Monroe Township NJ Estate Planning and Elder Law Attorney Blog | Neel Shah - Part 2
Website Home Contact Us Blog Archives Blog Home

Interesting Image
 
 
 

Would you like more information on:

 
 
 
Schedule a Phone Call
to discuss your planning needs!
Click to Schedule an Appointment







Website Home


Topics



Archives


Contact Information

Forsgate Commons
241 Forsgate Drive
Monroe, NJ 08831
PH: (732)521-WILL (9455)
FX: (732)521-1204
Info@LawEsq.net
www.LawEsq.net






Gary Coleman’s Messy Estate Provides Lessons for Others

March 15, 2018

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

The child actor popular on the show, Diff’rent Strokes, passed away in 2010 in Utah. His less than perfect estate plan provides critical lessons for people of all asset levels to consider. Avoiding Estate Planning Mistakes Unfunded Living Trusts

Coleman was only 42 years old when he passed away. Although he had gotten divorced from his wife, Shannon Price, they lived together following their divorce. An advanced medical directive that was honored by the hospital allowed Price to remove life support when Coleman passed away.

Even though the advanced medical directive provided that it was his desire to live as long as possible within generally accepted health care standards, his former wife chose not to honor these desires. The medical directive was signed by Gary Coleman prior to divorcing Price, meaning that Price did not have the authority to make medical decisions unless specified in the divorce decree or another advanced medical directive.

The hospital honored Price’s directions anyways despite the fact that she was not entitled to make such a decision. If you are divorced and do not want an ex-spouse pulling the plug or making other medical decisions on your behalf, you need to update your materials as soon as possible after the divorce is final. Doing so could save your life.

 

Protection Becoming Key in the Estate Planning Process

March 14, 2018

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

Inheritance is set to increase significantly in the coming years and baby boomers will now be passing on record amounts of wealth to their younger relatives. Protection is an important consideration in all of your estate and financial planning and a trust may be the most appropriate tool to help you with it. For The Ladies Special Estate Planning Considerations for Women

One of the most common reasons to include a trust in your estate plan, in addition to your will, is to protect your assets on death from being spent frivolously by children who may inherit these large sums of money without the appropriate maturity or experience to manage them properly. Trust structures are often created in wills similar to what happens in a will, in which assets are passed to chosen trustees to look after young beneficiaries.

The trustee maintains the responsibility to manage the asset and distribute to the beneficiaries when they believe that the beneficiary has personal circumstances and maturity at a high enough level to cope sensibly with a major inheritance. A discretionary trust or a life insurance trust are some of the key tools used in this process.

Don’t Allow Your Estate Plans to Lapse with Life Changes

March 13, 2018

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

You need to ensure that your estate plan incorporates unique considerations about changes in your life. Far too many people create their estate plan once and then promptly forget about it. Updating your documents like your life insurance policies and your wills is a must do if you experience any major changes in your life such as the birth of a child or grandchild, a divorce or even a remarriage. 

Few things are as important as estate planning as far too many families find out after the fact when a loved one who failed to put together the necessary documents or to update them after a major change in circumstances, left behind a mess.

In general, if you are having difficulty approaching the mortality aspect of putting together an estate plan, begin to think about it as who you want to make medical decisions, legal documents that will spell out who gets your assets when you pass away, and who can make financial decisions on your behalf. Ideally, your estate plan helps your loved ones make critical decisions at a time when they need it most. Another common and disruptive life change that can turn everything in your world upside down is the loss of a spouse.

You will need to update your contingent beneficiaries on life insurance and other policies after a first spouse passes away. Doing it yourself can be a big mistake when you are approaching the estate planning process with the end goal of protecting your loved ones in mind.

Protecting Your Assets Must Include a Basic Estate Plan

March 12, 2018

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

Although more people are recognizing the value of a simple estate plan, asset protection planning is also garnering popularity among people who are accumulating significant assets who wish to protect them. A NJ lawyer can help with asset protection planning

It may seem intimidating to put together an asset protection plan as the very name seems to indicate that you may have significant wealth to your name, but the worst thing you can do when it comes to asset protection planning and estate planning is nothing. If you become incapacitated or suddenly pass away without an estate plan, you make things much more complicated for your loved ones.

You could also lengthen the process for them to go through court to deal with your various assets and this could be catastrophic for your taxes as well. Being exposed to risks over the course of your life should prompt you to schedule a consultation with an asset protection planning attorney.

Without the appropriate legal documents and strategies in place, there’s no guarantee that the people that you want to handle your estate or your business will be able to do so. Family members frequently don’t know how a deceased person wants to distribute their assets and what he or she wanted in terms of funeral arrangements.

Asset protection planning goes one step further to consider the benefits of protecting your interests now while you’re still alive from creditors and other predators. Schedule a consultation with an asset protection planning attorney to learn more about how the process of estate planning can assist you with establishing assets well into the future.

What Future Heirs Can Anticipate Doing with A Sudden Cash Windfall

March 8, 2018

Filed under: Inheritance — Laura Pennington @ 9:15 am

Those who want to pass on assets spend a lot of time determining who should get what, but this means that sometimes how that person will handle the money is forgotten entirely. 

A recent study completed by Accenture anticipates that between one and three trillion dollars will be transferred to heirs through 2050. Many of these people may never have inherited a large amount of money before presenting questions about managing these large windfalls.

Many professionals in the financial field recommend taking some time to avoid any action at the outset because this is more of an emotional process than simply winning the lottery.

This is not just a windfall because it is what is being given by someone who is no longer around. Moving too quickly can also lead to poor decisions and spending opportunities, like taking advice that could be regretted down the road or spending later. Plan on how you may deal with stress from relatives and friends about their recommendations regarding how you invest or spend the money.

It is very common for families in the position of a sudden windfall to argue over the outcome and how the money should be spent, so you should have a plan in place for addressing these issues with cooperation and care.

Should You Pay Off Your Home Equity Loan as An Estate Planning Method?

March 7, 2018

Filed under: Home Protection — Laura Pennington @ 9:15 am

Given the new updates in tax laws that have occurred recently, many people are looking into different strategies that could help benefit them and their loved ones in the future. One common recommendation from accounts and other financial professionals is to consider paying off your home equity loan. 

Since you will no longer be able to deduct the interest payment on your home equity loan or line of credit, if you use the money for any purpose other than improving or buying the dwelling, this means that it is costing you more to keep this money directly on your balance sheet. This loan should only be viewed in consideration of the other debts that you currently owe and not the just the tax implications of it overall. Furthermore, paying off your home and fully owning the asset could make things easier in the event that you intend to pass this asset on to your loved ones.

Your beneficiaries may have less hurdles to jump through when the home was fully owned by you at the time that you pass away. You can then consider other estate planning methods for the remainder of your assets. Scheduling a time to speak with someone who has practiced in this field for years is extremely beneficial for a person who is contemplating the estate planning process.

Majority of Adults Expect to Update Their Financial Plans with New Laws

March 6, 2018

Filed under: Estate Taxes — Laura Pennington @ 9:15 am

The previous tax laws were in place for so long that you might have neglected updating your estate plan because you felt there was no need. Now that there are new considerations on the table, however, it may be time to take a second look. 

As a result of a new tax law, a study has shown that six out of ten wealthy adults anticipate updating their financial plans. Now that the gifting an estate exemption is up to approximately $11 million per person, this represents double the old law and entrepreneurs may even be considering grabbing a 20% deduction against qualified business income.

The American Institute of Certified Public Accountants recently completed a study that showed that 63% of wealthy individuals were likely to update their strategies. Those individuals were people who had at least $250,000 in investible assets or more than $200,000 in household income. This could lead to a decade’s long planning process and should always be reviewed by an experienced estate planning attorney. Entrepreneurs who use pass through entities may be able to qualify for a 20% deduction against qualified business income, but this is only applicable to people who have a maximum of $315,000 in taxable income for those married and filing jointly or $157,500 if you are single. In any case, setting aside time to talk with an experienced estate planning lawyer is strongly recommended to give you a better overview of what’s involved and how your individual case can be considered carefully.

Is Not Avoiding Probate a Huge Mistake on Your Part?

March 5, 2018

Filed under: Probate — Laura Pennington @ 9:15 am

When assets pass to others through a will, this means that your estate goes through the probate process. Probate can be very time consuming and expensive for your loved ones and since the details vary from one state to another, it’s important to be clear about the exact procedures that may apply if your estate ends up going through probate. how to avoid probate

Although many states have worked towards more streamlined and less expensive probate procedures, the costs and delays of the old probate process are likely to stay in place. This means that probate can be very disruptive to the management of your assets and add additional frustration for your loved ones.

This is particularly true when you own assets in more than one state, since your estate may have to go through probate in each of those individual states. Avoiding probate is a common goal for people who are putting together their estate plan because probate is a very public process. Anyone can review the probate court records to figure out how much your probate estate was worth, how you divided it and what you owned and owed.

Certain assets automatically avoid probate of law, including annuities, retirement accounts, and jointly owned property but other remaining property should be structured within a trust or other estate planning tool to ensure that it does not become a matter of public record.

Just How Important Is an Advanced Health Care Directive?

March 1, 2018

Filed under: Healthcare Power of Attorney — Laura Pennington @ 9:15 am

All of your estate planning materials should be drafted by an experienced estate planning attorney and reviewed on a regular basis.

Financial planning, estate planning and long-term care planning should always be conducted together to ensure that you’ve taken a long-range view and are able to appoint people to step in quickly to make decisions on your behalf if necessary. Even if you reviewed your estate planning years ago, your advanced health care directive, your will and your trust should be reviewed periodically. Advanced health care directives can be especially important if you were suddenly diagnosed with a serious medical condition such as cancer. use an advanced healthcare directive

A person who has been diagnosed with cancer will find their life completely turned upside down if they have not taken proper planning. Savings can be eliminated quickly, priorities change and jobs can be jeopardized. Furthermore, if you have not named a person to step in and make decisions on your behalf as it relates to your medical care, you could be exposed to a broad range of other problems. Setting up a consultation with an experienced estate planning attorney who is mindful of all of the complicated issues affecting people in modern times can help you.  

Most Common Estate Planning Mistakes Related to Beneficiaries

February 28, 2018

Filed under: Beneficiaries — Laura Pennington @ 9:15 am

Far too many people make mistakes related to their beneficiaries on their bank accounts, retirement accounts or life insurance policies. These mistakes usually end up being a problem after the fact for your loved ones when they are not able to receive the assets and benefits that you intended. 

There are seven common mistakes that can easily be avoided by conducting an annual review of your estate planning documents with an experienced estate planning attorney. Far too many of these mistakes can be easily avoided with a little bit of regular review and more often than not, the planning mistakes relate to situations in which you haven’t updated your materials after a major life change. The biggest mistakes include:

  •   Not naming a beneficiary at all.
  •   Naming your estate as the beneficiary of your retirement plan.
  •   Having outdated beneficiaries.
  •   Naming a special needs loved one as a direct beneficiary.
  •   Naming a minor as a direct beneficiary.
  •   Naming a child as the co-owner of an investment or deposit account.
  •   Naming separate children or just one beneficiary for separate accounts.

These can all lead to catastrophic problems for your loved ones down the line and should be avoided with the help of an experienced lawyer.

What Doctors Need to Know About Estate Planning

February 27, 2018

Filed under: Asset Protection Planning — Laura Pennington @ 9:15 am

Most doctors are hesitant about unnecessary paperwork in their life but because of this, they avoid taking on critical planning responsibilities as it relates to their estate. Estate planning can even seem morbid or excessively time consuming for someone with an already busy schedule. However, you should definitely start to put together your own estate plan if you’re a physician because you already face a heightened risk of lawsuits and a need for asset protection planning. There are several different steps that doctors can take in order to increase their chances of successful estate planning

Estate planning doesn’t have to be complicated and should instead be in line with your direct needs. Some of the most important steps that doctors can take are relatively simple and can be accomplished in an afternoon. These include:

  •   Looking into long term life insurance to provide critical benefits for your family members if something were to happen to you.
  •   Ensuring that your practice has an appropriate business succession plan in place should you become disabled or suddenly pass away, enabling your loved ones to take action and step in if necessary.
  •   Verify your beneficiary designations have been updated on an annual basis in reflection with any life changes.
  •   Ensure that you have at least a basic will in addition to other trusts and tools that can be used to help to protect your loved ones.

What Unexpected Caregivers Need to Know

February 26, 2018

Filed under: Aging In Place — Laura Pennington @ 9:15 am

Some people may not anticipate being a caregiver in the future, but that’s something they need to check in with their parents about. Adult children are not always aware that their parents are planning to use them as a caregiver. A lack of long term care insurance and other assets that could be used to pay for critical health benefits in the future may mean that some parents are planning on their adult children to take care of them. Although parents often have unmet expectations of their children, this rarely comes up until the caregiving issue is in an emergency state. 

Parents who may be left with no one else to help them around the house or to bring them to doctor’s appointment can be a devastating situation for an adult child who is less able to save for their own future as they help pay for their parents’ future care. A study completed by Bay Alarm Medical shows that more than 55% of parents anticipate that their children will be the ones taking care of them, financially or physically, as they get older but most children did not agree with that notion or even know about it. In the Midwest, for example, only approximately one-third of adult children expected that they were responsible for caring for their aging parents.

Although participants in other regions of the United States were much more likely to say that they felt an obligation to take care of their aging parents, the ones most likely to step up for responsibility were the children who were closest with their parents. Many families avoid talking about this or other money related topics because it is an uncomfortable subject. However, it can also be an important one if you anticipate that your children will be the ones taking care of you.

Millennials and Estate Planning Must Mix

February 22, 2018

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Millennials and estate planning sounds like it might not necessarily go together but far too many millennials jump to this conclusion and their family members are left dealing with the aftermath. No matter how much money is generated over the course of a lifetime, it is not real wealth if it is not effectively transferred to future generations. Estate planning is one of the most neglected aspects of wealth building and personal finance today, even among high-income professionals and successful entrepreneurs. 

An increasing number of both of these individuals happen to be millennials. Many people assume that they are neither rich enough nor old enough to make estate planning a top priority. Millennials are managing their money just as effectively as baby boomers and generation X, according to recent studies, may have a lot to lose falling for this myth. Estate planning can be a misnomer because it does seem to imply that it is only for the wealthy, leaving far too many of these millennials to ignore the estate planning process and expose themselves and their family members to problems in the event of an accident.

Sudden incapacity or death of millennial without an estate plan can lead to probate disputes and other problems after the fact. Estate planning is simply a prudent look ahead to protect family members and loved ones in the event that something unexpected happens and is increasingly important for millennials who are garnering more and more wealth in the current economy.

 

Can a Second Trust Created by a Person Revoke the First One?

February 21, 2018

Filed under: Trusts — Laura Pennington @ 9:15 am

If a person already has a trust established with the help of an experienced estate planning attorney, they may be curious about whether a second trust could revoke the terms of the first one. The simple answer to this question is generally no because the creation of a second trust does not immediately revoke a prior trust. 

This is because there is a significant difference between trusts and wills that many people struggle to understand. Although wills contain a provision that a new will revokes all prior wills, trusts typically do not include the same language or apply in the same way. There is an exception to this rule fi the second trust is a complete amendment of or a restatement of the first trust. However, a restatement is not a new trust in and of itself, but rather an amendment to the first trust already created.

It is a complete amendment but still an amendment to the trust already generated. A trust may also contain a provision that revokes the first trust but this would technically classify as revocation in a written form of the first trust and would usually work to revoke the first one. However, many people may need to consult with an experienced estate planning attorney about their intentions to do this and the possible problems that may arise as a result of it.

 

Put Together the Plan Before You Need It with Estate Planning

February 20, 2018

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Have you put off an estate plan because you don’t think you need it? Far too many families wind up dealing with the impact of a loved one’s loss without any planning in place. 

Many people don’t realize the value of estate planning until it’s too late. Most people set up their initial consultations with an estate planning attorney after they’ve had a negative experience with a friend or family member, or perhaps after they have seen a news about a celebrity’s death that prompted numerous estate planning issues.

Estate planning involves so much more than simply ensuring that your stuff ultimately gets passed on to your loved ones.

It might be easy to think of estate planning as simply putting together a will and outlining how your physical possessions will pass on to future generations, but you should consider that a good estate plan takes care of you during the course of your life, as well as your individual family members after you pass away.

Tools like wills, trusts, powers of attorney and more can help to articulate the individual decisions and desires you have if something were to happen to you unexpectedly. The right estate planning attorney is an invaluable asset as you navigate these complex processes and articulate a plan that protects you and your loved ones now and well into the future.

New Tax Law Could Tremendous Windfall for Your Children

February 19, 2018

Filed under: Estate Planning — Laura Pennington @ 9:15 am

The new federal exemption amount has increased as a result of the new tax law, which means that the amount you or your estate can pass on to your heirs free of taxes has increased to approximately $11 million this year from $5.49 million in 2017. 

An existing will that already includes a reference to the federal exemption amount rather than a specific amount for calculating children’s inheritance could mean that more is going to the children and less to your spouse than intended. If you intend to pass on significant wealth to your children and your spouse, you may need to consider reevaluating estate plan based on the wording inside your will. Your spouse could end up with a smaller portion of your estate than you intended due to the new estate tax rules if you have unclear wording in your will. For wealthy individuals who have wills drawn up prior to 2018, there’s a chance that no specific dollar amount is included directly inside the will. This means that it may not be clear how much money goes into a trust for your children.

Rather, the will might refer to the current federal estate tax exemption amount which has changed since you put together the original will. This is why it is worth scheduling a consultation with an experienced estate planning lawyer as soon as possible to give you the clarity you need to restructure your will or include new wording that is clear.

 

Things You Can’t Ignore in the Family-Owned Business Succession Planning Process

February 16, 2018

Filed under: Business Planning — Laura Pennington @ 9:15 am

A company that you started with your spouse decades ago may hold sentimental value for you but it also has significant financial value and possible future value if your children or other heirs intend to take it over. There are multiple different things you need to consider in the process of business succession planning for a family-owned business. 

Often the emotions and conflicts that are present in a family owned business may be more difficult to deal with, highlighting the importance for an experienced business succession planning attorney. First of all, you must consider exit strategies. You must evaluate whether or not your children have the desire and the qualifications to take it over and to outline the appropriate exit strategy for the family from a financial perspective. Transferring a business can generate major tax implications if you don’t do advance planning.

You might lose 30% or more to taxes which could impact the departing business owner’s retirement. Communication with key employees and family members is another crucial component of business succession planning. Discussing the plan helps remove uncertainty about the business’s future and involving advisors to help with the streamlined process can keep everyone informed and confident. Business succession planning should also coordinate with individual estate planning tools. Transferring assets to children is a common concern for people in this situation but this needs to be done carefully and with the guidance of a lawyer who has worked in this field for many years.      

James Brown’s Estate Is Still Unsettled

February 15, 2018

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Eleven years after the death of James Brown, his estate planning has fallen short in the plan to distribute his wealth efficiently. None of the beneficiaries in the will have received even a dime of the money. This includes underprivileged children in South Carolina and Georgia. Mr. Brown intended to donate significant amounts of money to these entities, however, a number of legal disputes have emerged and kept the estate dispute alive for more than 10 years. A dozen separate lawsuits related to the estate were initially filed after Mr. Brown passed away in 2006 on Christmas Day. The most recent of these was filed last month in California. 

Nine of the children and grandchildren of Mr. Brown are suing the widow and the estate administrator, arguing that copyright deals made by the widow were improper and illegal. Another lawsuit alleges that the widow was not actually ever James Brown’s wife. His will initially set aside $2 million to underwrite scholarships for his grandchildren and it gave his household effects and costumes to the six children he did recognize, a bequest that was estimated approximately $2 million.

The will was challenged, however, and an initial settlement was proposed that would give the children and grandchildren a quarter of the estate and the widow another quarter. However, that was overturned by the Supreme Court due to asset distribution that did not appear to be in line with James Brown’s original goals.

Why Do Wills Need to Be Recorded?

February 14, 2018

Filed under: Wills — Laura Pennington @ 9:15 am

 

You may not need to necessarily record a trust although an important component of your trust strategy is to fund it after you have put it together. Far too many people stop after the establishment of a trust and fail to follow through with the funding. There are many different estate planning concepts included in the answer to the question about why a will needs to be recorded or filed. When you leave a will, you leave a clear set of instructions that help to determine how your property is distributed to your heirs after you pass away. estate plan and legacy

Someone must have the authority to transfer this property and this authority is granted by a court after the will is appropriately filed. The process of presenting the official will triggers the beginning of the probate process. A trust, however, is an entity that is generated when a trustee and a settlor enter into a trust agreement. A person who does not control the trust may have more challenges than a person who establishes themselves as a key player in the trust. Although you can’t touch or see a trust as you would a printed will, this is a legally recognizable entity that contains some distribution instructions after you pass away.

However, the court does not have the authority to grant the settlor’s final instructions included in a trust. This is a major departure from a will. Since the trust can survive the settlor and the trustee is granted the authority in such an agreement under state law, no court involvement may be required. Schedule a consultation today with an experienced estate planning attorney to learn more about your options with regard to estate planning.

Five Crucial Ways That Estate Planning Can Help Your Business

February 13, 2018

Filed under: Business Planning — Laura Pennington @ 7:48 pm

 

When most people think of estate planning, they are looking at their individual opportunities available with putting together critical documents and strategies to protect them and their loved ones. The truth is however, that if you play a critical role in any business, you can also benefit from estate planning for the company. Without a proper plan in place, you’ll leave many difficult questions to be answered and problems that may arise if you need to suddenly exit the company or if something happens to you. There are five primary reasons why you need to consider the benefits of estate planning in your business. 

  •   It helps ensure the longevity of your business so that your brand lasts well beyond your lifetime.
  •   It minimizes your taxes since estate taxes can put significant financial problems in front of a business. Transferring business assets to your children is one such example.
  •   It gives you the option of a buy/sell agreement. Estate panning allows you to use a buy/sell agreement that can be beneficial if you have multiple co-owners of a company. This means that they may be eligible to automatically purchase a deceased owner’s interest in the company and this can prevent unintended beneficiaries from accidentally becoming owners or key players in the business.
  •   It allows your business to look forward towards the future. Estate planning allows you to look to the future of your business while you’re still around and maintain your message in years to come. Since no one knows what the future holds, estate planning for the business is important.
  •   It generates a succession plan, if you want to include multiple components in your business succession plan, including strategies to keep the employee, outside directors that may be used to bring objectivity, support training and development of successors and the delegation of responsibility and authority to successors.

Schedule a consultation with an experienced estate planning lawyer to learn more

« Newer PostsOlder Posts »