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Think of Your Estate Planning as a Lifetime Gift

August 12, 2020

Filed under: Beneficiaries — Laura Pennington @ 1:54 pm

Did you know that you can leave behind a lifetime gift to your loved ones by doing the necessary work for your estate planning? End of life planning is not necessarily easy but it is so important and a great way to give peace of mind to your loved ones. If you don’t create an end of life plan, your state’s laws will determine who gets everything that you owned. lifetime-gift-estate-planning

Furthermore, a physician that you have never met might be responsible for making final decisions on your behalf and your family members could be stuck trying to sort through messy probate.

The good thing is that most of these situations are completely avoidable. Some of the most common ways to ensure that your estate plan minimizes challenges for your loved ones include:

  • Name an executor.
  • Complete a comprehensive inventory of everything you own.
  • Think about relevant health care decisions.
  • Fill out your living will.
  • Name a medical proxy appointed to make decisions on your behalf if you become unable to do so.
  • Sit down with an estate planning attorney.

Even if you don’t have a big estate, there’s still plenty to be gained from the estate planning process. Leaving the gift of careful planning for your loved ones makes things so much easier for them during a difficult time.

Knowing what to do and when to do it can give you a great deal of peace of mind and confidence about the estate planning process. Schedule a consultation with an attorney you trust when you are concerned about crafting an end of life plan in conjunction with any asset protection planning, business succession planning or estate planning.

Understanding Distribution Clauses in Your Estate

August 11, 2020

Filed under: Beneficiaries — Laura Pennington @ 1:35 pm

One of the most commonly misunderstood aspects of your estate planning is considering what you’ll do with your personal property. It is not recommended that you give all of your personal property to one of your beneficiaries and trust that they will be able to distribute it according to your wishes.

One of the most common methods for a person to deal with their personal property inside their estate is to distribute it equally among beneficiaries.

This does give everyone a say in the distribution but is not a perfect plan. You can use something known as a distribution clause to ensure that your wishes are clearly documented. You could, for example, establish a time limit for parties involved to agree as to how personal property should be distributed. This will primarily fall on the personal representative or the person named in your estate planning documents to handle the management of closing out your estate as well as your personal property.

The personal representative, for example, might be instructed through your will’s distribution clause to sell any personal property that is not the subject of an agreement within five months after the date of the person’s death. This can let everyone involved in the distribution clause know that if they are not able to come to reasonable terms of agreement and work it out on their own that the property might be sold to someone else.

This can help to spur along the possibility of collaboration and moving towards resolution. Another way to ensure that a distribution clause is taken seriously is to include a personal property distribution letter. This ensures that the testator can leave a properly executed property distribution letter detailing who gets what so there are limited opportunities for confusion.

Our NJ law firm is here to help you with estate planning needs.

 

Understanding the Power of Appointment in Trusts

August 7, 2020

Filed under: Trustees — Laura Pennington @ 1:50 pm

Many people who approach their estate planning attorney about putting together a trust have a goal of establishing the trust for the beneficiary’s lifetime, while also allowing for discretionary distributions to a beneficiary in the event that the beneficiary might have a reason or need to access those trust funds. Many of these trusts often are created with default provisions designed by the client, which allow for the disposition of remaining trust funds at the beneficiary’s death.

However, the creator of the trust does not have the ability to see into the future, meaning that the default provisions for a trust remainder often become undesirable over the course of time. This is where the use of a tool known as a power of appointment can become meaningful. This is a good way to add flexibility to trusts to account for future situation changes.

This allows the initial beneficiary to adjust default remainder provisions after the creator’s death. Schedule a consultation with a trust planning attorney today to learn more.       

Choosing a trustee is an important process, and it’s not just about who you’d like to serve in that role. It’s also about who wants to serve in that role and their comfort level with taking on that level of responsibility. Since a trustee has a high level of fiduciary duty, too, this needs to be a level of comfort on their end in terms of taking care of all the details. What you don’t want is someone unfamiliar with the process who is not sure about all the details who then becomes overwhelmed in handling all of the tasks of a trustee.

For more support with trustee issues, consider partnering with a trusted estate planning lawyer to draft and fund your trust.

 

Study Shows That Taxes Are a Leading Reason Americans Renounce Their Citizenship

August 4, 2020

Filed under: Taxes — Laura Pennington @ 5:27 pm

Moving to a different state carries its own set of unique estate planning concerns but moving abroad makes them even more complicated. According to 2016 data shared by the US State Department, approximately 9 million Americans actually live in foreign countries.

The Treasury Department found that in the first quarter of 2020, over 2,900 Americans actually renounced their citizenship. A recent study found that 7 out of 10 US citizens who live in another country believe that they should not be required to file US taxes.

More than 4,000 American ex-patriots were included in this recent study and it continues to be a problematic issue for these individuals who have to comply with extra reporting requirements and forms at tax time.

One-fifth of the participants in that same study actually said they were thinking about giving up their citizenship in the near term and 40% of them said that the burden of filing taxes each year was a big reason for doing this. US citizens, as well as resident aliens, are required to file a state, gift and income tax returns and pay any levies owed regardless of where they live.

This means their income around the world still remains subject to taxes. Americans living abroad also must comply with additional tax requirements. This can eb a very complicated situation for someone who does not have a team of professionals to help them.       

New Study Reveals Estate Planning Concerns of Cryptocurrency Owners

August 3, 2020

Filed under: Asset Protection — Laura Pennington @ 5:17 pm

Are you an owner of cryptocurrency? A recent study might reflect some of the feelings that you have about your investment in your funds. According to the company Coin Cover, up to 90% of cryptocurrency investors are concerned about their funds if they pass away but plenty of them have ignored the opportunity to put together an estate planning strategy.

Fewer than 25% of the same study participants indicated that they were involved in a comprehensive plan for their digital asset. Cryptocurrency is not the only type of digital asset that you might have under your name. It is important to take necessary planning steps and precautions in order to protect your interests and ensure that you have considered all aspects of your digital accounts and ownership.

Owning cryptocurrency or any form of digital asset requires you to think about how it fits into your bigger picture and whether or not you have the right estate planning strategies for it. Although things like this might seem like newer forms of assets that can easily be overlooked, they might represent substantial ownership benefits for your heirs if you plan the right way. Since there are so many specifics to this form of currency and other digital assets, make sure you have a yearly meeting set aside with your financial professional and your estate planning attorney to ensure your plans are all up to date.

Schedule a consultation with a trusted estate planning attorney to learn more about how to prepare an estate plan with digital assets such as cryptocurrency in mind.

Should I Transfer My New Jersey Home to My Child Now?

July 29, 2020

Filed under: Estate Planning — Laura Pennington @ 1:30 pm

If you own an entire property in New Jersey or a portion of a property in New Jersey but live outside the state, there are several important things you need to recognize about the process of passing this on to someone else. First of all, New Jersey does not have a state gift tax.

At the federal level in 2020, however, there is an annual federal gift tax exclusion of $15,000, meaning that any gifts extending beyond that amount require you to file a gift tax return for the portion above $15,000. It’s also important to recognize your overall lifetime estate tax exemption which is $11.58 million for individuals in 2020. No gift tax would be incurred as long as you do not intend to make gifts greater than that amount.

Although it seems like with little tax implications there is good reason to make this gift during the course of your life, the purchaser’s cost will carry over to the recipient of a gift, meaning that your child could inherit the property with a cost basis equal to whatever you paid for that share of the property or the property itself. If the property has increased in value significantly since you purchased it, this means that you could be subjecting your child inadvertently to a large capital gain tax.

Some other states, such as Pennsylvania will have a reciprocal income tax agreement with New Jersey but this does not extend to income that goes beyond compensation. For more information about some of the challenges associated with passing on property, schedule a consultation with a trusted New Jersey lawyer today.

Estate Planning for An Adult with a Disability

July 23, 2020

Filed under: Estate Planning — Laura Pennington @ 2:02 pm

Planning for an estate is important for everyone, but especially if you are the caretaker of an adult with disabilities, it’s important to ensure all the documents are lined up to protect this person. The guidance of guardianship estate planning statutes can enable a court-appointed guardian of a disabled adult to put together estate plans for those adults based on a petition to the court. Across the U.S., there are thirty-two states with provisions on the books that enable estate planning to be formally handled by a guardian on behalf of a disabled party.

While these 32 states do have laws on the books about these issues, those statutes usually fall into two general categories. For the first set of states, statutes allow guardians to have broad power over estate planning issues on behalf of a disabled adult.This can include carrying out trusts, codicils, and wills. Only a handful of these states, however, allow the guardian to actually make the will on behalf of the disabled party.

The second grouping of states include those that have either left out of the power to make the will in an implied or expressed manner. This means that the ability to make a will is either not mentioned or has been expressly prohibited as something that a guardian can do on behalf of any adult with a disability.

Estate planning is not always a power that an appointed guardian can do for a disabled adult. This includes creating a will but also incorporates other kinds of estate planning powers.

If you are interested in being appointed as a guardian for an adult in your family who lives with disabilities, it’s important to sit down with a trusted estate planning attorney to discuss your options. Knowing exactly what you can and cannot do when appointed in this role will give you some clarity and allow you to accomplish what is needed on behalf of an adult with a disability. Need more help? Our NJ estate planning law office is here to help you.

 

 

The Financial Outlook for Workers has Changed

July 21, 2020

Filed under: Asset Protection — Laura Pennington @ 12:36 pm

As a result of Covid-19, many people are thinking about estate planning and financial planning in a whole new different way. Having difficult conversations about end of life and long term care plans has become top of mind for many families who might have had to confront these issues directly.

Even if you’ve maintained your health and your family during this crisis, it’s a good opportunity to step back and plan for your own future. Incapacity planning and updating your estate should be some of your biggest priorities.

Having a loved one diagnosed with Covid-19 or having to prepare loved ones for who is responsible for making medical decisions in the event that you become incapacitated has become a common thread for communication throughout many different families. Many people are also exploring new financial opportunities including side jobs as a result of the uncertainty and significantly changing job market brought about by the pandemic.

A recent survey completed with nearly 2,000 Americans found that 41% of respondents saw a reduction in their work hours that impacted their income, nearly 17% were furloughed and just over 28% had lost their jobs.

The study looked at the many ways in which those people have attempted to pivot or respond, including deferring or adjusting essential payments, tapping into savings, taking out a loan or getting a side job. Now is a good opportunity to schedule a consultation with an experienced estate planning attorney to learn more about protecting your interests.

 

Do You Think You Are Not Rich Enough to Consider the Benefits of Estate Planning?

July 20, 2020

Filed under: Beneficiaries — Laura Pennington @ 1:30 pm

The federal exemption for estate taxes in the United States is very generous, to the point that many people assume that they do not have enough assets to be worried about estate planning. In 2020, that threshold is $11.58 million per individual. You might think that estate planning therefore only applies to the extremely wealthy.

However, there are three reasons why thinking this way is problematic and why you might want to reconsider your frame of reference in deciding to move forward. First of all, you could become wealthier, particularly if most of your current wealth is in stocks. The government could also update the rules and limits for estate tax exemptions in coming years, and finally, some states have an inheritance tax.

This is particularly important for you if you currently live in a state that does not have and inheritance tax but are thinking about retiring in a state that does.

Regardless of where you’re at in your life, you need the benefit of estate planning to help you accomplish your goals and protect those you care about. Putting together an incapacity planning plan can help you get the peace of mind that if something happens to you and you become unable to speak for yourself that there’s a plan in place to ensure you get the care and support you need.

Schedule a consultation with a knowledgeable estate planning lawyer to walk through your options and make sure you’ve thought about estate planning the right way. Our office is here to help you review an existing estate plan or to create new documents and strategies.

 

Estate Planning Matters for Your Small Business

July 15, 2020

Filed under: Business Succession Planning — Laura Pennington @ 12:43 pm

Small business owners have plenty of things to think about in the wake of a worldwide pandemic that has shaken many things up. But that doesn’t mean you can afford to neglect the importance of proper estate planning or business planning options. Using this time to take a step back and reorient where you want the company to go in the near future is a good way to keep on top of these important tasks and ensure that if something happens to you, there’s a plan in place.

Every business owner has the long term vision and goal that their company is a big success, but it can take a lot of work to get there and even more work to sustain it after the fact. When you need to make a departure from the company, you need to know that you have a succession plan that will serve your needs and give your business the sustainability it needs.

That comes down to systems, a succession plan, and the right people. All of these elements should be in place well before anything happens involving you or another company owner needing to make an exit. One primary reason to engage in business succession planning beyond these basics is that if you’re in a partnership, you can ensure maximum options for the remaining partner should something happen to the other one.

Buy-sell agreements can help to accomplish this task because it ensures that unless intended, the family members of the deceased party are not the ones who get access to the company value. If there’s no buy-sell agreement in place, the business could be tied up in the estate administration if one of the partners of the company passes away. Most buy-sell arrangements for small businesses will automatically allow other owners to purchase the owner’s share in the company, allowing for a smooth transition to what the business looks like in this new iteration.

Are you stuck on how to make the most out of small business estate planning? Now is a good time to discuss all your options with a dedicated business succession planning attorney in NJ. Set up your meeting today.

Large and In Charge? Giant Firms atop Market Is Nothing New

July 14, 2020

Filed under: Estate Planning — Raymund Rasco @ 4:24 pm

The world is changing, this crisis has cemented the dominance of a handful of very large technology companies (FAANG – Facebook, Amazon, Apple, Netflix, Google). Why shouldn’t investors just focus on them?

Investors may be surprised to learn that it is not unusual for the market to be concentrated in a handful of stocks, but keep in mind that any expectations about the future operational performance of a firm are already reflected in its current price.

Tech standouts are drawing attention for their perceived sway on stocks, but history undercuts that view.

A top-heavy stock market with the largest 10 stocks accounting for over 20% of market capitalization and a marquee technology firm perched at No. 1? This sounds like a description of the current US stock market, dominated by Apple and the other FAANG stocks,1 but it is actually a reference to 1967, when IBM represented a larger portion of the market than Apple at the end of 2019 (5.8% vs. 4.1%).

As we see in Exhibit 1, it is not particularly unusual for the market to be concentrated in a handful of stocks. The combined market capitalization weight of the 10 largest stocks, just over 20% at the end of last year, has been higher in the past.

A breakdown of the largest US stocks by decade in Exhibit 2 shows some companies have stayed on top for a long time. AT&T was among the largest two for six straight decades beginning in 1930. General Motors and General Electric ranked in the top 10 at the start of multiple decades. IBM and Exxon were also mainstays in the second half of the 20th century. Hence, concentration of the stock market in a few large companies such as the FAANG stocks in recent years is not a new normal; it is old normal.

Moreover, while the definition of “high-tech” is constantly evolving, firms dominating the market have often been on the cutting edge of technology. AT&T offered the first mobile telephone service in 1946. General Motors pioneered such innovations as the electric car starter, airbags, and the automatic transmission. General Electric built upon the original Edison light bulb invention, contributing to further breakthroughs in lighting technology, such as the fluorescent bulb, halogen bulb, and the LED. So technological innovation dominating the stock market is not a new normal; it is an old normal too.

Another trend attributed to a new normal is the extraordinary performance of FAANG stocks over the past decade, leading some to wonder if we should expect these stocks to continue such strong performance going forward. Investors should remember that any expectations about the future operational performance of a firm are already reflected in its current price. While positive developments for the company that exceed current expectations may lead to further appreciation of its stock price, those unexpected changes are not predictable.

To this point, charting the performance of stocks following the year they joined the list of the 10 largest firms shows decidedly less stratospheric results. On average, these stocks outperformed the market by an annualized 0.7% in the subsequent three-year period. Over five- and 10-year periods, these stocks underperformed the market on average.

Past performance is no guarantee of future results.

The only constant is change, and the more things change the more they stay the same. This seems an apt description of the dominant stocks atop the market. While the types of businesses most prominent in the market vary through time, the fact that a small subset of companies’ stocks account for an outsized portion of the stock market is not new. And it remains impossible to systematically predict which large companies will outperform the stock market and which will underperform it. This underscores the importance of having a broadly diversified equity portfolio that provides exposure to a vast array of companies and sectors.

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Original article can be found at https://us.dimensional.com/perspectives/large-and-in-charge-giant-firms-atop-the-market-is-nothing-new

When & How do I Find an Elder Care Planning Attorney?

July 13, 2020

Filed under: Estate Planning — Raymund Rasco @ 3:44 pm

Americans are living longer than ever but that doesn’t always mean a longer quality of life. A proper elder care plan should account for not only having the right people in the right roles in order to make the proper financial & health Care decisions, but also guidance and direction with respect to your wishes should you not be able to speak for yourself.

When should one look for an Elder Care Attorney?

There is not an exact time when one should look for an elder care attorney but I see it most commonly when one is considering retirement, most commonly in the late 50s and onward. The need for elder care planning evolves from a properly structured financial plan & estate plan. Another way to regard it is as “Estate Planning with a very specific purpose.” If estate planning is most often is associated with ‘death planning’, then elder care planning is more ‘life & longevity planning.’

How does one choose an Elder Care Attorney?

The ideal way to choose an elder care attorney is by speaking with him or her.  Referrals can be extremely helpful, as are testimonials.  Credentials, such as Certified Elder Law Attorney and other such designations are helpful – but those are often an indication of standardized exams, experience, an ongoing continuing legal education & a commitment to the practice. Not to diminish those very important aspects – but elder Care planning is a personal endeavor.  Traditionally, Estate Planning and Elder Care planning was done with a cookie cutter-like approach. But it’s important that the attorney who guides you on this level of planning emphasize customized solutions and listens to you. Although your pattern and your facts might be similar to others, every family has unique and deserves to be treated as such.

What should one expect when dealing with an Elder Car Law Firm?

When working with an elder care attorney, you should expect to be heard, and to have conversations. Much like going to a physician who needs to have x-rays, MRIs, lab work, etc prior to guiding you on your health needs, an Elder Care attorney is going to need baseline information with respect to your finances, health, family situation, goals and concerns, among other aspects.  Be prepared to be open and forthcoming. You wouldn’t hesitate to tell your doctor if you are taking medications that may have contraindications & adverse effects – treat elder Care attorney with the same manner if you desire proper, effective advice.

Anything else I should know?

It’s important to know that Elder Care attorneys typically handle only the legal aspect of planning. However your elder care plan needs to be integrated with your financial plan, investment plan, tax planlong-term care plan, and insurance plan. Not all attorneys are going to be equipped to handle all of these services in-house. At Shah Total Planning I handle them in-house because my clients prefer that integrated, one-stop shop. But if you can’t find somebody who does it all in the house, it’s important to find someone who is willing to communicate with your team of professionals.

Can you put limitations in a Will?

July 10, 2020

Filed under: Estate Planning — Raymund Rasco @ 3:34 pm

When I’m speaking with a client regarding their Estate Planning, and we are discussing their Will specifically, I encouraged them to think of the Will as a recipe:

If I was going to write a recipe for a cake which required one to get the milk, sugar, eggs, etc. from various places, then blend them in a certain way, then put the mix the oven that’s been preheated, and follow the rest of the instructions – will they get a cake at the end if they follow the recipe properly? Yes.

What if I inserted instructions in the recipe that they must hop on one leg while they are mixing the ingredients? Is that going to be enforced? Will that play into the desired outcome of having a cake? Probably not.   One can regard certain provisions is a Will in a similar manner.

VIDEO: What can frying eggs teach you about Wills, Trusts and Asset Protection?

 

If there are specific steps you are seeking for someone to take when carrying out your wishes or conditions to be met – you’re probably better off looking at a trust (bake the cake now, instead of leaving behind a recipe.) It allows you much more flexibility and control.

Remember a Will is a public record document once somebody passes away. The Will doesn’t have any “power” until it goes through probate. At that point the Will would be submitted to the surrogates court and the executor is given the appropriate documentation to carry out the wishes.

VIDEO: What is the difference between a “Will”, a “Living Will”, and a “Living Trust?”

 

That means having a provision such as “everything goes to my spouse as long as they don’t get remarried” would then be part of the public record. That may not be your intention.

But even beyond that – most courts will generally try to find ways to NOT enforce provisions if they are deemed to be against public policy, such as discouraging marriage.

Also, circumstances may make those restrictions inconsistent with your ultimate wishes. What if you had a provision that said a grandchild will only receive an inheritance upon receiving a degree from a four-year college institution, but then that grandchild is diagnosed with a learning disability or another condition which makes it impossible for that condition to be met? Is that consistent with the grandparents planning objective? Possibly not. But to undo that might require Court approval or even a challenge.

I don’t have an exact percentage as to how many Wills get challenged versus how many Trusts get challenge, but I would wager that it’s at least 5:1 if not 10:1 with Wills being challenged much more often.

That’s not to say you shouldn’t have specific incentive provisions or conditions which are consistent with your wishes in your Wills. However, your attorney should guide you as to whether or not there is a potential challenge looming due to either ambiguity in your desires or a difficulty in enforceability.

Challenges can be costly, but attorneys generally make more money when litigating Will disputes than they do simply administering trusts or properly carrying out the intentions in a Will. Therefore, much care should be taken in ensuring that the will is clear, enforceable, with as little complication as possible to carry out your wishes.

And if you need us, we’re here to help.

Unique Planning Opportunity for Disabled or Chronically Ill Beneficiaries

July 9, 2020

Filed under: Estate Planning — Raymund Rasco @ 3:14 pm

There is great news for clients with certain family members or other beneficiaries – this year brought with it a huge change in the law that benefits beneficiaries who are disabled or chronically ill. The Setting Every Community Up for Retirement Enhancement (SECURE) Act was integrated into the Further Consolidated Appropriations Act of 2020. The SECURE Act has been big new in the special needs planning community, as it carved out special considerations with regard to inheriting retirement accounts for those beneficiaries who are classified as disabled or chronically ill.

Before the change in the law, almost any individual could inherit a retirement account and stretch the distributions from that account over their life expectancy. That would allow the funds to be able to sit in that tax-deferred account and accumulate wealth, with the exception of a required amount that must be distributed each year. However, the SECURE Act drastically decreased which individuals would be eligible to stretch distributions over their life expectancy. Beneficiaries who are now not entitled to a stretch must withdraw the funds within either 5 or 10 years, which doesn’t allow for those funds to keep growing. But under the new rules of the SECURE Act, one category of individuals who are still entitled to the financial benefit of stretching distributions from the account over their life expectancy include beneficiaries of the retirement account who are disabled or chronically ill. So, this is a huge benefit and advantage for those disabled or chronically ill beneficiaries, possibly over other beneficiaries you may have.

In response to the new law changes, a special trust has been created to best provide for these beneficiaries. The purpose of this unique SECURE Supplemental Needs Trust is to provide for the maximum benefit of the law for disabled or chronically ill beneficiaries.

· The trust allows retirement account benefits to receive a maximum stretch under the law. This means that the beneficiary can stretch the distributions from that retirement account over their life expectancy. This allows those funds in the retirement account to keep accumulating and growing.

· The SECURE Supplemental Needs Trust also allows the beneficiary to benefit from the retirement account proceeds while still being eligible for public benefits, such as Medicaid or Supplemental Security Income.

· The trust allows for a care manager or advocate, so that someone can always be looking out for your beneficiary after you have passed.

· The trust provides for asset protection from creditors, divorce, or other bad actors.

· The trust gives you peace of mind knowing that your beneficiary will be taken care of for years to come.

If the following applies to you, then you might benefit from this new law and new SECURE Supplemental Needs Trust:

· You have a loved one or another beneficiary who is disabled or chronically ill.

· You have a retirement account, such as a 401k or IRA.

· You want to make sure that your retirement account receives maximum tax advantages after your death.

The time to plan is now. Regardless of who your beneficiaries are, you need to ensure your estate plan is up-to-date in light of the new SECURE Act. Contact our office to schedule an appointment to see how to best make the new rules work in your favor.

Revisiting Your Estate in the Wake of a Divorce

July 8, 2020

Filed under: Divorce — Laura Pennington @ 12:51 pm

Going through a divorce is difficult and it shakes up your family structure and even your day-to-day life in a big way. There are also so many legal issues that have to be handled to dissolve the marriage and allow you to move on with your own life, such as moving into a new place to live or updating your last name if you had previously taken the last name of your spouse.

 

Some marriages might end quietly, leaving you to think that you have handled all of the most important issues from a legal perspective and are able to move on successfully into your new life. However, you need to think carefully about the importance of planning and updating your estate following the divorce.

Without a spouse through whom you can anchor your estate plan, guardians, executors, trustees and agents under health care proxies and power of attorney must be reconsidered and formally updated in your documentation. These are not the only type of documents that need to be evaluated and carefully handled in the wake of a divorce. This is because separate documentation under beneficiary forms take priority outside of any wishes you make in your estate plan.

For example, beneficiary forms associated with your life insurance policy or retirement plans must be updated to reflect the dissolution of the marriage, otherwise these are legally binding and you most likely have your spouse listed as the recipient of these accounts. Make sure that you review your marriage dissolution documents to determine some of the steps you need to take. Provisions inside these agreements might call for the removal of spouses from one another’s estate planning documents and retirement accounts but it falls to you to make sure that this is carried through.

 

Is Trust Administration Different from Probate?

July 5, 2020

Filed under: Trusts — Laura Pennington @ 6:17 pm

When planning ahead for the future of your estate, trust administration and probate administration are not one and the same. There are some key differences between administering a trust estate and administering an estate inside probate.

The most important difference, for example, is that trust administration is private. For trust administration to begin, a notice letter should be sent to decedent’s beneficiaries and heirs informing them that the trust is being administered. Probate, however, is supervised by the court.

During probate, any of the documents related to the will become subject to public record. This means that details of the estate could be accessed by any member of the public who requests them. Probate will also apply if there is no will and the same rules of public record apply. In terms of trust administration, however, only the trustee and the heirs are able to see the details of the trust.

Another difference between these two processes is that the expenses are different. With probate, you need to submit a court filing fee and any fee associated with publicizing the estate in the newspaper. Any personal representative fees would also be covered under the overall value of the estate’s assets.

For trust administration, the trustee is still entitled to reasonably pay for his or her services, but there are no court filing fees. Unless there is a contest over the trust itself, there’s unlikely to be too many other costs associated with administration or dispute.

Depending on your individual goals, you might need both a trust and a will.

Do you have questions about using both a trust and a will for your estate planning in New Jersey? Our law office is still here working with clients actively and helping them determine their next steps. Schedule a consultation with our law firm today so that you can learn more about what to do next.

What Is a Psychiatric Advanced Directive?

June 29, 2020

Filed under: Advanced Directives — Laura Pennington @ 12:41 pm

Much like a health care power of attorney or a medical advanced directive, a psychiatric advanced directive is a legal document that is completed to provide instructions regarding the services or treatment that a person wants to have or wants to refuse to have during a mental health crisis.

These choices could significantly influence the type of psychiatric care available to the patient but this becomes very important when a mental health crisis emerges and the patient is no longer able to speak up for themselves.

Anyone who is potentially hospitalized for a mental health condition could become too sick to stay in charge of their treatment and make informed decisions about what they do and don’t want. During these times, doctors and other medical professionals will turn to advanced directives to help get inside about specific wishes that the patient made in advance of this particular health crisis. 

This document can be used to spell out your individual wishes about what type of services, assistance, and treatments you want to have access to when you are sick or those that you do not want used for your treatment if you are no longer able to make decisions in your care. 

This directive provides a clear statement about your instructions and your medical treatment preferences and can also be used to grant legal decision-making authority to another person who serves as your health care agent and advocate until the mental health crisis is over. For more information about how to use advanced directives and other tools and documents to help you plan ahead, schedule a consultation with an estate planning attorney today.     

A Post-65 Estate Planning Primer

June 26, 2020

Filed under: Aging In Place — Laura Pennington @ 1:38 pm

Estate planning is not just for the elderly. It’s not even just for those who see retirement on the horizon. Estate planning makes sense for people of all ages, but it does become especially important the closer you get to age 65.

There are several important things you should be thinking about as you approach and pass the age of 65. This has long been heralded as the primary age for retirement although many people are continuing to work past these years and looking to generate additional assets or simply because they enjoy the experience of working. There are legal risks associated with aging that you should take into account prior to reaching age 65 but this milestone is important for thinking about some of the other dangers that you might face as you continue to age. 

Increasing longevity numbers mean that anyone who has already reached age 65 should be thinking about the possibility of living for several decades longer. From concerns about paying for long term care to protecting your assets, planning to avoid guardianship, and qualifying for Medicaid, you might need an elder law attorney to help you identify all of the potential risks and to craft a strategic plan around protecting yourself from these risks and dangers. Schedule a consultation with an attorney who has extensive experience in the realm of elder law planning.     

New Study Holds Promise for Seniors in Long Term Care

June 25, 2020

Filed under: Nursing Homes — Laura Pennington @ 1:34 pm

A recent research study from Simon Fraser University has important implications for one of the most common injuries that happen inside nursing homes: falls. Slip and fall injuries can be catastrophic for the elderly and are some of the most commonly reported injuries that happen in nursing homes across the country.

Falls in fact cause more than 95% of hip fractures in older adults and recovery can be very challenging or impossible. This most recent study was published in the Journal of Bone and Mineral Research and involved researchers looking at more than 2,300 falls experienced by over 600 residents. Only 30 of those total falls led to hip fracture. While that number seems relatively low, the average resident in a long-term care facility falls up to three times per year and the cumulative impact of those injuries can be significant. 

If you are researching nursing homes and long-term care options for an elderly loved one, make sure that you have considered plans for incapacity and the medical care wishes of the resident. Putting these statements into existing estate planning documents can ensure that your loved one has the necessary care he or she needs when they need it most.   

Choosing a nursing home is a difficult prospect, but it’s also one that should prompt you and your loved ones to talk through care options and decide what you really need to do when protecting your loved one. Speaking with an experienced lawyer can help you and your family members get on the same page about next steps. Contact our office today to get support working through these challenges.     

What 0.6% Interest Rates Mean for Your Estate Planning

June 24, 2020

Filed under: Estate Planning — Laura Pennington @ 1:27 pm

 When interest rates adjust, you need to have in the back of your mind that it might be time to sit down and look at your retirement accounts and also your estate plans. As circumstances in the market and broader world are updated and adapt, you need to ensure your plan is in line with being updated, too.

Interest rates have hit historic lows across June and July 2020, meaning that there is some opportunity to discuss with your financial and estate planning professionals how to address this. 

One of the most important things to keep in mind is a grantor retained annuity trust which is an excellent way to ensure that most or all of the income from a property that is quickly appreciating and has high yields can be transferred to a child or another person with minimal impacts from estate or gift tax. 

When the retention period on a GRAT ends, assets inside the trust go to the named beneficiary known as the remainder. Any income or appreciation on the assets in excess of that retained annuity will pass on to your remainder beneficiaries tax free. GRATs can be especially complicated to put together but can accomplish a great deal of your estate planning and overall financial planning goals. 

To sit down and discuss whether or not a GRAT is appropriate for your situation, schedule a consultation with an estate planning attorney who can help you look at the inventory of all of your assets, your current estate planning strategies and tactics and how these can be updated or improved to reflect all of your needs.       

Our office is here to help you when changes in the market call for a change in your estate plan. Set up a time to speak with our estate planning lawyer today.

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