Social Security and Estate Planning Facts and Essential Information

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Social Security and Estate Planning Facts and Essential Information

Social security and estate planning are vital when planning for your future. Unfortunately, some might not fully realize how these tools work or where they intersect. However, with the right information, you can use them together, maximizing each of their benefits. So, below are all the top social security and estate planning facts you need if you’re looking to build a secure financial future.

What is Social Security?

Before looking at some top social security and estate planning facts, let’s start with the basics, including understanding social security. For many, it’s a retirement benefit you get after leaving the workforce. This is true to some extent; according to the Social Security Administration, retired workers (and their dependents) account for up to 76.9% of the social security benefits payments in the United States.

However, social security goes beyond retirement benefits. According to the International Social Security Association, social security is a fundamental (and universal) right comprising any social protection program that offers income security to individuals due to various special circumstances. This includes retirement, old age, unemployment, disability, incapacity, survivorship (spouse and children), and more.

In the U.S., social security is a federal program administered by the Social Security Administration (SSA). According to the Center on Budget and Policy Priorities, the program covers around 66 million Americans. However, other social protection plans exist, including those funded by state governments and others designated for specific individuals (veterans, federal employees, railway workers, etc.).

How Do You Receive Social Security?

Social security is a contribution-based program for workers; you pay into the program through social security taxes. Therefore, one of the top requirements for receiving social security benefits is that you must be working (or have worked) and up-to-date with your social security taxes. Once you meet these eligibility criteria, you can apply to the SSA for your desired benefits.

However, additional eligibility requirements exist for different benefit programs. For example, according to the SSA, you must be at least 62 years old before you can start receiving retirement benefits. However, there are some situations where these requirements may be waived, for example, when the benefits are paid to family members.

Once you meet all the requirements, you can start receiving social security payments. Before, the benefits were paid through checks mailed to the beneficiaries. However, today, the SSA only makes electronic payments through direct deposits to a bank account or a debit card.

What are the Benefits Offered by Social Security?

The federal government-run social security program offers a variety of benefits to eligible Americans. These include:

Retirement Benefits

Retirement benefits are the most common type of social security benefits. They are payable to workers above 62 years old and who have been working for at least ten years before retiring. However, according to the SSA, you can still work and receive retirement benefits, but there’s a limit to how much you can earn to be eligible.

Disability Benefits

Disability payments are another popular type of social security benefit. It is designated for people with a physical or mental disability, making it impossible to work. You can claim two benefits under the federal social security scheme: SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income).

SSDI is for people who are insured, i.e., having been working for a specific period and paying social security taxes. On the other hand, SSI is for individuals with a disability and limited income or wealth. Therefore, one of the top estate planning facts to remember is that your assets can affect your social security eligibility, where SSI benefits are concerned.

Besides the federal benefits, there are other social security disability benefits you can receive. For example, you can apply for workers compensation if your disability was due to a workplace injury. There’s also the VA disability program for veterans injured while serving in the military.

Survivors Benefits

Under the federal social protection scheme, survivors benefits are made to dependent family members of a deceased worker. This can include the surviving spouse, children, dependent parents, and a surviving spouse taking care of the deceased worker’s children. Other dependents, such as an ex-spouse, stepchildren, and grandchildren, can also be eligible for survivors benefits. According to the SSA, the amount paid is based on a deceased worker’s income when they were alive and the dependent claiming them.

Spousal and Dependent Benefits

Spousal and dependent benefits are similar to survivors benefits but with one major difference; they are paid to the beneficiary when a worker is still alive. The payments are based on the worker’s entitled retirement benefits. However, they are usually capped at 50%.

What is the Importance of Social Security?

Social security offers several benefits that can help to guarantee an individual’s financial security and that of their dependents. First, it is a key source of retirement income. Some people survive solely on social security retirement benefits, while others use it to supplement other retirement incomes like pension payments, savings, and 401(k)s.

According to the U.S. Census Bureau, social security benefits are also vital for protecting individuals from poverty. This is especially true amongst older adults, who experience financial difficulties after they stop working. Fortunately, with social security benefits, they can pay for healthcare and adult assisted living facilities, thus enjoying a more comfortable life.

Lastly, social security provides income protection for workers and their dependents. For example, a worker can claim disability benefits if they can no longer work because of a disability. Likewise, the program gives dependents a financial cushion when their breadwinner retires or dies.

Hiring a Lawyer for Social Security Representation

One of the top social security and estate planning facts to take note of is that social security benefits are not always guaranteed. After all, many benefits have eligibility criteria that you must meet. Additionally, the process can be overwhelming, especially when filing supporting documents.

Therefore, social security lawyers can be vital when you file for benefits. For example, in the case of a disability, they can help you to find all the supporting evidence, from medical reports to witness statements. An attorney can also help you when filing for spousal, dependent, and survivors benefits, especially if you’re uncertain if you qualify.

Lastly, you can hire legal representation to appeal benefits denial. For example, a social security disability appeal lawyer can represent you when dealing with SSA, thus improving your chances of your application being approved. In addition, they could help you seek other legal redress, for example, by requesting a hearing before the SSA Appeals Council or filing a case in court.

What is Estate Planning?

Like social security, estate planning is another vital tool that you can use to secure your future. Unfortunately, not many people take advantage of it. According to a 2023 Survey by, as many as 66% of Americans don’t have an estate plan, which can significantly jeopardize their financial future.

So, what exactly is estate planning, and why do you need it? Before delving deeper into estate planning facts, tips, and benefits, let’s first understand what an estate is. In terms of financial planning, an estate is the economic valuation of all assets owned by an individual. This includes money, real estate, investments, and personal belongings.

Therefore, your estate comprises all the things that make up your net worth. As for estate planning, this is any action you take to determine how your estate will be handled in case of incapacitation or death. And one of the top estate planning facts that most people don’t realize is that it’s not limited to only the rich or elderly; anyone can plan their estate.

The Benefits of Estate Planning

Planning your estate can offer many benefits. Below is a look at some of them:

  • It protects your interests in case of incapacitation – an estate plan will dictate what will happen to your assets in the event of physical or mental incapacitation, thus protecting your interests
  • It protects your beneficiaries – an estate plan allows you to designate who will receive your estate in the event of your death. Without a plan, they might miss out on the inheritance
  • It prevents family disputes –family members to be engaged in bitter fights due to inheritance issues. Planning your estate allows you to avoid this by dictating who gets what
  • It protects your heirs from exorbitant taxes – property inheritance often comes with high taxes. However, estate planning allows for a smooth inheritance transfer with fewer tax burdens

The Process of Planning an Estate

A good estate plan can help you to protect your assets, your interests, and the interests of your beneficiaries. Below are some top estate planning facts and tips that can help you to secure your financial future.

Hire An Estate Lawyer

One top estate planning fact to remember is that it involves several complex legal procedures. As a result, planning your estate alone can be an overwhelming experience. Furthermore, you can make a mistake during the process, leaving your assets and beneficiaries unprotected.

Therefore, hiring an estate planning lawyer to handle your estate plan is vital. A good attorney will simplify the process and help you avoid costly mistakes. Also, they will offer you valuable advice on protecting yourself, your assets, your family, and other beneficiaries. Lastly, they can help you create a concrete plan that will allow for smooth disposal of your estate in the event of your death, thus protecting your beneficiaries from a long and costly probate process.

Take an Inventory of Your Assets and Debts

After appointing a lawyer to handle your estate, the next vital part of the planning process is to create an inventory of your assets. This should include tangible items like your home, land, real estate, collectibles, vehicles, boats, and other personal possessions. In addition, you should count intangible assets like shares, stocks, bank savings, life insurance policies, retirement plans, and mutual funds. Lastly, you can include disposable income sources like dividends and social security benefits.

Another one of the top estate planning facts to remember is that liabilities, like assets, are also part of your estate. Therefore, you must include items like loans, mortgages, lines of credit, and other debts you still owe in your inventory. This will help your estate administrator balance your assets before the beneficiaries receive their share.

Document Your Wishes

The next part of planning your estate is to document your wishes. And the best way to do this is through a last will. In the will, you can dictate how your assets will be distributed. This includes the beneficiaries to receive your assets, what assets they will receive, and when to receive them.

Therefore, the will is one of the most essential of estate planning. As such, you should seek legal counsel when drafting one. Doing so will prevent mistakes and give your wishes more credibility, averting a situation where they are challenged in probate court.

Besides a will, you can also document other wishes that should apply to your estate after you pass on. For example, according to Legal & General, you can also draft a letter of wishes. This can include details like how to dispose of your money, who to be informed (or not informed) of your death, where and how to be buried, decisions about your kids’ future, etc.

Appoint an Estate Administrator

Another one of the top estate planning facts to remember is that you need an administrator. This is the person who will be in charge of overseeing your estate and its disposal in the event of your death. If you don’t name one, a probate court will appoint a representative to handle your estate. And while your wishes will still be respected, you won’t have control over who oversees your estate.

So, who can you name as your estate administrator? It can be anyone if they meet certain requirements, including being an adult and of sound mind. Some jurisdictions also require the administrators to be U.S. citizens or state residents. Some top options for administrators include your spouse, adult children, other relatives, a close friend, or even a probate lawyer.

Create Contingencies for Your Estate

One of the top estate planning facts to remember is that incapacitation can affect your ability to manage your assets when you’re still alive. For example, you might fall sick and end up in a coma or suffer from mental illnesses like dementia and Alzheimer’s. Therefore, it’s a good idea to create contingencies for these circumstances.

One of the top contingencies you can create when planning your estate is to name a power of attorney in your will. This can be your spouse, relative, friend, or even a family lawyer who will handle various matters of your estate on your behalf. This can include the disposal of your properties, managing finances, and deciding on your medical care.

Have you taken the necessary steps to secure your financial future? If the answer is no, you should start your planning today. And with the above social security and estate planning facts, you can protect your interests and those of your dependents and other loved ones.


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