December, 2015 | Shah & Associates, P.C. Estate Planning & Business Law Blog
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Tips for Protecting Your Assets as You Age: Three Keys

December 31, 2015

Filed under: Asset Protection Planning — Neel Shah @ 9:15 am

The effects of aging, if not properly prepared for, can rob a person of their assets and rob heirs of their inheritance.shutterstock_108963875

According to recent research conducted by the University Of Kentucky College of Human Environmental Services found that 40% of people do not even think about retirement.

The first key to protecting your assets is getting a power of attorney to grant as much or as little decision making power to a trusted person.

The second key is gifting. A great example is giving your home while arranging to live in it for life, as it is no longer your asset and cannot actually be taken for expenses in some scenarios.

The third key is to use long-term care insurance to allow you to decide what care and when should take place. Having an attorney who can walk you through these steps is extremely helpful after you have done some thinking about it on your own. If you have questions about the process of protecting your assets and the steps that you can take now, contact a New Jersey asset protection planning attorney sooner rather than later.

Trusts Enhance the Options of Business Succession Planning

December 30, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

Using a trust can place business succession in a well-controlled structure that, when done earlier than succession might actually occur, allow assets to grow within the trust. The most appropriate way to do this is usually creating a grantor trust with the intentional flaw that income taxes are still paid, beneficiaries are shielded from tax and the grantor transfers assets that normally would have remained in his or her estate and been subject to higher tax rates.shutterstock_31016584

In passing along value while retaining control, assets are leveraged and will grow outside the grantor’s estate. A succession structure may be built within the trust, shielding it from future disruption such as sibling rivalry or divorce.

Putting a little bit of effort into your business succession planning can go a long way towards preventing problems now and in the future. Consult with a New Jersey business succession planning attorney today to learn more about your options and determine the key questions you’ll need to consider in this process. Contact info@lawesq.net for more information.

Creating an Elder Abuse Profile Can Trigger Prevention

December 29, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

With persons over 50 possessing 70% of the wealth in the majority of families across the United States, family members and predators alike may attempt activities equal to abuse. Key signs to look for in order to prevent abuse in these situations include a sudden appearance of a new best friend, utility disconnect notices or unpaid bills, unusual bank activity with no supporting statements or strange signatures on checks. If you notice these issues, make sure to document it and set aside a time to research it further. shutterstock_65403874

There are many reasons that outside predators and family may engage in elder abuse as it relates to finances. Family reasons for abuse include addictions, financial troubles and a sense of entitlement that assets will pass to them at any rate, or fear that disability and illness could deplete an estate.

Outside predators may operate through becoming caregivers in order to get access, contacting individuals alone through the study of death notices or overcharging for dubious services. Being aware of some of these common scams could help to protect your loved ones from falling victim.  Need help planning for elderly care or have estate planning questions? Contact info@lawesq.net.

Pets Are Precious Even in Estate Planning

December 28, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

The key in planning ahead for the well-being of your beloved pet is to find a caring organization or person and to candidly talk to ensure willingness and ability to take that responsibility.

A will can bequeath the pet and funds for its care but it cannot usually be enforced.shutterstock_103402628

A pet trust, however, has the advantage of creating a legal obligation, provisions for enforcement and how care should be given either with the death or incapacity of the owner.

Since the cost and flexibility of a trust appear to be disadvantages, less formal arrangements and non-legal arrangements may be preferred. While any plan is better than none, state laws will determine the outcome. If you are concerned about planning ahead for your pets, it’s a good idea to consult with a knowledgeable estate planning attorney who can advise you of all the various assets and property that you may need to consider in the comprehensive estate planning process.              

What is the Chan-Zuckerberg Initiative?

December 25, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

The just-announced Chan-Zuckerberg Initiative may change the face of high network giving, as rather than granting funds to an outside entity they acted to give to themselves.

The CZI was structured as an LLC which does give up some tax benefit but in return gains certain freedoms, like the ability to lobby legislation, engage in public policy discussions and to take part in for-profit initiatives close to the core business. This is not something that a non-profit organization can do.shutterstock_284134766

One note of caution if you find yourself in the situation of considering an initiative like this is public perception. The idea of a for-profit may remove the luster from the traditional public appreciation of great philanthropy.

Asset Protection Tips for the Smaller Enterprise

December 24, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

Keeping in mind that doctors, business owners and real estate investors are most vulnerable to attacks on their assets, the goal for protection is to actively plan and plan ahead. Every six months, you should inventory every possible asset. Never be in the psychological position of just waiting for the future.shutterstock_216955003

Be very careful with the written promises of contracts and make sure giving your word is done as the business rather than as a personal guarantee. Utilize multiple strategies based on your comfort zone and with the opinion of your financial and legal advisors.

Finally, explore any possible state and federal exemptions for assets. Asset protection planning is an ongoing process and one that should be done in conjunction with a knowledgeable attorney.

Business Succession Planning is About More than a Check

December 23, 2015

Filed under: Business Succession Planning — Neel Shah @ 9:15 am

Forbes Asia recently interviewed a fast food entrepreneur in Hong Kong who shared insights into business succession that are universally applicable. Although family businesses account for 80% of the global economy, next to divorce and bereavement, succession may carry the greater stress. The letting go process for an owner can be a real psychological barrier. In any plan, family must come first, then business.shutterstock_123839953

The harmony, relationship quality and consensus is important for any person in planning a business succession. It is also important to consider a family assessment of ages, talents and wishes and this should be discussed in a transparent manner.

This could involve the creation of a family charter which contains defined policies and procedures like values and traditions. It should be kept in mind that psychologically, children may feel they can never step out of the parent’s shadow and may need to pursue their own dreams outside the business.

Watching the Costs of Elder Care

December 22, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

Part of prudent cost prevention lies in understanding the spectrum of health for seniors as well as the spectrum of costs. Home care of a non-medical nature such as laundry and other related services as well as home healthcare such as checking temperature, pulse or equipment will both average around $20 an hour.shutterstock_242465323

Based on a 250 day work year this is about $40,000 and can represent a significant cost if you are not properly planning for it. Daycare provides supervision and social activities and will average about $17,000.

Adult medical daycare will add 5% to 15% to that cost. Assisted living will annually run around $43,000 and a full nursing home care is around $80,000. Having a plan in place to address elder planning is crucial for your success, so find an attorney you can trust today.

What Are The Estate Planning Complications for an Art Lover?

December 21, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

As art collections increase over time, they become more important in terms of estate value. They can also become more problematic if the heirs are not lovers of the medium. The use, donation and loan of art can involve a transfer of wealth valuation which can benefit collectors as appraisals are often not done. shutterstock_240659758

As art is an illiquid asset, an appraisal by an independent broker can be set low and can be found acceptable by a tax man. recognizing potentially high gift taxes, one interesting tool can involve transfer of ownership and not the work itself, done in exchange for a promise to pay or replacement with a trust with a lease back provision.

Make sure to consult with your estate planning attorney today to learn more about how to protect yourself if you are an art owner and wish to maximize its value or determine where it will go after you pass away.              

Are The Holidays a Good Time For Estate Planning?

December 18, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

Holidays are, for many families, a gathering of multiple generations and if entered into properly, could be an uplifting opportunity to discuss both past living and future planning. A start could be a video or just the opportunity for the elders to talk of their lives including successes and mistakes.shutterstock_341515610

This would almost always often encompass the financial aspect. Expressed wishes and hopes can lead them to talk of where things are at and what things are needed.

And, at the least, a future time for greater discussion or follow up can be agreed upon. Children, both adult and younger should be included so that values and examples of good valued action can be passed along. Getting the family together represents a significant opportunity for engaging in estate planning over the holidays.

Playing Asset Protection in Defensive Mode

December 17, 2015

Filed under: Asset Protection — Neel Shah @ 9:15 am

As we cannot protect your life in every possible contingency, a good defense can be a good offense against those who would otherwise take your assets.shutterstock_100931329

This includes umbrella insurance to supplement your liability insurance, perhaps equal to your net worth or a multiple of a net worth. This can help to defend from attack as can statutory exemptions which might vary from state to state. Careful placement of your assets can also help whether with a less liable spouse, an LLC or an S Corp. You should always work with an asset protection attorney who has experience in this field to determine what is most appropriate for you.

Both an LLC and an S Corp are flow through structures where taxes are reported on personal returns. Another option is to use a family limited partnership which can dissuade creditors since they cannot access partnership assets and can procure only limited access to distributions.

Business Succession Tips for Families

December 16, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

It’s estimated that between 80% and 90% of businesses in United States are controlled by or owned by families, and as many as one-third of them are Fortune 500 companies. This doesn’t mean however that all family owned businesses in America are big corporations. In fact the majority of them are small or mid-sized businesses. Family owned businesses also represent another important statistic in the United States, which is that they account for up to 78% of jobs created within the country.

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One thing you need to know about owning a family business is that more than 30% of all family in businesses make it to the third and second generation, 12% make it to the third generation and 3% to the fourth and beyond.

This means that even though it was a given that you or your parents would have taken over the family business, you need to understand how future generations are less likely to take on these responsibilities. This presents questions related to whether you should consider selling or developing your business in such a way that it is capable to capitalize on the maximum sale cost down the road. You should evaluate all possible options before simply assuming that the children you have will take over the family business.

Consulting with a knowledgeable business succession attorney can help to answer many of the questions you have about the succession process and give you a better perspective on what you need to consider.

Elder Costs Are On the Rise

December 15, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

Both enrollment and spending on Medicaid rose just under 14% in the last fiscal year. But the good news was that the per person per month averages were actually lower. The Kaiser Family Foundation Survey indicated that as many newly eligible individuals are both younger and healthier that it is important to consider how your healthcare costs may rise. shutterstock_329270795

Living longer and potentially needing services sooner in life than you expect can represent a significant challenge to your savings. States where costs have increased are in many cases saving overall as other costs such as mental health decline.

This is overall good news for seniors looking to guard cost, increases in spending totally covered by the federal budget through 2016 and 19% thereafter.

Understanding what you may be responsible for in terms of paying for your healthcare is one reason to consult with a New Jersey elder law attorney who is knowledgeable and experienced in this area.

The Power of Delegating Control With End-of-Life Documents

December 14, 2015

Filed under: Healthcare Power of Attorney — Neel Shah @ 9:15 am

Any person should have these three end-of-life documents in his or her arsenal. While many estate planning documents consider your options after you pass away, these help to give family members the authority to step in and help if you are incapacitated but still alive.Estate planning documents in a leather briefcase - vertical

Make sure you have considered these documents and who you want to serve in these roles:

  • Information release form: This gives doctors and medical professionals permission to share medical records details with designated representatives.
  • Durable power of attorney: Assists your agents with your legal and financial affairs management.
  • Advance directives: You should never assume that your family members know or are willing to carry out your medical decisions in the event tha tyou become unable to. A healthcare durable power of attorney names this representative, and a living will outlines the medical treatment you want or do not want at the end of your life.

Without delegating control in this manner, you can place your family in a difficult situation trying to determine what you would want. This can even lead to squabbles between family members who disagree. Where possible, having these documents in an easily-accessed place allows for your wishes to be carried out with as few concerns as possible. Make sure you have discussed this with your New Jersey estate planning attorney.

Tips for Estate Planning with your Parents

December 11, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

 Parents should have a plan to avoid court intervention at the time of death. Minimizing costs while maximizing assets should be a primary goal of this and you may also be able to accomplish providing for financial and healthcare decisions. In many cases, most parents did not wish to have their estate go through the process of probate but by the time their loved ones face it, it is too late to have alternative plans in place.shutterstock_184815692

Have needed documentation such as creating and funding a revocable living trust if this is beneficial to your situation. Another goal of estate planning parents should be to create flexibility in tax decisions like signing a fiduciary to react to current tax laws as necessary.

Determine the conditions necessary for defining incapacity. Hire the right fiduciaries, clearly detail both final wishes and the distribution of personal effects. Initiating a dialog with your parents by focusing on healthcare helps to avoid all of discussion of assets and allows the door to be pushed open. This sets the groundwork for future progress.            

Estate Planning: How Couples Can Start Now

December 10, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

 

According to recent research by NerdWallet, only 2/3 of couples have proper insurance and 43% of those couples say they are not financially prepared for estate planning. Here are five simple steps to take into account what you need to do for estate planning. shutterstock_128323664

  1. Calculate the need by adding all of your long term expenses multiplied by the number of years you need to cover and then subtract any annualized income.
  2. Know the details. Only 67% of individuals without children know the details of their policies and women are less likely than men to know. You need to know who holds the policy, why it was taken out, the total payout costs and possible exploration.
  3. Do a will. A 2013 Harris poll reported that as many as 70% of adults with young children had no will at all.
  4. Keep your records where they can easily be found. 30% of married adults and children do not know how to access critical information regarding medical conditions or other issues.
  5. Talk about final wishes. Of those married individuals with children, 55% knew their spouse’s wishes but the remainder did not. Having these conversations and knowing how to have these basics in place can help to prevent confusion or frustration if something were to happen to you.

Asset Protection Planning: What to Do If A Disaster Happens?

December 9, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

If a disaster impacts your family, you may also be concerned about how it will impact the assets you have already set aside and made some effort to protect. Your earning power is what enables you to prosper throughout your work life, but it can all be halted in an instant in the event of a disaster.

If you were to become disabled, however, all of this can be brought into question and perhaps your previous planning doesn’t meet your current needs. If you are disabled, social security disability payments can kick in but you must have a condition lasting at least one year and you must have worked long enough and recently enough to trigger this.shutterstock_195425765

Worker’s compensation might also be able to contribute if the injury happened while you were on the job. Some employers may also offer a long term or short term disability insurance of varying lengths. You can look into purchasing disability insurance but it may cost 5 – 10 times what it was with a group policy. If you were to pass away unexpectedly, Social Security survivor benefits and group coverages may not be enough. Calculations of needed amounts can be conducted at www.lifehappens.org. Term life insurance is another critical part of your asset protection planning strategy that can help to protect your family if an accident were to take your life.

Business Succession Planning: Challenges of Selling the Family Business

December 8, 2015

Filed under: Business Planning,Business Succession Planning — Neel Shah @ 9:15 am

Selling a family business, whether it’s due to lack of succession options, estate issues or the need for liquidity can cause problems as a result of sudden liquid wealth.

Passing on the family business also carries with it needs worthy of great consideration and counsel from trusted advisors. Whether to travel, work or pursue hobbies or philanthropy, the business structure within the family operated will be gone if the business is passed on to someone else and this can be an emotional struggle.shutterstock_321333917

Planning for all life elements should be pursued as an integrated process with defined goals. Investment has to move from the business into diversified streams with clear communication with all family members as far as the consequences of the sale. An individual thinking about passing on the family business should also be aware of lifestyle creep which means increasing spending just because the funds are available to do so.

Tips for Those With Elderly Parents: How to Prevent Danger in the Home

December 7, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

Confusion and dementia are serious concerns for the elderly population in the United States. Both of these can contribute to compromising freedom and flexibility for an elderly individual, and prompting family members to be concerned about the appropriate level of care necessary for individuals in this situation.

The first key to handling dementia and confusion is to address any treatable problems that could be eliminated. These include sight, hearing and depression, for example. In balancing safety with independence for your elderly loved one, consult friends, caregivers and relatives for insight into likely behaviors and risks.shutterstock_170076899

Issues may include how long an individual can remain alone and whether your loved one can safely get back to his/her home when going outside. Another concern to be aware of is whether your loved one is capable of recognizing danger signs like smoke and appropriately calling for help.

If the senior you are concerned about already experiences life threatening episodes, you need to ensure that he/she has access to proper medications and proper dosages. Basic concerns like being able to prepare food and turning off the stove or oven and safely using the toilet and knowing who is appropriate to let inside the home are also key concerns when you are addressing issues like dementia and confusion. For more information about safely helping your elderly loved one, contact an elder law planning attorney today.

Estate Planning for the Never Married

December 4, 2015

Filed under: Estate Planning — Neel Shah @ 9:15 am

According to PEW research, in 2012 the number of unmarried individuals aged 25 or polder had reached 20% of the population. This is a significant increase of 9% since 1960. Although the majority of individuals think that estate planning follows after marriage, if you’re not married the concern can actually be even greater.shutterstock_162693635

There is no clear path for decision makers and no plan means defaulting to an expensive and rigid legal state structure if you are not married and aim to avoid estate planning.

One key to avoiding these challenges is to reevaluate your plan every five years yourself as friendships and relationships may change relative to who possess the healthcare proxy, power of attorney and the like.

A second key is to consider carefully the advantages and pitfalls of combining financial and legal medical decisions in one single person. Contact an estate planning attorney to learn more about your options to determine what is most appropriate for you.

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