Social Security meets a brave new world

Supreme court considers request for Social Security survivor benefits for twins born 18 months after father's death.
MAR 14, 2012
I read a fascinating article in the Washington Post this morning about Social Security survivor benefits for minor children. Normally, when a parent dies, an unmarried child under age 18 is entitled to Social Security survivor benefits. The Supreme Court is considering a case that involves the rights of twins that were born 18 months after the father, Robert Capato, died. It's the court's first review of “posthumous conception”—something I'm sure President Franklin D. Roosevelt never worried about when he signed the Social Security legislation into law in the 1930s. When Robert was diagnosed with esophageal cancer shortly after he and his wife Karen married in 1999, they were concerned that his treatment might leave him sterile. The Capatos decided to deposit Robert's sperm in a sperm bank. They conceived one child naturally—a son born in 2001. Robert died in in March 2002. After the twins were born in 2003, Karen applied for Social Security survivor benefits. The Caputo's naturally conceived son received the benefits; the twins did not. An administrative-law judge ruled that the twins were ineligible to inherit property under Florida law, where they lived, and therefore were not entitled to survivor benefits. An appeals court reversed the decision, saying the twins were legally survivors. Other appeals courts have found just the opposite. To quote Supreme Court Justice Elana Kagan: “It's a mess”. I don't know how the court will rule on this decision, although The Washington Post reporter Robert Barnes wrote that the Supreme Court sounded disinclined to award Social Security benefits to the Capato twins. But it could give a glimpse into what might happen in future Social Security reform. Currently, minor children of retirees are entitled to Social Security benefits worth up to half of what the retired parent collects, subject to family maximum amounts. In recent years, there's been an increase in these young beneficiaries as older men remarry younger women and start second families. I've often referred to this as the “Viagra college fund” benefit. All joking aside, I think this benefit for minor children of living retirees may be eliminated hen Congress finally gets around to tackling Social Security reform. A similar proposal was endorsed by the National Commission on Fiscal Responsibility and Reform co-chaired by Alan Simpson and Erskine Bowles. It's just one of the fascinating ethical and economic debates that will arise when the crucial safety net of the 20th century and recast for the new realities of the 21st century.

Latest News

Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel
Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel

RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

What does it take to feel 'financially comfortable' or 'wealthy' in 2025?
What does it take to feel 'financially comfortable' or 'wealthy' in 2025?

New report shines a light on how Americans view wealth today.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.