April, 2016 | Shah & Associates, P.C. Estate Planning & Business Law Blog
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Is a Trust a One-Size-Fits-All Document?

April 29, 2016

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

In meeting with an estate planning attorney, one of the options that may be recommended to you that of a trust. A trust can be two primary types: living or testamentary. A living trust is created during your lifetime by giving your signature on an authorized trust document. A testamentary trust is generated through your will which means that this trust doesn’t actually exist until you pass away.shutterstock_264000620

There are several different things you can accomplish with a living trust, which is why they are increasingly popular with individuals accomplishing their estate planning. The goals you can accomplish with a living trust include:

  • Creditor protection
  • Protection for children with special needs
  • Allowing for planning for children from previous marriages
  • Allowing for business succession
  • Managing assets for children until they have reached an age which you select
  • Deferring or reducing estate taxes
  • Accomplishing vacation home management across multiple generations

Many people believe that trusts are one-size-fits-all and that they accomplish basic probate and tax problems. This is not true. Rather, these are legal instruments that can be designed for your individual needs. They are frequently part of your plan and a crucial part of that plan. If you have not carried out other elements of the plan, your trust may be relatively useless. Consult with a New Jersey estate planning attorney today to discuss a living trust and other options for your estate planning.

 

                                                                                                                

Who Needs to Be Involved in the Business Succession Planning Process?

April 28, 2016

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

Aside from you and any key stakeholders with your company, you may also need to engage with a financial advisor, a business succession expert and a business succession planning attorney. This is because there are many different questions that can arise during the process of determining the right course for your business. shutterstock_290148488

The succession planning team should almost always include the owner’s family, the owner’s advisors, and leadership and management team. This is so that you can have questions answered quickly and determine what individuals will play specific roles in the process of transitioning the business in the future. Do not hesitate to reach out to an experienced business succession planning attorney as soon as you believe that you are prepared to complete this process.

There are numerous questions that need to be answered before you consider putting together your business succession plan and you should also conduct a review of any existing documents such as a buy-selll agreement. These documents can help to dictate what will happen in your business succession planning and give you a firm grounding for where you go from here. Consulting with an attorney and your advisors allows you to accomplish the meaningful goal of business succession planning.

How Liability Insurance Can Help with Your Asset Protection Planning

April 27, 2016

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

The first line of defense to protect of your assets from future claims is to consider insurance. This is because insurance on its own can help to mitigate a significant number of risks. You should also, of course, consult with a knowledgeable New Jersey asset protection planning attorney to learn more about your options and to discover other strategies and tools that can be useful in this process.shutterstock_325745573

Some of the most common types of insurance that can be used to help ward off potential lawsuits and attachments to your personal assets include malpractice, business, automobile, homeowners, umbrella, and long-term care policies. Liability insurance is essential for providing the funds necessary for paying damages and it can also frequently include payment of some or all of the legal fees linked with a lawsuit.

Now is the time to get an umbrella policy if you do not already have one. It is relatively inexpensive to obtain an umbrella policy when thinking about more advanced ways to protect your individual assets. That being said, you may also choose to use both methods to protect your assets significantly. Verify that all of your policy limits on any existing insurance policies are well in line with your net worth. It’s a good idea to evaluate this on a yearly basis so that you can determine whether or not you need to make adjustments.

                 

What is Medicaid Planning?

April 26, 2016

Filed under: Long Term Care,Medicaid — Neel Shah @ 9:15 am

Medicaid planning involves a careful consideration of an individual’s assets to determine whether or not he or she legally qualifies to receive nursing home benefits for Medicaid. Many individuals who do not carefully consider this process or who do not have other significant resources to support them in their older years such as long-term care insurance, may have to use all of their personal assets and resources to support an individual who has suffered a healthcare event.shutterstock_322363940

It can also be very problematic for individuals who have no other resources because family members can feel the pressure of having to provide for a loved one who needs nursing home care. This is why it is a good idea to consult with a New Jersey Medicaid planning attorney. One of the most common questions considered in the Medicaid process is whether or not you should get rid of property.

Bearing in mind that Medicaid has a look back period to explore whether or not you have attempted to give away assets so that you may qualify for Medicaid, it’s a good idea to consider your Medicaid planning well in advance. This allows you to take advantage of legal strategies that can help prepare you to qualify for Medicaid appropriately.

Even if you are not yet concerned about your healthcare and your need for potential nursing home care, you should consult with a New Jersey Medicaid planning attorney now to learn about all of your options. Putting a plan in place well in advance is the best approach.

 

 

Benefits of Working with Attorneys and Advisors Who Are In the Know

April 25, 2016

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

There are many different reasons that you should always consult with a knowledgeable attorney and advisors in the event that you have any kind of a legal issue, and a recent 60 Minutes report regarding investigations into the life insurance industry only highlights this point.shutterstock_17080654

According to audits of major life insurance companies, it has been discovered that there is a systematic practice of behavior avoiding paying numerous beneficiaries. Individuals who take out a life insurance policy typically pay premiums and expect that when they pass away that your loved ones will receive the death benefit. In some recent settlements, however, more than 20 of the nation’s largest life insurance companies have paid over 7 and a half billion dollars in back death benefits.

There are also 35 life insurance companies who have currently not settled and are still under investigation for failing to pay in the event that the beneficiary was unaware that there was a policy, which is not that uncommon. Some beneficiaries never come forward because they do not know that the policy exists.

Working with a knowledgeable advisor and attorney in this situation can increase the chances that your benefits will make their way to the next of kin. Your estate plan should include legal documentation as to who gets what but also go through the process of integrating assets into your plan for maximum benefit.            

What You Should Know About Family Business Succession Planning

April 22, 2016

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

Unfortunately, the majority of family business leaders do not engage in the process of business succession planning. Even if they do engage in it, they might not do it properly or they wait until it’s too late to achieve maximum impact.shutterstock_321333917

The average longevity of a CEO in a non-family business is six years, but CEOs in family-owned businesses usually stay for 20 to 25 years. What follows are several tips for succession planning. It’s important to remember that succession planning can occur at numerous levels throughout the organization and it is important to think at least about the top 5 to 8 positions to put into your written succession plan. Keep these points in mind.

  • Think outside of seniority
  • Use a professional process of regular performance assessment, skill evaluations, and reviews of career history
  • Rank possible successors based on key criteria like learning agility, past work experience, past performance ratings, the ability to take risks, decision-making ability, prior leadership positions, education and problem-solving ability.
  • Prepare the next generation with comprehensive planning
  • Consider a leader outside of the family

Although this process can be difficult for any family business, it can be made much easier by consulting with a New Jersey business succession planning attorney.

 

 

Panama Papers: What U.S. Taxpayers Should Know About Tax Havens

April 21, 2016

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

Off-shore planning has become increasingly popular over the last several years and a recent news story known as the Panama Papers has important implications for those considering conducting their planning off-shore.shutterstock_295936574

The Panama Papers are more than 11 million leaked files from a law firm in panamas database. These files have since been shared with numerous media outlets around the world. The documents allegedly show how the law firm helped high profile clients like celebrities and government officials dodge sanctions, evade taxes and launder money.

Although the law firm claims that international standards have always been used by their firm in working with these clients, it is important to consider what you can learn from the Panama Papers scandal. There are plenty of legitimate purposes to consider engaging in off-shore planning, primarily because you will receive favorable creditor protection laws and benefit from estate planning strategies.

Frivolous creditors may be dissuaded by the fact that you have assets saved off-shore, for example. If you have interest in planning ahead for your own future and have questions about legitimate off-shore planning, consult with the attorneys at Shah & Associates today.

What Individuals Should Know About Taking Care of Their Grandchildren’s College Expenses and the Connection with Elder Law

April 20, 2016

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

There is no doubt that college is one of the most significant investments that individuals make. According to the Department of Labor, the price index for college tuition grew twice as quickly as the consumer price index since 2003.shutterstock_272486666

When your children are facing financial challenges associated with paying for your grandchildren’s college education, concerned grandparents may want to step in by helping with these costs. Using some plans like a 529 savings plan can be beneficial.

These plans can be used to help with qualified higher education expenses like fees, books, tuition and some room and board expenses. In the event that any funds are used for non-qualifying expenses, however, a 10% tax penalty and federal taxes do apply. 529 plans also receive what’s known as favorable treatment for the purposes of a student wanting to receive federal financial aid assistance. It is a good idea for grandparents to consider how separate gifts to their various grandchildren can impact their overall estate planning.

One of the most common issues is fairness as not all grandchildren may have the same financial need. Unequal treatment among grandchildren can cause anger and resentment. It is also important for grandparents to carefully consider their own future needs for long-term care. Nursing home care or private at-home care from a caretaker can be costly so you need to balance these potential needs with supporting your grandchildren. Consult a knowledgeable New Jersey elder law attorney today.

Who Should Consider Asset Protection Strategies?

April 19, 2016

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

We live in a world where litigation is unfortunately all too common. Any individual in a high-risk profession should consider the benefits of engaging in asset protection planning now. Some example include paramedics, architects, recreational fliers, pilots, physicians, and contractors. Others like professional athletes, individuals with a high net worth, entertainers, and political figures should also consider the benefits of asset protection planning as they are placed directly in the line of attack for lawsuits.shutterstock_100931326

Asset protection planning is another way to limit your exposure as well and these strategies can be beneficial when you work with an experienced asset protection planning attorney. If you have any exposure to risk, it is important that you consider looking into asset protection planning immediately.

It is always better to engage in asset protection planning well before a claim has arisen against you. If you suspect that you may be sued at some point in the future, it’s a good idea to engage in asset protection planning now. Waiting until it is too late and someone has already brought a claim against you can have significant repercussions for your future. Do not hesitate to reach out to a New Jersey asset protection planning attorney today.

What You Should Know About New Fiduciary Rules

April 17, 2016

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

In terms of your retirement accounts, a new possible change coming down the pike could mean that your broker can be classified as a fiduciary.  In the next few months, the Department of Labor will be putting together the final version of a new standard for fiduciaries. This represents what many consider to be the biggest changes to ERISA in the past four decades. shutterstock_125871293

 

Since the initial definition of fiduciary outlined in ERISA in 1974, the world of 401(k)s has evolved a great deal. Investment advisors currently connected to the SEC have to be held to general fiduciary standards of conduct, putting the client’s needs in front of their own. The standards for securities brokers, however, are somewhat different. Securities brokers are regulated by FINRA and the framework is one of suitability, meaning that a broker does not have to put the client’s needs first. If a dispute happens between a client and broker, the situation is handled with arbitration.
Opponents of the change argue that it will hurt investors. There’s no doubt that with the increased monitoring costs associated with this kind of exposure that clients may be the ones absorbing the higher cost. Some firms may also decide that the costs of compliance are simply too high and exit this altogether.

Tips for Identifying the Right Estate Plan for You

April 15, 2016

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

According to research, as many as 57% of Americans do not have a will and as many as 69% of parents with minor children do not have a will. Even though many individuals are familiar with the basic importance of planning ahead, many just simply cannot find a way to follow through.shutterstock_280234760

Most people avoid getting a will because they think it will be too complex or too expensive to hire an attorney. Thankfully, this is not true. Many people go on the other end of the spectrum and assume that they can complete a will or other essential estate planning documents on their own. This can be just as detrimental as not having a will at all because failing to comply with state requirements could mean that your will is invalid, rendering a legal battle and mass confusion after you pass away.

Basic estate planning tools like a will can typically be accomplished after a short meeting with a knowledgeable New Jersey estate planning attorney. Meeting with an attorney can also give you more information about other aspects of managing your estate planning that could be helpful for accomplishing your goals such as using trusts. Setting up a meeting with a New Jersey estate planning attorney can be a significant step forward for protecting your interest now and well into the future.

How Can Estate Planning Help You As Well As Your Business?

April 14, 2016

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

If you spent the last couple of decades of your life working to build your business from zero to a profitable venture, you might not realize that the government could levy an estate tax or death tax on your business and reduce your company’s value by as much as 50%.shutterstock_165450731
If family members, former spouses, and co-owners come out of the woodwork when you pass away suddenly, your business could be back to the zero level in less than one year after you pass away. Fortunately, taking care to plan your estate properly can help to minimize the challenges associated with this. Powers of attorney, trusts, wills and estate planning are some of the most common legal tools used by business owners thinking ahead to avoid the negative implications of unfortunate events.
One of the primary reasons that estate planning can be so beneficial for your business is that it gives you more options. A buy-sell agreement, for example, can help to ensure that when any owner passes away then the deceased individual’s interests are automatically purchased by other owners or beneficiaries of the deceased owner. This helps to avoid the chaos that might otherwise ensue after an untimely demise of a business owner.

Elder Law vs Estate Planning: What is the Difference?

April 13, 2016

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

When a new client first sets up a meeting with an elder law specialist or an estate planning attorney, the primary focus of their attention is usually in developing a will or some of the other basic tool associated with estate planning.shutterstock_265837223

While an estate plan certainly is important and covers the scenario of what happens when you pass away, you also need to think carefully about what happens if you live. This is because more individuals are living longer and will have concerns about making their finances last during this period whether they are healthy or whether they are impacted by an injury or a long term care event. An elder law and estate planning attorney can help you accomplish all of these goals.

An estate plan helps you answer the first question but only your New Jersey long term care plan can help you answer both of those questions. In order to approach your planning holistically, consult with a knowledgeable attorney who can help you think about what happens to your assets when you pass away, as well as how you construct your plan and assets to help you while you’re still alive. Carefully planning for your own future is just as important as thinking about how you can help your beneficiaries after you pass away.

 

 

Asset Protection Planning Accomplishes Multiple Goals At Once

April 12, 2016

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

Most people are familiar with the basic idea that asset protection planning helps them accomplish the goal of shielding some or all of their assets from creditors. There are other benefits associated with going through this process, however, the biggest of which is financial privacy. Using simple legal vehicles to protect your assets is a great way to retain privacy of ownership of these assets. Many forms of wealth like real property can be owned privately, therefore reducing what others perceive as your visible net worth. This can help to minimize the chances of a predatory lawsuit going after your individual assets.shutterstock_132410183

As an example, when a lawyer reviews a case to determine potential damages, usually he or she will look through a public records search to analyze what assets are available that could be liquidated in order to satisfy a judgement. When it is difficult or impossible to find assets tied to an individual’s name, the chances of that lawyer ultimately agreeing to take on the case are much less reduced.

In this way, asset protection planning not only helps to shield your assets in the event that a lawsuit is initiated, but it also discourages predatory individuals and other attorneys from beginning cases against you. These are just a few of the benefits associated with comprehensive asset protection planning. Consulting with a knowledgeable New Jersey asset protection planning attorney can help you accomplish many of your goals.

 

 

What Is the Role of the Executor In My New Jersey Estate?

April 11, 2016

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

In general, the executor’s primary role is to collect assets linked to the deceased individual to pay the taxes owed by the estate and to pay the debts associated with the estate. After this has been dealt with, the executor’s responsibility is to distribute any remaining assets to the estate beneficiaries.

While this is a very general overview, there are numerous details that frequently have to be managed in a typical New Jersey estate. This is why selecting the appropriate executor for your New Jersey estate is so important. You need to walk through the process with a New Jersey estate planning attorney so that you can make an informed decision about what is best for your future. Do not hesitate to reach out to an estate planning lawyer as soon as possible.shutterstock_331571987

Selecting an executor and accomplishing other estate planning goals can be done easily when you have identified the appropriate attorney to help you with your situation. An executor will play an important role in the management of your estate, so it’s good to think ahead about the role this individual plays and the strategies and tools you’ll use to accomplish your estate planning wishes.

 

 

Tips for Passing the Torch: Three Goals for Business Succession Planning

April 8, 2016

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

There are several different things that your company can do to make the process of business succession planning that much easier.shutterstock_4720285

Putting together your plan once is not enough as you must be able to revisit this on a regular basis and make potential changes as you see fit.  It’s much easier to craft a plan and make small changes as you go rather than having the entire company try to adapt in the event of a sudden owner departure.

Having a long term strategy will make transitions easier when a key individual does depart from the company. Follow these tips to achieve maximum success with business succession planning.

  1. Track potential successors. Use survey feedback to identify potential leaders who could serve the company in the future. Make sure you identify who has what in the form of critical competencies attributes and skills.
  2. Communicate with potential candidates. You should never promise them a position necessarily, but you can give them an idea that you are considering them for a future role. This gives them the opportunity to get the most out of training.
  3. Have an emergency plan. This should be a disciplined step by step approach for training successors quickly and immediately in the event that a business owner is no longer able to do this.

Is My Inherited IRA Protected From Creditors?

April 7, 2016

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

In a recent decision from the Supreme Court, IRAs are no longer classified as protected retirement funds which means that they could be subjected to creditors’ claims if the beneficiary filed for bankruptcy. In the case of bankrupted estates, inherited IRAs could now be classified as assets, meaning that they would be fully accessible to satisfy creditor claims. If you pass a retirement fund down to a grandchild or a child, you need to think carefully about whether you need to take additional steps to protect those funds.shutterstock_152512484

In some situations, putting together a tool like a stand-alone retirement trust can help to protect your asset without minimizing your beneficiary’s access to those assets. Set up a meeting with an estate planning attorney so that your will can be drafted carefully in order to avoid potential challenges and to be set up so that it carries out your wishes.

Planning ahead is one of the most important things you can do whenever you have plans of passing on assets to a future generation. There are many different strategies and tools available for estate planners today that can help you accomplish these goals.

Key Ways to Help an Elderly Loved One Avoid Loneliness

April 6, 2016

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

Unfortunately, many seniors who live alone or do not have the opportunity to leave their home on a regular basis may suffer from loneliness.shutterstock_222234442

With a rising number of seniors living alone, isolation is a key concern for family members and those providing care. What follows are five tips to help your loved one stay active and feel included:

  1. Give the elder a small garden or a pet. While pets offer endless love and joy, plants are also a good way for your loved one to feel as though he or she has something to do every day. A small outdoor or indoor garden to care for including a bird feeder can help give a lot of joy for a shut-in.
  2. Make transportation easily accessible. Once a senior is no longer able to drive, it’s a good idea to consider options.
  3. Schedule regular visits with friends and family. Having a schedule in addition to loved ones stopping in regularly will help your elderly loved one to have a more fulfilling life.
  4. Get assistance from a professional caregiver. If your elderly loved one is no longer able to complete basic daily living tasks, there are healthcare providers who assist seniors with daily tasks as well as social interaction.
  5. Find social clubs or activity groups. This is very important for seniors who do live alone. Look for activity groups that meet on a regular basis and plan ahead for transportation.

Following these tips can help make your loved one’s life easier and minimize your own concerns about your loved one feeling isolated.

Best Practices for Passing on Assets to Special Needs Beneficiaries

April 5, 2016

Filed under: Special Needs,Special Needs Planning,Special Needs Trust — Neel Shah @ 9:15 am

The tax code on its own is quite confusing but it can become even more complicated when you’re thinking about leaving behind assets for a special needs beneficiary. One of the most common points of confusion in the U.S. tax code has to do with the gift tax.

While most people are familiar with the basic magic number of $14,000 which is what each individual can give to one other person per year. Some clarification and planning strategies are necessary for individuals with special needs beneficiaries. How you pass on assets to a beneficiary with special needs is critical. Because you do not want to do this in a manner that would compromise that person’s eligibility for government programs. shutterstock_128618072

Special needs individuals frequently rely on government programs to help support them well into adulthood. It’s a good idea to talk over planning opportunities like trusts that can help to provide for an individual with special needs without removing his or her possibility of receiving assets or receiving benefits from these essential government programs. Consult with a knowledgeable estate planning attorney today to see how you can address this issue.

Three Asset Protection Planning Tips That You Should Consider Immediately

April 4, 2016

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

Asset protection planning is simply using legal strategies and structures to transform property from that which could be accessible to creditors to at least making it partially protected. There are several tips that you can use to accomplish this goal.shutterstock_115937266

  1. Rely on Liability Insurance

The first line of defense against any kind of liability is insurance including business, malpractice, professional, automobile, homeowners, umbrella and long term care insurance. Liability insurance gives you a way to pay monetary damages and may assist with some or all of the legal fees associated with a lawsuit.

  1. Maximize 401(k) and IRA Contributions

Tax favorable retirement accounts such as 401(k)s and IRAs are protected from creditors and bankruptcy although there are some limitations to this. Maximizing your contributions in this way is a good way to increase your retirement savings while also protecting this money into an LLC. If you are a real estate flipper, investor or a landlord, then it’s a good idea to contact an attorney to help shield your assets from creditors, predators and lawsuits. There are two kinds of liability that can impact individuals like this with claims like slip and falls on the property and outside liability such as situations in which creditors retrieve assets to cover a debt. Consult with a knowledgeable asset protection planning attorney to learn more about what you should know in this process.

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