Category: Estate Planning

Recognizing the rising cost of health care and in particular of long-term care, you may be investigating the option for getting long term care insurance. This can help to give you peace of mind that if you need advanced care support, such as that provided by a nursing home, that you will be able to afford it.

Many people do not realize that long term care insurance is a separate kind of insurance from Medicare and that Medicare does not cover the vast majority of expenses in nursing homes after a specific period. If you have extensive need for support with activities of daily living, you may need to qualify for Medicaid, cover these expenses in private pay or use long term care insurance benefits.

Another downside is that most long term care insurance policies have a built-in 60 to 90 day waiting period. This means you won’t be able to use their payment options right away even if your policy is active. Read the fine print on your own policy to verify this.

One of the biggest benefits of LTI is that if you are healthy, you are more likely to stay in your home and maintain your independence longer. One of the biggest downsides of long-term care insurance is that it can be extremely expensive and your premiums can increase after you buy the policy. There may also be specific deadlines for making your ongoing payments to the long-term care insurance company. Many people are shocked by the extensive cost of long-term care insurance particularly when those premiums can go up annually.

Schedule a time to meet with an experienced elder lawyer if you believe that long term care insurance is not appropriate for your current plan and you wish to discuss options for qualifying for Medicaid.

Most older married couples have their estate plans connected to one another. This calls for an evaluation of all of these estate planning materials when a husband or wife passes away. Many of these documents may be invalid and leave you without an important safety net if the primary person named on them was your now-deceased spouse.

Finding an experienced estate planning attorney who has an understanding of the sensitivities involved in this process is extremely important for navigating your new life. There are a few different kinds of documents that should all be reevaluated after losing your spouse. These include:

• A medical power of attorney, also known as a health care proxy, which determines who can make end of life and medical decisions for you if you become incapacitated
• Existing durable powers of attorney because you most likely named your spouse as the person to have legal authority to handle financial matters if you’re unable to do so
• Last will and testaments, which might include significant language passing on many of your assets to your now deceased spouse
• Medical release forms that only named your spouse
• Beneficiary designation forms that retirement companies and life insurance policies
• Any other estate planning materials

Given that you likely tied together your estate plan with your spouse, it is time to reconsider who you wish to make important decisions for you, take actions for you and who you want to receive your assets if something happens to you. All of these goals can be accomplished with the help of an experienced estate planning lawyer. We can help you navigate this difficult transition.

When someone else creates a power of attorney document and names you as the agent, you need to read through the document in full to understand your role. Not all powers of attorney are created equal, and having a clear understanding before you’re call into action will make the entire process easier.

Most powers of attorney become active in a specific situation: the creator of the document is incapacitated. However, someone can also give you power of attorney immediately, such as an adult with a disability or an elderly loved one who needs help right away with their finances. It’s critical to understand which of these applies in your situation, since it will determine the time and circumstances under which you have authority.

For a power of attorney that only becomes active when the creator is unable to speak for themselves and they are still in good health, this doesn’t give you the power to make decisions or handle transactions on their behalf.

Another reason to carefully read through the power of attorney is that the document might include general or specific powers. This determines the role you’ll play, and in either situation, you want to be sure you’re clear about this role and are comfortable with what it means.

A general power of attorney gives you broad authority to act on behalf of the agent. So long as you have this validly executed POA document, you can use it to carry out business and manage their affairs. Where possible, the creator should walk you through what they hoped you would use it for so you’re clear on the scope. With specific powers, this might allow only a very specific action. For example, your CPA might hold a POA to speak with the IRS about your taxes or you might appoint your realtor POA to sign closing documents for you when you sell a house. This means that the agent has very specific and limited powers.

If you want to create a power of attorney for any reason, contact an experienced New Jersey estate planning lawyer today to learn more about what this process entails. Contact our office now for help!

A transfer on death deed is a powerful tool for real estate planning purposes that allows your chosen beneficiary to receive access to a piece of land or real estate when you pass away without going through probate.

Transfer on death deeds let the property avoid probate but do not necessarily provide additional protections and the use of this deed should not take the place of writing a will. This document is similar to naming a beneficiary of a will because you can choose a charity, a business, a family member or a friend or even a living trust. It’s a good idea to establish a contingent beneficiary as well in the event that the primary beneficiary has passed away. There is no obligation to tell your named beneficiary about the deed, but you still might want to let them know so that there isn’t any confusion or questions when you do pass away. A transfer on death deed is a revocable tool which means that you can revoke it or change it at any point in time before passing away.

You will need to revoke the transfer on death deed in the same manner in which you created it and bear in mind that writing a will doesn’t change the transfer on death deed. The beneficiary is not responsible for the home in any way while you are still alive and therefore does not have legal ownership of the property during this time either. Many people choose a transfer on death deed to help avoid the cumbersome probate process and make it easier for their loved ones to get access to a home sooner rather than later.

A recent study identified that younger people have recognized the value of estate planning largely due to the impacts of the pandemic. If you or someone you know has not yet undertaken estate planning, now is a great time to consult with an experienced and knowledgeable lawyer about the next steps.

This recent study was completed by Caring.com and found that middle and older aged adults are less likely to have a will than they did just one year ago, but those between the ages of 18 and 34 are 63% more likely to have a will in place now.

Many people are thinking beyond the will and considering tools like a health care proxy or a power of attorney that would enable other people to make important decisions on your behalf if something happens to you. The support of an experienced and dedicated estate planning lawyer is instrumental for identifying these extremely important components and it is strongly recommended that you consult with a lawyer sooner rather than later. Your estate plan is not a one and done document.

In fact, it should be revisited multiple times over the course of your lifetime to make adjustments as needed. By forming a relationship with a dedicated lawyer now, you can figure out the next steps to take and the most important strategies and documents you need to put in place now.

The spread of the Omicron variant of Covid-19 is prompting many financial professionals to reach out to their clients to update those clients’ financial plans. It is very important for everyone to identify gaps in their current financial plan and to develop a strategy for the oncoming uncertainty.

It is a great time to think about your goals and life priorities and ensure that you have the documents and financial strategies in place to help you achieve them. Many people have paused creating or updating their plans because there is so much swirling uncertainty as it relates to how the Omicron variant or future strains of the virus will impact the economy.

However, it is very important to keep your plan updated on a regular basis because of this uncertainty so that you don’t leave yourself or your family members in unnecessary difficult situations. Having a conversation with an experienced and dedicated estate planning lawyer is one important step in this process and the beginning of a new year is a great opportunity to reflect back and ensure that your personal goals will be accomplished with the creation or updating of this current plan.

Do not hesitate to reach out to our New Jersey estate planning law office to learn more about how to analyze your existing estate plans and to adapt them for the future. Since no one knows what the future holds, you can ease your concerns about making things simple for your loved ones with the creation of an estate plan aligned with your needs.

If you are looking to transfer wealth through multiple generations you might consider using a tool known as a dynasty trust. This is a strategy to transfer wealth from one generation to another without the assets being negatively impacted by GST, estate or gift taxes.

These tax benefits apply so long as the assets stay in the trust and comply with relevant state laws. Furthermore, a dynasty trust offers other benefits making it a popular choice for those doing their estate planning. Primarily, it can protect assets placed inside the trust from divorcing spouses or creditors.

Other strategies available to accomplish similar goals include the use of an irrevocable life insurance trust which then transfers the assets free of the trust upon death. For these more advanced estate planning strategies you’ll want to partner with an experienced and knowledgeable estate planning lawyer.

The support of an attorney can be instrumental in helping you to accomplish your personal goals and assisting you with all aspects of your overall planning. Schedule a consultation today with an estate planning lawyer to learn a bit more about how this applies to you.      

In discussing and researching options for your own estate planning, you may come across multiple options and strategies that can help you accomplish your goals. This can be further cemented by talking with a knowledgeable estate planning lawyer about your next steps, and you might hear the term charitable trust as part of this planning process.

At its most basic level, a charitable trust holds assets inside and distributes them to charities. How the assets will be managed and invest will depend on what you have specified in the trust. You can also use the terms of the trust to determine how it will make donations. Tax advantages are available to those creating a charitable trust but other forms of trust management may be more appropriate for you based on the individual goals you intend to accomplish.

One of the biggest reasons to use a charitable trust is to establish a long term plan for charitable giving. When you establish a charitable trust for these purposes, you can continue to make gifts over a long period. The trust is completely separate from you when established for charity. Any assets held inside the trust are owned by the trust and the trust requires management and pays taxes just as any other legally recognized entity would. To ensure this is the right fit for your estate planning strategy, schedule a time to speak with a lawyer.

 

The gap between what your current business is worth during the process of completing your estate and succession planning and what it could be worth in the future when you pass away should be considered as part of your overall planning process.

Many people choose to address this financial gap using a tool known as an irrevocable life insurance trust. When an irrevocable life insurance trust is structured correctly the benefits in that insurance policy do not pass through probate and can be available to your beneficiaries immediately. This can provide valuable cash reserves for the payment of estate taxes or other concerns.

You might also wish to retain a source of income for yourself while passing your business assets onto your children, and you might be able to use a tool known as a grantor retained annuity trust to accomplish this.

If assets inside grow during the course of the trust, the appreciation is not subject to estate taxes if you’ve done your planning properly. This can be a very beneficial and powerful tool for passing on a business that is growing rapidly. As with all things related to business succession planning and estate planning it is important to have the support of an experienced lawyer to guide you through the process. Schedule a consultation with a dedicated lawyer today to learn more.

 

An executor or personal representative is responsible for handling many aspects of probate, including the distribution of assets once other administration issues have been managed. However, prematurely passing on these assets to beneficiaries can come with consequences.

It might seem easier or even a good way to make beneficiaries happy by making those distributions right away, this can be illegal and can expose you to personal liability. It’s much better to make a comprehensive list of all the assets and then hold them until probate can be completed.

At the early stages of probate, you don’t know about all the possible legal creditors, either. This means someone could come forward with a legitimate claim once you’ve already liquidated or given an asset to someone else. This does not delete the creditor’s right to recover, which can create a very complex situation.  You don’t want to have to go back to that family member and ask for the item back.

Another reason to wait to make any transfers is that not all assets are probate assets. Some technically do not fall under the guidance of the will, such as retirement accounts or those placed in trusts. If those accidentally get lumped in with probate assets, this could create unnecessary confusion as well as personal liability.

If you’re newly appointed as an executor, even if the deceased person left great instructions for you, you might still want to hire an experienced probate lawyer to assist you with the many tasks required to close out probate. Even if you have a decent handle on all that is involved, it’s helpful to know that you’re on track and to feel confidence about the order in which you accomplish things.

Haven’t yet created your own estate? Contact an estate planning lawyer now to learn more about creating a personal plan.

If you are holding title to a piece of real estate property that you intend to pass on to your loved ones and it’s in a different location, you’ll need to think carefully about how this location could impact your planning options. One of the best ways to approach this strategy overall is to schedule a consultation with an experienced and knowledgeable estate planning lawyer. Your estate planning lawyer can help you consider all of the different aspects of your planning concerns and craft an individualized plan that helps to accomplish your goals.

You want to be careful if you hold title to a vacation home in a different state other than your primary home. If you own tangible property like a piece of real estate and what is known as ancillary estate or a second location, the executors of your will might have to open a second probate proceeding. You might think about placing that property inside an LLC or a trust which could help prevent having to open a second probate. 

There are many different strategies available to you when it comes to making a plan for your estate and for vacation homes but you need to start by considering the opportunities of working directly with an estate planning lawyer who is very knowledgeable about your concerns. The support of an attorney can help you avoid catastrophic mistakes that could make it more difficult for your loved ones to receive this property.

Neel Shah is a practicing estate planning attorney as well as a certified financial planner(r).  He has conducted over 3000 corporate business and real estate transactions throughout his career and is the author planning for business owners (available on Amazon).

Estate planning for business owners is especially important, but also a delicate endeavor. Business owners are often what is labeled as “asset rich, but cash poor.”

This is because of the illiquid nature of a small business, which can create problems when a business owner has passed away or become incapacitated there’s a need for liquidity.

Further, how are shares to be transferred of a business when the business owner passes away? Should they go to a spouse in which case the widow with a widower- may become partners with the small business owner’s business partner? Or should they go to the adult children? What if one adult child is involved in the business and others are not? Or what if there are no adult children and they are all minors? Business succession planning is paramount for these scenarios.

There are unique opportunities for business owners to take advantage of tax saving strategies beyond traditional IRAs. Business owners may decide to incorporate some combination of 401(k)s, solo 401(k)s, defined benefit plans, cash balance plans, and/or other retirement planning which can greatly reduce income tax liability.

One way to create liquidity is to use life insurance. In fact, business owners can and should evaluate life insurance needs on a regular basis-both for liquidity needs for the family, as well as in a succession planning/buy sell agreement type scenario.

If you’d like to discuss your estate planning needs further use the link below to schedule a call!

https://calendly.com/jmotz-3/15-minute-intro-call-1

If this is the first time you’ll be sitting down with your estate planning lawyer, there’s no doubt you’ll have some questions about what you need to think about or bring with you to that initial meeting.

If your lawyer does not already have a questionnaire prepared for you to fill out in advance of this meeting, you can do your own due diligence by documenting a few key things that are likely to come up during the meeting.

Use this checklist to get organized before your very first meeting with your estate planning team so that you will be able to discuss options and planning strategies if you’re ready to go to that step by hiring the attorney:

• Family information such as names, addresses, dates of birth, and any specific details about who would like to receive what in your plan
• Information about any of your retirement assets, such as with company they are with and how much is in those accounts, as well as copies of any beneficiary forms
• Details for any non-retirement assets, such as your bank account locations and any forms you’ve filed with them
• Previous details regarding any documents you’ve created with another lawyer, such as an active power of attorney form
• A list of all the tangible personal property you own that you want to be included in your estate and any initial thoughts over who you want to receive what
• Details about real estate and businesses, if applicable for your situation

In general, you want to give your estate planning lawyer a holistic perspective on what your estate looks like. You don’t need to have all the details organized by the time you meet with them, as you will surely think of other things after the fact, but this will help you get the process started as effectively as possible so that you can see a good perspective on your own estate.

Using a financial power of attorney is one way to ensure that there’s someone else to step in and manage your assets if you become unable to do so, but be aware of not just the state’s rules about creating a power of attorney but your own financial institution’s policies around this.

Financial institutions can use contracts to limit your beneficiary naming and other strategies. The terms of your contract with your financial institution should be reviewed. This can be a beneficiary agreement, in your bank account signature card, or online. It is the document you would have signed when you opened it up. Your bank has the ability to determine how you style your financial accounts and how you name beneficiaries. This means that if you are not aware of a restriction because you didn’t read through the fine print when you opened the account, someone else could end up getting the assets inside those bank accounts. Since you won’t be around to deal with this situation, you want to have the clarity on what can be expected and the common pitfalls associated with it. An example of this can happen when you discuss things with your estate planning attorney and want to make sure that all of your children in equal shares receive your assets. If you fail to name contingent beneficiaries on your bank account form, for example, because this isn’t provided as an option, this can cause conflicts when it comes time to transfer those assets. Make sure that you gather any and all documents, such as account agreements with your banks and use these to schedule a consultation with your estate planning lawyer.

Lately, we’ve seen a meaningful uptick in market volatility fueled by economic instability here and abroad. From Chinese real estate woes threatening to disrupt their economy, to political wrangling in Washington that will continue to ripple through our own, there’s no escaping that the headlines have near-term market impacts around the world. But if the ups and downs have you worrying, don’t forget—you’ve trained for this!

Click here to download

 

 

Common Caregiver Pitfalls

It takes a special type of heart and selflessness to be a caregiver for a loved one but sometimes the best intentions can backfire. Most often it’s going to be the adult child or spouse that will act as the caregiver. But there may be other interested parties in the circumstances, such as siblings or stepchildren, with different motivations-nefarious or not.

One of the pitfalls I see with caregivers is the commingling of assets. It’s common for the caregiver to pay for groceries, or pay out-of-pocket for certain expenses for a loved one with the expectation that it will all balance out in the end. However, when it’s time to reconcile, everyone may not be on the same page and the caregiver may be out of this money.

We often see caregivers give up jobs or careers to care for a loved one. This may be an active decision made by the caregiver because of the belief that the loved one will take care of them. However, when there’s not clear communication to this regard, the caregiver can find themselves in a financially difficult situation if the family member being cared for as had a change of heart, or if other beneficiaries of the potential estate dispute the value of the services, or any renumeration at all.

Sometimes taking on the responsibility as a caregiver may bestow upon the caregiver a heightened standard. Are the investments be managed properly? Is the cash flow being tracked? Are the proper safeguards in place in the event of a fraud/theft? If the caregiver hasn’t put these things in place, will the caregiver face liability? Often the answer is no, but despite not facing potential legal liability there may still be a negative impact on relationships with other family members.

My parents moved to the US in 1973, I was born in 1975. For some reason, whether it was by omission or intentional – I didn’t learn English.

Imagine showing up for your first day of school, in the country in which you were born – having (a) avidly watched Sesame Street daily & (b) being fascinated with being an American cowboy , only to be placed in an ESL (English as a Second Language) class.

To be totally honest, I don’t remember what I felt at the time. I really don’t have distinct memories so I don’t think I was traumatized or set back in life anyway. What did happen was something beautiful. And last week, about 40 years later, I was reminded of it:

I was asked to help educate a group of Senior citizens via Zoom on Financial, Tax and Estate planning updates. All. In. Gujarati.

During the meeting, I got to look into the beautiful faces of 150 Indian-American couples who came to this country and raised the kids of my generation.

It was an honor to have spent the time to help those who have helped so many of my peers. The video is available here (https://youtu.be/xHJH7qcBKtI) in case you, or someone you know would like to see/hear it.

And as for the impact of not learning English until I started school? I guess it wasn’t too bad. Pinky and I did the same thing to our kids after all.

I can’t wait to see how they choose to give back when their time comes. Thank you Mom (Anjana) for this amazing gift!

By: Neel Shah 

Creating an estate plan requires a holistic view of what you intend to accomplish and will require your consideration and thought. It is usually best done with the help of an experienced estate planning lawyer when you start the process.

One of the first things you will do is to create an overview or a list of all of your assets. You might find that an asset inside your estate are your shares of stock and there are a couple of different ways that you can handle this as part of your estate planning strategy. Your lawyer will sit down with you to discuss which of these makes the most sense. One option is to create a trust to hold the shares of stocks. Extra caution must be taken before transferring any title to a trust if the company in question is an S corporation.

The S selection could accidentally be destroyed in this process with invalid planning which could have significant tax consequences for the company. It is vital to get guidance from a knowledgeable attorney before creating any estate plan that has S corporation stock inside of it. There are benefits, however, to using a trust for the purposes of stock estate planning. The biggest is that ownership will transfer efficiently and smoothly after you pass away without requiring the oversight of the probate court. This is why you’ll want to discuss all of the options with your estate planning strategy with the help of an experienced attorney. You will be able to cover all of your bases and have a better perspective on what to expect.

Creating your own will is a common interest for many people who have had this on their to-do list for some time and are concerned about how to best protect their interests and cross this off their checklist.

Creating a DIY will is an alternative to hiring an experienced lawyer but it also comes with its own risks. A lawyer can provide instrumental insight in the process of creating your estate plan, including a will. Furthermore, your lawyer will be familiar with state and federal requirements as well as common reasons for which wills are challenged. A will challenge can slow down the administration of your estate when one or more beneficiaries believes that the will is invalid.

Your lawyer will help you match the document created with your planning intentions to create a plan that’s aligned with your future. This helps you know that if something happens to you, your loved ones are taken care of because of this advanced planning. A lawyer can also introduce you to estate planning strategies you might not have known about, too.

Having the support of a lawyer to create this document in the first place can decrease the chances of a successful will challenge and ensure that you have considered all of the most important aspects of your estate plan. A lawyer can also review your will with you on a regular basis to ensure that it’s in line with your individual goals as well as state and local requirements. You can make things much easier for your loved ones by having a will drafted by a knowledgeable attorney.

 

Tenancy in common is a formal arrangement in which two or more individuals have ownership rights in a property or a piece of land. Each person who owns a portion of tenancy in common could own a different percentage of the total property or an equal percentage. This property type can also be residential. Tenants in common are eligible to bequeath their share of the property to anyone when they pass away.

Tenancy in common is also a distinct concept from joint tenancy. This is especially when it comes to the degree of ownership that each tenant maintains and survivorship rights. You can create a tenancy in common appointment at any point in time and members of the agreement are eligible to borrow against or independently sell their portion of ownership. Tenancy in common and joint tenancy have a few important differences. In a joint tenancy, tenants will get equal shares of a property with the same deed at the same point in time. In tenancy in common, a change in members doesn’t break an agreement. However, with joint tenancy the agreement is broken if any of the members decide to sell their interests.

Additionally, certain states name joint tenancy as default property ownership for married couples, whereas others would use the tenancy in common ownership model. This is why it is so important to set aside time to speak with an experienced lawyer about your unique situation and how you wish to leave property behind.