IN THIS ISSUE

RETIREMENT JITTERS

ELDER ABUSE OF DIANNE FEINSTEIN

A BREAK IN THE CASE

ARTICLES OF INTEREST

I THINK DOGS ARE THE MOST AMAZING CREATURES; THEY GIVE UNCONDITIONAL LOVE. FOR ME, THEY ARE THE ROLE MODEL FOR BEING ALIVE. -- Gilda Radner

For as long as I can remember I have always had a dog and to this day, I think I

can remember the name of each one of them. Pets are a wonderful source of joy, comfort, and companionship regardless of whether your pet of choice is a dog, cat or another type of animal. They listen to us without judgment, make us laugh with their antics and almost always know when we need a quick cuddle. Most of us here at Garden State Trust Company have a dog, and some even join us in the office on occasion!

While pets are great for children, solo agers, in particular, should not miss out on the companionship and other benefits that a pet can provide. In fact, if one is looking for added justification, consider the findings presented recently by the American Heart Association that shows that pet owners live longer healthier lives.

The data suggests that those who owned a dog or had a spouse or child with them when recovering from a heart attack or stroke had a reduced chance of death. Part of that might be that people with dogs tend to walk those dogs and exercise more. Another part might be that "interacting with dogs can boost your production of 'happy hormones' such as oxytocin, serotonin and dopamine". This may translate to lower stress, even lower blood pressure and cholesterol.

Although owning a dog may not be a huge expense, it should still be added into the calculations for retirement planning. Some estimate the average cost to be around $2,000-2,500 annually, counting food and vet bills. Plus, the dog will likely tie down its owner and make travel more difficult. Given that travel is the number one retirement aspiration, the timing of pet ownership should be considered alongside other bucket-list items.

Dogs can require a lot of attention and energy. That could be a big benefit in retirement, turning a lot of unstructured time into structured time. It can also abate loneliness in that time and help one to stay fit. Aging will take its inevitable toll, so we need to be able to keep up with the dog as we age and consider their age as well. An older dog may be satisfied to just keep its owner company, while a younger puppy may need lots of attention. Additionally, the breed can make a big difference. Smaller breeds could be easier for a senior to control, and some breeds are much more sedentary than others. A full list of dog breeds is available at the American Kennel Club here.

If you are considering specific breeds rather than going to a local shelter, you may encounter scammers along the way. The Humane Society recently published an article about the increase in scammers for those looking for puppies. There are scams where the conditions for the breeder are misrepresented, and the animal comes from a "puppy mill" which produces pets in deplorable conditions. The puppies may prove unhealthy and unable to survive. Some scammers claim they need funds to get the animal through customs, but then they vanish once the money has been sent.

Another potential problem that is often overlooked is designating a new caregiver given the untimely death of the pet owner. It is a good idea to update your will often anyway, but including provisions for those who will take the pets can be helpful both in ensuring family harmony and possibly providing additional support for the pets. Those that have the means might even consider a pet trust. 

We are familiar with many of the overlooked pitfalls that come from wealth transition and estate settlement. If you would like us to look at your existing estate plan, let us know. 

ASK GARDEN STATE TRUST COMPANY

Can I save income taxes by transferring my investments at Schwab into a living trust? 

Thank you,

Ellen G 

Dear Ellen G,

Thank you for your question. The simple answer is that there is no income tax savings by transferring your Schwab investments into a living trust. Once inside the revocable living trust all income and capital gains from these investments are taxable to you, the grantor. The grantor is the person establishing the revocable trust and remains the owner of the assets and property in the trust. The trustee of the trust has legal title to the trust assets NOT ownership.

If you chose us as trustee of your living trust you would receive our professional expertise in investment supervision. With Garden State as your trustee you would receive uninterrupted financial management should you become ill or incapacitated. This is a major benefit of a living trust.

Should you want to discuss the benefits of a living trust in more detail, please do not hesitate to contact me.

Sincerely,

Adam Brower

President

(732) 255-500

abrower@gstrustco.com

2101 Highway 34 South, Suite A

Wall, NJ 07719

HAVE A QUESTION ON TRUSTS, WILLS, OR INVESTMENT MANAGEMENT?

For general informational purposes only. This information does not constitute legal advice.

There has been a noticeable uptick in delaying retirement, and even coming back into the workforce from retirement. Something seems to have spooked retirees, and soon-to-be-retirees. Read about this in our Informational Article, Retirement Jitters. In another Informational Article, read about a lawsuit filed earlier this year by the now late Senator Diane Feinstein's daughter that made the sensational claim the Senator was the victim of "financial elder abuse."

With Halloween a couple of weeks away, read in the Of Interest link 63 Frightfully Fun Halloween Dessert Ideas from the Food Network. We hope you have a wonderful and safe Halloween this year!

Sincerely,

Something seems to have spooked retirees, and near retirees. There has been a noticeable uptick in delaying retirement, and even coming back into the work force from retirement.

According to a survey reported in the trade publication Investment News, two-thirds of those in their 50s or early 60s have thought about delaying retirement, or have already done so. Nearly half of the surveyed retirees (44%) have returned to the world of work, or are considering it. Financial insecurity is the primary driver of the phenomenon, according to the survey. Persistent inflation and increasingly volatile financial markets have caused many to reassess whether they really have adequate resources to retire. Many in this age group may recall the economic challenges of the late 1970s, when inflation was more severe.

However, financial worries are not the only factor. Some people just love their work. Some appreciate the mental stimulation of being in the workplace. Some feel that employment adds purpose to their lives.

A survey by payroll company Paychex had similar results. One-sixth of retired respondents were considering a return to work after an average of four years in retirement. Of those who had "unretired," 55% said they needed more money, 47% said they had gotten bored in retirement, 45% gave personal reasons, 41% expressed worries about inflation, and 33% needed health insurance coverage (multiple answers were allowed). Many of these were asked by a former employer to come back to work because of a labor shortage, and 59% reported working remotely.

60% of those who left retirement were happy with the experience of going back to work. 50% said they were energized, 48% were excited, only 27% were nervous. However, 71% reported that younger employees had occasionally made them feel insecure about their abilities.

Despite the trend of having longer or second careers, the fact is that the labor force participation rate of those age 65 and up remains well below what it was before the pandemic, according to The Wall Street Journal. In February 2020, 26% of those 65 and older who were not disabled were working, a modern peak. The pandemic and the recession triggered a great many retirements, bringing the participation rate down to 22.7% by July 2021. In August 2023 the rate stood at 23.7%.

Are you concerned about your retirement readiness? We'd be pleased to discuss your situation and offer our insights for today's retiree.

(October 2023)

© 2023 M.A. Co. All rights reserved.

A lawsuit filed earlier this year made the sensational claim that Senator Dianne Feinstein was the victim of "financial elder abuse." The suit was brought by the Senator's daughter, who held a power of attorney for the Senator.

Senator Feinstein's husband, Richard Blum, died in February 2022. Blum's three daughters from an earlier marriage were his principal heirs. Blum's net worth had been estimated at more than $1 billion, though his real estate holdings may have fallen in value during the pandemic. The lawsuit contended that a $5 million marital trust was supposed to have been established for Senator Feinstein at Blum's death, and a year later it still was not. Quarterly payments due to her had not been made. Reimbursement of medical expenses was also requested--the Senator had had a nasty bout with shingles earlier in the year. The foot-dragging was characterized as elder abuse.

The individuals who managed Blum's estate responded that due to liquidity problems, the need to pay estate taxes, and the complexity of the estate's holdings they had been unable to fund the trust, but would do so as soon as practical. The Senator's death may have mooted the case, but her estate might yet pursue a claim against the trustees.

Elder abuse is a serious problem in the United States, and financial abuse can be an element of it. According to the National Council on Aging, one in ten Americans age 60 and older have experienced some form of elder abuse. Estimates of the cost of financial fraud to older Americans range from $2.6 billion to $36.5 billion every year. The reason the range is so wide is that it has been estimated that only one in 24 cases of elder abuse is ever reported to the authorities. Not all such abuse concerns money--there can be physical or emotional abuse, neglect, confinement, or willful deprivation of care.

On the surface, the financial mistreatment of Senator Feinstein does not seem to rise to a level justifying the accusation of elder abuse. But it should be noted that hiring amateurs for the job of estate settlement commonly leads to delays in financial distributions. A bank trust department or a trust company has the staff, equipment, and procedures for handling executorships and trusteeships, it is their daily routine. They are focused on this work, it is not a sideline to other business matters, as so often happens with individuals charged with fiduciary responsibilities.

(October 2023)

© 2023 M.A. Co. All rights reserved.

In September 2020 the New York Times published details from President Trump's 2016 and 2017 tax returns. In June 2021, ProPublica published a story based on the tax returns of thousands of wealthy taxpayers, including Jeff Bezos and Elon Musk. The publication of private financial information that had been in the custody of the IRS caused an uproar, and there were promises of a speedy investigation. Billionaire Ken Griffin has filed a lawsuit over the release of his information, which is still pending.

The investigation has taken more than two years, and one individual is now believed to be responsible for both leaks. Charles Littlejohn has been charged with one count of unauthorized disclosure of tax information, and could face five years in prison if found guilty. He apparently worked for a contractor that had access to files at a West Virginia IRS center. Details on how he committed the crimes, or how he was caught, have not yet been released.

Security at the IRS has been beefed up. Said IRS Commissioner Danny Werfel: "Any disclosure of taxpayer information is unacceptable. The IRS has put in place new protocols and protections that tightened security, and our aggressive work in this critical area continues in order to protect the tax and financial information of taxpayers."

According to the professional journal Tax Notes, victims of the IRS leak were contacted by the Justice Department to inform them that it is considering entering into a plea agreement regarding the disclosure of their tax return information, and to inform them of their rights under the Victims' Rights and Restitution Act.

Former Acting IRS Commissioner David Kautter observed: "Given the amount of harm caused, while I am glad that the federal government has finally charged someone, I am not sure that the charges brought are proportional to the amount of damage done." Perhaps that is related to the plea agreement.

(October 2023)

© 2023 M.A. Co. All rights reserved.

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