Separating Personal Creditors From Business Creditors: Business Asset Protection Tips

As a business owner, you should recognize that it’s essential to separate personal creditors from business creditors. While a personal creditor refers to a debt that you personally are responsible for, a business debt refers to creditors trying to come after your “business entity”. Assets put inside the business entity may be vulnerable to business creditors, but they should be protected from personal creditors. boardroom

Many small business owners make the assumption that assets inside a business entity are safe from liability issues. This is a mistake, and that’s why it’s so important to separate business from personal creditors. Avoid commingling of any funds and stay in line with all business entity formalities to ensure that you have protected yourself as much as possible. Reducing the pool of assets available to creditors is the most important goal of separating your personal from your business debts.

To do this, you need to select the proper business entity from the outset. Many business owners select the LLC or the corporation in order to achieve the superior protection afforded by these kinds of entities as compared with a partnership or sole proprietorship. Limited liability protection for owners is provided under both of these structures, but it’s important that you work with an experienced business asset protection attorney to make sure you’re meeting your goals appropriately. Asset protection planning for the business owner is a long-term process.

Tips for Safely Spending Down Medicaid

It’s not uncommon to discover that you have too many assets when you are first trying to qualify for Medicaid. In fact, as an increasing number of adults are helping aging parents, this is actually one of the biggest challenges in terms of preparing for long term care. In order to meet qualification guidelines, the applicant must have insufficient assets on their own.

First off, make sure you work with an experienced elder law firm so that you are aware what assets should be “spent down” and which ones don’t have to be counted to begin with. Household goods, some prepaid burial and funeral expenses, the home, personal effects, and others may qualify as “non-countable” personal assets and shouldn’t be spent down. An experienced elder law firm can tell you what assets should be spent and which ones should be left alone. sdf

Here are a few tips to help you get the most out of qualifying for Medicaid:

  • Payments related to non-countable assets may allow you to help improve your home, for example, which spending money that could count against you in terms of Medicaid. If your home is exempt, you may be able to make plumbing repairs that would be considered “allowable”.
  • Funeral and burial expenses may be “pre-paid”, thus taking care of an important need ahead of time. Work directly with your estate planning specialist and elder law professionals to determine your state’s limits.

Details are crucial in Medicaid qualification, so you should reach out for help as soon as possible to ensure that you are following guidelines. Contact our offices today at to learn more about Medicaid and other elder law issues.


Estate Planning Parent Fears: Passing On Assets Without Spoiling Children

This is an issue that many of our clients express during their first meetings with us. Parents with wealth are concerned about leaving just enough to their children to allow the children to succeed without leaving too much so that the heirs would become “spoiled”.

When it comes to setting children up for success without making them too spoiled, parents can do a lot to install traits and virtues that promote behavior the opposite of spoiled. These virtues include generosity, thriftiness, patience, curiosity, perspective, and perseverance. How can parents promote this from birth? According to financial columnist Ron Lieber, who developed this list, parents can select balanced vacation options, reduce materialism on a daily basis, provide allowances that are not based on chores, and have clear conversations about money with children from an early age. shutterstock_113853856

It’s not just about selecting the right estate planning tools, but determining what tools will work in combination with the example set forth for children. The first stage of doing this involves putting in the time and the effort to think about this fear of having spoiled children and what can be done to avoid it. The second stage is in developing clear statements about goals and values for the children. Once you have accomplished this, it’s time to put together an action plan that lays out how these goals can be achieved.

Working together with establishing goals and confronting fears, estate planning can be an empowering process that puts parents in the right perspective to think about their legacy.

Contact us today to learn how we can help you


New Jersey: Cheap Gas, Costly Death Taxes

New Jersey residents are quick to point out their cheap gas prices, but the state is also known as being one of the “worst states to die” because of its double-whammy on death: the estate tax and the inheritance tax. Since the state is so expensive in taxing both the estate and the heir, estate planners often work with clients to create specific strategies to protect as much wealth as possible. It also leads some older individuals to consider skipping town altogether in search of warmer climes and lower taxes.  shutterstock_143566018

New Jersey lawmakers are currently contemplating whether a gas tax could help pay for some rail and road projects that the state desperately needs, leading some to question whether it’s time to trade in the higher death taxes in exchange for a gas tax either on wholesale refinery purchases or at the pump.

Chris Christie hasn’t revealed his final plans yet, but he has a major challenge in trying to figure out how to fund the otherwise nearly drained Transportation Trust Fund.

The typical first thought regarding death taxes is that they only influence the wealthy, but that’s simply not true- New Jersey has quite low thresholds that deliver the problem directly to the middle class.  Since the estate tax is levied on bank accounts, retirement accounts, life insurance, real estate, and investments. The state gets the estate taxes on these items if the estate is valued at more than $675,000 and the assets are not left to a spouse.

To learn more about planning strategies for maximizing your estate in New Jersey, contact our office at


New Facebook Feature Allows for “Legacy” Planning

Facebook has become a hotspot for all kinds of users, but one of the challenges presented to the company was how to handle what happens to an account after someone passed away. Without password access, there was no way for loved ones to login and either eliminate the account or figure out another way to deal with it.

Now, users can choose who will manage their account after they pass away. Users can now choose a person who will serve as their legacy contact, giving that person privileges to post on their account after they pass away, update the profile picture and cover photo, and respond to friend requests. Users may also select to have their account deleted after they pass away. facebook-front_179_3177486a

Interested in taking the next step? Look for the options under “security settings”. Users in the U.S. are eligible to do this, but the other person has to be a Facebook user. This highlights the importance of thinking about not just your social media accounts but all of your other “digital assets”. If you have other online accounts, will anyone have access to them after you pass away? Have you stored the passwords somewhere safe? There are many reasons you may wish to have someone manage your Facebook account after you pass away, but you should also think more broadly about what other online accounts could become “locked” or otherwise inaccessible should your loved ones want to get in. To talk through the basics of estate planning in a digital age, contact our offices at


Estate Planning for Intellectual Property, Part Two

If you checked out yesterday’s post and think that you may have a copyright or patent, or that a loved one does, it’s important to protect such an asset with estate planning. There are two complex facets involved in estate planning for intellectual property, and both can be explored with the questions:

  • What is the value?
  • How should it be transferred to someone else?


Valuing intellectual property is not easy, so you should connect with a professional who has specific experience doing this process. Once you’ve arrived at a value, you may be considering transferring the asset to one of several beneficiaries, such as:

  • Family members
  • Charities
  • Colleagues
  • Other individuals

Whether you decide to give the value over lifetime gifts or bequests after your death, you need to be informed about the tax consequences, your own income needs, and what type of person is in the best position to reap the benefits of your IP and monitor your rights closely. If you need access to the intellectual property to support you, for example, you will want to hold onto it until you are ready to retire or until you no longer have a need for that income.

If you have intellectual property, it’s just as important to protect it during your life as it is to plan for who will receive the benefits from it in the future. Start planning early. Set up an appointment today at

Estate Planning for Intellectual Property: Part One

Do you own a copyright, patent, or some other form of intellectual property? These assets might not be tangible, but they certainly can be valuable. In this first post, we’ll discuss the basics behind patents and copyrights. There are four primary categories of intellectual property that may be involved in your estate plan:

  • Trademarks
  • Trade secrets
  • Copyrights
  • Patents

Trademarks and trade secrets are common terms for business owners and entrepreneurs. However, copyrights and patents are also useful and are governed by federal laws geared to promote creative and scientific endeavors by awarding exclusive rights to someone during a particular time period.

The two most common kinds of patents are design and utility patents. A design patent can be awarded for a new, ornamental, and original design for an article of manufacture. Utility patents are given to those who “discover” or “invent” a useful and new process, manufacture, composition of matter, or machine.

Patents protection inventions that are useful, nonobvious, and novel. Current laws protect inventions for 20 years from the patent application filing date for utility patents and 15 years for design patents. Copyrights, however, protect an original expression of ideas, typically found in paintings, sculptures, films, sound recordings, or written work. Copyright protection is more immediate than patents, since the protection begins after the work is in a fixed medium.

Do you already own a copyright or patent or believe that a loved one does? Tune in tomorrow for specific tips on estate planning for these valuable commodities. Reach out to us at shutterstock_135839123

The High Cost of Alzheimer’s

Around the world, there are more than 15 million people caring for someone who suffers from Alzheimer’s. While many of these individuals are aware of the physical and emotional toll this can take on family members and other caregivers, the financial repercussions are also big. canstockphoto20536709

According to a survey by, 25 percent of people providing care to someone with Alzheimer’s spend more than $4,000 monthly on that care. Among these caregivers, 40 percent give more than 30 hours each week in unpaid care services for their lived one. Among those with Alzheimer’s living at home, more than half were being cared for by a caregiver, a family member, or a combination of both. Nearly two-thirds of caregivers say that the afflicted loved one had no financial plans for their care before diagnosis.

Given the high costs of healthcare and long-term care, and the devastating realities of living with Alzheimer’s, it’s important to be aware of any and all planning opportunities. Whether you’re in the midst of a crisis or whether you want to plan ahead for a parent’s future or even your own, you need to be informed about your options. An elder law specialist can help walk you through the basis, whether your loved one needs help right away or whether you are concerned about the long-term future. Don’t hesitate to do your research and learn more today so that you can protect your future. Reach out to us at to start your planning today.

Malcolm Butler Gets MVP Truck… and the Tax Consequences

A Chevrolet truck presented to Tom Brady for recognition as the New England Patriot’s MVP during the Super Bowl will instead pass to his teammate, Malcolm Butler. If Brady had received the truck and decided to pass it on to Butler as a gift, the vehicle valued at $35,000 may have created a taxable income event for Brady. If Brady has already exceeded his lifetime gift giving under the tax code, he, too, would have been in the midst of a taxable event.malcolm butler

Butler will be responsible for paying the income taxes linked to receiving the vehicle instead. The idea was spurred when Brady told a Boston radio station shortly after the Super Bowl that he’d like to give the vehicle to Butler, a rookie player who helped the Patriots earn their big win with his interception of Russell Wilson’s goal-line pass.

It’s important to understand that even with the best of intentions in gift-giving, if you’re not familiar with gift taxes and other tax consequences, you may face an unpleasant surprise. Do your planning in advance by talking about big gift transactions with an experienced attorney so that you are well-informed about your responsibilities and rights. Contact us today at

Whitney Houston’s Estate in Question

The sole heir to Whitney Houston’s estate, Bobbi Kristina Brown, has been in a medically-induced coma since the end of January. The $20 million worth of assets inside the estate is now in question, especially since recent reports indicate her family intends to remove Bobbi from life support. The estate includes all of the royalties linked to Whitney’s image, likeness, and music.

If Bobbi does pass away, the next in line is Cissy Houston and her two sons. Bobbi already inherited $2 million when she turned 20, with another 15 percent to be passed to her at age 25 and the remaining amount to be given to her at age 30.canstockphoto1319725

A lesson learned from this estate is that a revocable living trust can be a valuable tool for shielding private business from public eyes. The fact that so much of this is being reported by the media gives the involved individuals practically no confidentiality or privacy. Using a revocable living trust may have been a better option if they wished to keep Houston’s estate details in the family.

Another option would have been to use dynasty trust to hold the assets inside them forever rather than using the incremental ages release that Houston’s estate employed. If you’re concerned about passing on major assets to children with some control over the process and protecting your privacy, it’s important to engage with an estate planning professional as soon as possible.

What Are the Responsibilities of A Successor Trustee?

When a trustee becomes incapacitated or passes away, a successor trustee takes their place. In addition to managing the duties held by the previous trustee, the successor must also demonstrate proof of a certificate of trust or affidavit regarding their power over the trust. canstockphoto0955949

The successor trustee may carry on a range of responsibilities related to the trust, such as:

  • Keeping records of income received
  • Maintaining records of expenses paid out
  • Opening bank accounts, if necessary
  • Filing fiduciary tax returns
  • Obtaining a tax identification number from the IRS if the successor trustee is taking over after the trustee/grantor of a revocable living trust
  • Locating and protecting trust assets
  • Acting prudently and impartially
  • Creating/providing account reports to beneficiaries, if the trust requires it
  • Ensuring compliance with laws and trust terms
  • Protecting the confidentiality of trust terms

Selecting a successor trustee may increase the chances that a transition between one trustee and another runs more smoothly. Choose someone you feel confident in handling the above-listed responsibilities. Individuals who are aware of the benefits of the trust and who are skilled with organization may be more likely to succeed. Both the original trustee and the successor trustee should be aware of the value of what they provide to trust management and administration.

To structure your trust properly, you should work directly with an estate planning attorney. This promotes compliance with state and federal laws and the opportunity to maximize your trust benefits with attention to detail- contact us today at to review your trust documents.

Why is Succession Planning a “Must” For Business Owners?

In the wake of the last recession and an increase in competition throughout many markets, businesses can do a lot for themselves by planning ahead with regard to succession. In many cases, doing this can help to mitigate the risks associated with an unclear future. canstockphoto0409389

For family-owned businesses, one of the stages of their lifecycle has to do with succession planning and to what extent, if any, children or other family members are interested and included. Recent research reveals that up to nearly one-quarter of all family businesses don’t have a succession plan already in place. Nearly half of senior business owners expressed concern in the same survey about passing on control to the next generation. This dynamic can only generate problems, one of which is known as “sticky baton syndrome”. This refers to situations where an older generation passes on management responsibilities in theory but doesn’t really let them go in practice. This means that the successors don’t get necessary experience to take over confidently when the older generation exits the business entirely. This can interrupt the flow of business or challenge its existence altogether.

Succession planning is a process that should be approached with careful thought. Communicate with a business succession planning specialist today to learn what tactics might work best for your family-owned company. To get more details about your business, reach out to us at

Medicaid Qualification Mistakes: Spending Down Errors

When your loved one is preparing to enter a nursing home, you may do some research on your own or even consult with a financial planner regarding spending down assets. In order to qualify for Medicaid, many older couples in this situation start figuring out the most appropriate way to spend down assets. If you skip over the details, however, you might end up making two of the most common mistakes in spending down, which are spending down exempt assets and continuing to spend down after the qualification point. shutterstock_196493090

Some items are exempted from being counted towards your asset amounts in Medicaid, but if you aren’t clear on the state laws governing this, you might make the mistake of liquidating those that would have been exempted anyways. Pulling funds from an exempted asset may be unnecessary and could jeopardize the couple’s future financially. Don’t spend down without know what’s exempt and non-exempt. Check with a professional to determine which of your assets are protected.

The second big mistake couples make is continuing to spend down their resources past the point of qualification. Don’t rely on information that comes from a source other than your elder law specialist- misinformation can be very misleading and costly. Determining qualification is a complex calculation that factors in shelter costs, assets, incomes, nursing home expenses, and other details. It should only be handled by an expert who can provide the best possible guidance regarding the qualification point. Don’t let the elder law complexities overwhelm you- schedule an appointment with an elder law specialist by contacting Shah & Associates at 732-521-9455.

Obama Suggests Ending “Step Up” For Capital Gains Tax

During the State of the Union address, Obama suggested a proposal to end the “step-up” provision for capital gains taxes. Although this would require the approval of Congress, there are major ramifications for estate planning if this were ever implemented. This kind of proposal would eradicate a big tax benefit linked to inheritances. Structure of taxation

While the current system allows for a step-up in basis for those assets passed on to others, Obama’s suggestion was to tax the capital gains for the decedent instead. In short, this would make it more complicated to protect assets from taxes. Insight from attorneys in the estate planning arena would become even more important for asset protection purposes. Although it’s just a suggestion at this time, the possible red tape and research required for this to work seems overwhelming. Just one illustration of the problems that would unfold has to do with tracing the original cost associated with every piece of property, stock, and valuable.

Bear in mind that if accepted, Obama’s plan does have some benefits in place for married couples. Couples would be eligible to pass on investment assets up to $200,000 without having to worry about capitals gains tax. If the couple wishes to pass on a home to one of their children, up to $500,000 can pass before triggering a capital gains taxable event. Even with these provisions to help, however, the step-up elimination would increase the financial burden felt by heirs.

Proposals regarding and changes to tax laws are complex. If you need help understanding the possible impact for your planning, contact an estate planning expert today at

Robin Williams Estate Shows Importance of Detailed Planning

Susan Schneider, the widow of Robin Williams, is taking the children from Williams’ prior marriage to court, arguing that they have been removing property from the home she shared with him. According to Schneider, memorabilia, jewelry, and other items have been taken from the home. She wants the court to exclude these items even if Williams had wanted the three children to have them. canstockphoto14914124

Williams had put together a trust, the provisions of which outlined that the children should have the memorabilia, entertainment industry awards, and other personal items. According to Schneider, his wife of just a few years, the fact that he intended for her to stay in the family home limits what the children should have access to. She believes that the children may be entitled to personal items that were located at a separate family home. The children and Schneider also disagree about items located in storage.

Even seemingly well-organized estates can lack the proper detail to limit heirs contesting who should get what after a person passes away. One possible option to help clarify provisions of your wishes is to put together a personal property memorandum alongside the estate plan so that you can delineate exactly who receives what property. In the case of estate planning, more details are better than less. To get started on your details today, contact us at

Avoiding a Financial Catastrophe From a Failed Second Marriage

Second marriages can be rewarding and fulfilling, but they can also introduce a whole new spectrum of financial problems if they don’t work out. Thankfully, in combination with pre-nuptial and post-nuptial agreements, estate planning can help to plan ahead just in case. Unfortunately, with second marriages facing a divorce rate of more than 60 percent, those getting married for the second time should definitely consider what to put in place to protect themselves. canstockphoto0200740

The benefit of using estate planning tools in a second marriage is that even if the marriage is successful, it will end at death. In a second marriage, this can make for some tense moments between adult children and the second spouse if estate planning hasn’t factored in these concerns. The new spouse, for example, may want to have stable living arrangements, but children from the first marriage may expect that they’ll be receiving property from their deceased parent.

One such solution to make everyone happy is known as giving the surviving spouse the “right of occupancy” in the house that the couple shared. A will or trust can do this and it gives the second spouse the chance to live in the house for a fixed number of years, until he or she passes away, or until he or she voluntarily departs. This may be important for second marriages because it addresses the short term concerns of the surviving spouse while ultimately giving the property rights to the children from the first marriage. Incorporating this into an estate plan reduces the chances that further litigation will make the situation more complicated. Reach out to us for advice on protecting and planning for the future at

Family Business Owners Positive About Performance, Concerned About Succession Plans

A new study shows that the majority of families with a business don’t have a successor in place and that many parents are not even confident about whether they want the children to take over the company in the future. Failing to set up a conversation to consider these concerns can be devastating for a company. canstockphoto7442230

According to the research, only 27 percent of family-owned businesses had a succession plan in place with regard to senior management positions. What’s most disconcerting about these findings is that two-thirds of the surveyed owners were over the age of 50. Only half of those who completed the survey were thinking about passing the business on to the next generation in their family.

What this indicates is that many people are questioning their next move, but waiting too long to have the conversation with relevant stakeholders. Although people are living longer these days, planning should be done well in advance of possible healthcare issues or a voluntary exit from the business. The conversation involving children and their interest and ability to participate in running the business should happen as soon as possible. Waiting too long leaves the door open for a critical event like a disability or death to raise a lot of questions very quickly.

You don’t have to arrive at a final answer right away, but it’s valuable to think about the future even if you’re not sure whether children will be taking over. Contact an estate planning expert to help you initiate this conversation today. Send us a message to learn more about planning for your family business at

What is Medicaid Pre-Planning?

There are two main approaches to Medicaid planning. The first is known as crisis planning, where an individual is facing the risk of losing all their assets by paying for care in a facility. The second refers to planning ahead of time and this is known as pre-planning.shutterstock_200762813 (1)

If you are healthy enough, one popular option is to select long term care insurance because of the flexibility that it provides. Even if you are not eligible for long term care insurance or find that it’s too expensive at your level of health, there are other options to help you protect your assets. In many cases, this advanced planning can help to save most, if not all, of the senior’s assets.

The good news is that there are multiple planning options available for you, but that they can be tailored to your family. The key is learning what tools are available for your family and talking to an estate planning attorney to determine what’s right for you. Having an experienced elder care attorney on your side can help you protect your assets against a possible long term care crisis.

While crisis planning can also be done, you will have enough on your mind in a crisis situation when facility care is needed. That’s why it’s best for everyone to evaluate their needs in advance and to plan ahead with regard to Medicaid. It’s never too early to start thinking about your health and your needs in the future- set up an appointment to walk through it with us at

The Single Parent’s Estate Planning Tips

Single parents have a lot on their plates, but skipping over estate planning and tax planning is a bad idea. Many people overestimate the amount of time they’ll have to dedicate to the process, but investing some time to meet with a specialist and accomplish your planning is a valuable process.canstockphoto3926808

You play a critical role in the life of your child or children, and while it’s hard to think about what life would look like if something happened to you, you must consider a range of factors like:

  • Who would take care of the children?
  • Do you have plans for your death as well as possible incapacitation?
  • Who would be in charge of managing their food, education, and housing?

Although each situation is unique, there are several estate planning options that tend to align well with the needs of a single parent. These include:

  • A will. Although it’s often the most basic for of estate planning for anyone, it’s critical to name who will be responsible for your estate. You may also use this to nominate a guardian to care for your children.
  • A revocable living trust. Living trusts gives you the power over the assets inside while you are alive but empowers another individual if you become incapacitated or pass away. This is very beneficial because even an older teenager is not likely equipped to manage a big inheritance and a living trust can outline provisions to address these concerns. A side benefit of this approach is that it avoids probate, saving your heirs time and money.
  • Power of attorney and health care directives. You need these regardless of your age or health condition. It’s simply a good idea to name someone who has the ability to make critical decisions on your behalf should something happen to you.

Talk to an estate planning specialist to uncover the estate planning tools you need to accomplish your goals. We’re here to help- send us a consultation request to