:

  • What does your family think about this?
  • Do your children expect to get or stay involved with the real estate?
  • Would your spouse have the ability or even want to take care of real estate if you died? If not, you might end up leaving your heirs with a bundle of problems and responsibilities.
Coming up with the appropriate strategy to remove real estate from a portfolio needs to be approached with a coordinated effort that addresses your financial, family, legal, and tax situation.

Review options with a financial advisor, tax attorney, or Elder Law attorney to determine what makes sense.

Charities Working to Get Your Gifts

Are you looking to make a gift to your alma mater or other favorite charity? Many nonprofits are getting more aggressive in their marketing efforts to attract donors like you. And the help they provide might make your gift giving planning easier and perhaps less costly. However, make sure you understand their strategy before you accept help.

Charities make it easy for you to donate. For example, many charities promote making gifts now, and the charity pays you an income for life. Your gift is deposited in their pooled income fund. These funds can be managed to maximize the return to the charity. Your alternative is to establish your own trust and manage the assets yourself or with an advisor of your choosing.

Planned giving officers have been hired to help some nonprofits raise money. These professionals have become philanthropic advisors to alumni, donors, and potential donors. They sponsor seminars on money, family dynamics, and philanthropic issues and offer on-site tours to introduce their organization's mission. To assure some independent advice before making a gift, educate yourself, or us a financial advisor, a tax or Elder Law attorney to see how to maximize the tax and income benefits to you while also benefiting your favorite charity.

Using A Down Stock Market To Your Income and Estate Tax Advantage

A down stock market and dropping interest rates can sometimes put financial plans on hold. But there also may be an opportunity during a slowdown for investors who expect the economy to recover. If you transfer property during a slow down or market dip, you may be able to reduce the size of your taxable estate and improve your chances of passing on more tax-free funds to your beneficiaries.

First, the income tax advantage:
Any stocks that you want to hold long term yet have a loss currently could be sold so you can take the deduction on your tax return (limitations apply). You can then repurchase these shares in 31 days (if you repurchase sooner, the IRS does not allow the deduction). Some people are so emotionally tied to never taking a loss that they miss this tax advantage. You must make the sale to capture the tax advantage.

Secondly, if you have an IRA, converting to a Roth IRA is more beneficial when your IRA has dropped in value. By converting to a Roth, you convert a tax-deferred account to tax-free, but must pay the accumulated income tax on today's value. What better time to make the conversion than when the value is down and your tax will be lower.

As for estate taxes:
In a down market, you can transfer more assets and use less of your $1 million exemption. Lets hypothetically assume you have 1000 shares of stock that were worth $1.2 million 2 years ago. You could have transferred those shares out of your estate (e.g., to a trust) but would have had to pay gift taxes on the amount over $1 million. If today, those shares have declined in value to $1 million or less, you can transfer them without tax. Reduced values allow you to transfer more property before estate taxes take effect.

To investigate how to make the most of the asset values that have declined, a consultation should be in set up with your financial advisor, or with a tax or Elder Law attorney.

US Savings Bonds and Treasury Securities

It is essential to check your US savings bonds periodically to determine if they are still earning interest, and if US Savings Bonds are not, they should be redeemed. Use the tables below to determine whether your bonds have stopped earning interest, or for how long you can expect them to earn interest.

Also, marketable securities are subject to bond calls, cases where the Treasury stops paying interest on bonds before the scheduled maturity date. Be sure to note your securities maturity date and check the website for bond calls.

NOTE: Marketable securities, such as U. S. Treasury bills, notes, bonds, and Treasury Inflation-Protected Securities (TIPS) have maturities ranging from a few days to 30 years.

The following savings bonds no longer earn interest:

E All issues
EE Jan 1980 through May 1996
H All issues
HH Jan 1980 through May 1996
Savings Notes All issues
A, B, C, D, F, G, J, K All issues

To stay up-to-date with what the government is offering, check their website and click on "savings bonds rates" on a regular basis.

Social Security

The earliest eligible age for filing for social security is 62, with approximately a 20% reduction in benefits. If you are a widow or widower and have not remarried, you can be eligible for benefits on your late spouse's account. Generally, the amount is less than one would collect on his/her own, and therefore not often filed. Widows, on the other hand, can often receive more funds by filing at 60 on their late husband's benefits than if they were to wait until 62 or 65 based upon their own earnings. At 65, those who paid into Social Security are eligible to file for full benefits if you were born before 1938. Those born after that are subject to an incremental rise in the age until eventually, filers will have to be 70 to receive "full" benefits. (Does not apply to widows or widowers who may be eligible to survivor benefits, and to underage survivor dependents.) In order to collect, you must file at your local social security office.

Before retirement, you should be receiving every year an annual Personal Benefits and Earnings Statement from the Social Security Administration. If you are not, request one or several statements with different ages for retirement as long as they are each submitted on a separate form. Do this by calling 1.800.772.1213 or by downloading the form. If you dispute their record of earnings it can be dealt with well ahead of filing for benefits.

The social security office sends out statements before your birthday on some regular schedule, but do not depend upon that. Create an account on their website to check anytime, or check with the office as necessary.

If you file for early social security between age 62 and 65, your earnings test exemption is $17,640 per year (2019 figure; refer here for future and historic rates). That means you may be able to earn up to that amount in a calendar year without forfeiting any of your social security check amount. Special rules apply in the initial year you retire that may affect that number. If you continue to work after you file for social security, social security will continue to be deducted from your wages, or 1099 income earned as an independent consultant. These additional social security payments made into the system may make you eligible for higher payments from social security in subsequent years.

The Social Security Administration also handles Social Security Disability Insurance Benefits, Disabled Widows'/Widowers' Benefits, Divorced Disabled Spouse Benefits and Supplemental Security Income as well as several other benefits. Medicare eligibility is automatic if you file for social security benefits at 65. See our Medicare Resource Center for in-depth information. If you neglect to file at 65 and are not employed by a government agency you may be penalized with higher payments when you do file. Medicaid (Medical in California) is handled through state welfare offices.

The easiest way to check on your personal Social Security account is to create an online account at

Social Security and Disability

Social Security Disability benefits may be available to workers of any age who meet specific criteria, and who are disabled because of a medical problem which prevents a return to past relevant work and who are only capable of some limited other kinds of work. Supplemental Security Income, SSI, may be available to persons who have never worked or who have not worked in recent years. There are resource limitations connected with the receipt of SSI, and these should be investigated.

A disabled worker considering filing for early retirement with reduced Social Security retirement benefits at age 62, may want to seek counseling. If they can qualify for Social Security Disability benefits, rather than filing early for retirement benefits, they could qualify for Medicare coverage in two years, at the age of 64. An early retiree on Social Security is not eligible for Medicare until age 65.

Lawyers specializing in Social Security issues should be consulted for further clarification and help. These lawyers frequently do not charge for telephone questions. They are prohibited by the Social Security Act from charging for services until they are successful in obtaining disability benefits for the person seeking benefits. Fees are taken from the retroactive benefit in most cases and must be approved by the Social Security Administration.

Retired persons with no other source of income except a limited Social Security benefit may also qualify for additional benefits such as relief from payment of the Medicare premium.


Information and pamphlets are available at local Social Security district offices, but access to personnel for information may be difficult. Non-lawyers sometimes charge to provide information which you can receive free from a lawyer who specializes in Social Security law.

Social Security Disability information provided by Dianne R. Newman, Attorney at Law with Sternberg, Newman, Shifren & Associates.

Contact the National Organization of Social Security Claimants' Representatives (NOSSCR) for information about qualified persons in your area:
6 Prospect Street
Midland Park, NJ 07432

Information provided herein is not meant to be comprehensive for all situations. It includes guidelines for seniors so they might determine if they should pursue a question further. There is no substitute for contacting Social Security directly.

How to Own Your Life Now and Later

Who owns your life? This is not asked to distinguish Body from Soul, Body form Mind, Body from Spirit. "Who" decides "What" for your body if you cannot decide what should or should not be done? What if you could not express your decision? Who has the right to decide for you? Your husband? Your former wife? Your minor grandchild? Your physician-brother? Your clergyman?

Do you want to be kept alive on a respirator? Would you want to live in unconsciousness, hooked up perpetually to tubes? How many consultants should be called to determine whether a coma is temporary or permanent?

Who should pay for such care? Family? The state? Is money a fair factor in this decision? Whose money? Whose decision?

Painful decisions are painful no matter who makes them. But on the intensely personal subject of your body, you have an important interest in deciding who shall make critical decisions you would make if you could, once you cannot.

You could appoint a member of your family or a friend or professional practitioner to act as your Medical Surrogate.

Contrary to what most people think, however, a Surrogate is not a Surrogate forever. In fact, in most states, a Surrogate is only a temporary appointment. If a document for a Medical Surrogate is recorded, it generally serves only for one course of illness, or one hospital stay. Most states have no statutory surrogacy.

If you do not appoint a Surrogate, how is one selected?

Remarkably, though states have clear mandates as to who can act for the dead who have not made their will known, there is no such provision for knowing the will of a person alive, but incapacitated. Every state has what is called a "statute for intestate succession" which provides who shall inherit what, from a person who died without writing a will. Only a few states regulate Medical Surrogacy. Everywhere else, a Surrogate, if not appointed by the patient, must be appointed by a Probate Court.

Going to court on medical decisions usually is emotionally painful for the family. But Probate Court can be deadly for the incapacitated patient whose treatment must be delayed or inappropriately continued until the Court rules. And the court is simply a judge. No matter how intelligent and no matter how compassionate, that judge has never met the patient, never learned what the patient personally decided and can only rule on what seems reasonable and fair. Is that what you want?

More permanent and more certain than the temporary Medical Surrogate, is a Durable Power of Attorney for Health Care or Advanced Health Care Directive. To establish such a Power you first must creatively contemplate the most horrible of horribles. Then you must act with courage and decorum to write your judgments about what you wish done and not done if that horrible event occurs. Finally, in great relief, knowing you have taken necessary precautions, you can forget about the problems and enjoy life.

Fortunately, several states have compassionate laws protecting the seriously disabled and incapacitated. No matter how strong and healthy you are today, and no matter where you live, you need to know what your state does or does not require. Your state no doubt has some law relating to Health Care Decisions and creating Powers of Attorney for Health Care.

For this writing, California's Health Care Decisions Law (technically, Chapter 658 of the California Statutes) passed in 1999 and effective as of July 1, 2000 will be cited, because it is intelligent, benefits from the excellence of other state laws, and sets an example for other states to enable citizens to retain personal autonomy even in disasters. California's law combines the Probate Code's Durable Power of Attorney with the Natural Death Act's Living Will to Physicians and goes beyond the best of each. It avoids ambiguity and clarifies many contradictions. It protects most, although not all individual choices and bodily rights.

It gives Californians two new rights:

  • To appoint a Durable Power of Attorney for Health Care
  • To create an Advance Health Care Directive.

Durable Power of Attorney for Health Care: If you reside in California you can appoint a friend or relative as "Attorney-in-fact". The person need not be an attorney to be called that. They become your agent for decisions and actions for your body if you cannot give your own permission or veto. Expressly built into this Power is a Durable Provision. If you, the grantor of the Power, become disabled or incompetent, then the Attorney-in-fact takes over as your spokesperson.

The Attorney for Health Care is supposed to act as you would act for yourself if you could.

"Yes, please operate."
"No, please do not use X anesthesia."
"Yes, please be sure to try ABC because my sight is more important to me than my hearing."
"No, do not keep me alive on a respirator if I never again will be able to...."

Those are the tough decisions the Attorney-in-fact must make. Therefore, you must select that person carefully. He or she will have to act in the best possible way for your benefit, not theirs.

Legally, this Attorney-in-fact replaces your Informed Consent. Appointing an Attorney-in-fact requires you to write what becomes a legal document. You can get preprinted forms from your local hospital, elder law attorney, or stationery store, and fill in the blanks, or you can create your own document. Since the Power itself is a legal appointment avoiding Probate Court, it must be created with dignified formalities. The purpose is to be scrupulously clear and fair. Therefore, in California, as in many states, the document appointing the Power-of-Attorney must be signed in front of 2 qualified adult witnesses or a Notary Public. The witnesses or Notary must attest to your, the grantor's, sound mind, and that you are under no known duress, no fraud, and no undue influence. The Attorney-in-fact must sign they agree to take on the responsibility. To be appointed a friend's Attorney-in-fact is a high honor and a terrifying responsibility.

However, does that Attorney-in-fact know what you would do if you could?

Advance Health Care Directive

If you are a Californian, you can create an Advance Health Care Directive, which is a set of specific instructions (originally under CA Probate Code S.4701). Most are for End of Life Decisions.

  • There is the choice NOT to prolong life Vs. the choice to prolong life under certain terrible circumstances (unconsciousness, total paralysis, literally whatever scares you to death).
  • There are Do Not Resuscitate Orders (DNR) which give particular scenarios. "If X horror occurs, then DNR."
  • There are "Relief from Pain" orders. Some physicians and some HMOs will refuse strong narcotics for relieving excruciating pain for fear of creating addiction. If you need the medication, do you want it or do you not want the risk of becoming a junky if you survive?
  • There are instructions for Organ Donation after Death. You can specifically provide for your organs to be used for transplant, for therapy, for research, and for education. Or you can restrict organ donating for one or two purposes and exclude the others. Or you can say No to all.
  • You can appoint a so-called Responsible Physician. That doctor designation probably will not be valid if you belong to a medical program that assigns physicians to patients and patients to doctors. But the law makes a valid attempt at integrity.
  • Some people so stress and fret over the Advance Health Care Directive that they fail to write one. Do not procrastinate. No matter how awkward or how painful writing one is, to not write one is more terrible.

    Here is an example of how one person dealt with an ADVANCE HEALTH CARE DIRECTIVE:

    If my body slowly dies by degree (total disability, paralysis), it is the expendable but magnificent vessel of my mind. Thus I want to live to continue thinking and working whatever way I can get ideas out of my head. If no speak, then write. If no write, then tap and blink. If no tap and blink (or computer-aided equivalent) then pull the plug and let my mind follow my body to death. If my mind goes, it is the essential, non-expendable, magnificent center of my being. Short term memory loss is OK if long term memory and reason still exist and function. If all memory and reason cease, then pull the plug and let me die. My body is wonderful, but not worth preserving. Give any and all my organs, tissues, or body parts to grateful recipients for transplant, therapy, research, or education.

    Provided to and copyright by Madeleine Pelner Cosman, Ph.D. Esq

    Handy tips:

    • Discuss your wishes with family, doctors, and caregivers
    • Complete and update your documents with doctors' input
    • Pick a health-care agent who will act aggressively to carry out your wishes
    • The best agent may not be the one closest and dearest to you
    • Have a witness for each directive you sign and date
    • Copies of directives should be in your medical records and let the family know
    • Choose a new doctor if yours is not willing to abide by your wishes

    Elder Law is an area of legal specialization focusing on health, legal, and financial issues of seniors and their families. Areas covered by this specialty are:

    • Preservation/transfer of assets to avoid spousal impoverishment
    • Social security and disability claims and appeals
    • Medicaid
    • Medicare claims and appeals
    • Supplemental and long term health insurance issues
    • Disability planning, durable powers of attorney, health care decisions and instruments for preservation/inheritance of assets
    (From a printing by the National Academy of Elder Law Attorneys, Inc. 520.881.4005)

    Loan Options

    Seniors have many loan options, including:

    • Bad Credit Personal Loans
    • Reverse Mortgages
    • Home Equity Loans.
    • Debt Management

    Identity Theft Help

    Protect your family and your credit.

    The Federal Trade Commission has established a web site to aid in the battle against identity theft. This web site is a one-stop national resource to learn about this crime. It provides detailed information to help you Deter, Detect, and Defend against identity theft. While there are no guarantees about avoiding identity theft, there are steps you can take to minimize your risk and minimize the damage if a problem occurs:

    Resources, Products, and Other Considerations

    Elder Law resources near you.

    National Fraud Information Center provides information on fraud and other pitfalls. They cover on-line fraud, as well as other forms. Also reachable at 800.876.7060.

    PENSION DISCREPANCIES. The Pension and Welfare Benefits Administration at 800.998.7542 can provide information on pension rights.

    Resources in your state.

    U.S. Savings Bonds information. Resource for current redemption rates and a wealth of related information.