Benefits of a Simultaneous Death Clause

Most people in New Jersey do not expect to die at the same time as their spouses. Therefore, estate plans may not take the possibility of simultaneous death into account. However, fatal car accidents and other tragedies can result in two family members dying at the same time, and these events may complicate the deceased parties’ estate plans.

The couple or related family members, however, may have their own wishes. Working with an estate planning lawyer in New Jersey helps to cover all bases and ensure that your documents reflect your desires. While it may be impossible to predict the future, the more steps that you can take to protect yourself and your loved ones, the better.


Using a Durable Power of Attorney

There are certain situations in life in which you may want someone else to make decisions on your behalf. Without a legal document, your intentions for who should play this role may be impossible to achieve. Thankfully, however, there are documents you can draft with the help of your estate planning lawyer so that this person is already clearly established legally as your power of attorney. 

You may wish to have a power of attorney that empowers different people to step in to make healthcare decisions for you and financial decisions. It’s also possible that the same individual might play both of these roles for you, such as a spouse. Having these documents put together is important, but it’s also critical that you keep them updated if your life circumstances change. For example, if you get divorced, it’s time to schedule a meeting with your estate planning lawyer to update this information. Without making new versions, the last valid version of these documents (as well as your will) remains in effect. This could empower a former spouse to make healthcare or financial decisions for you.

It’s important to have these documents regardless of your age. Many parents of college-bound students will use these documents to ensure that they are able to step in and help if need be. Others overlook this, but this can present healthcare issues as an 18 year old is legally an adult. Adding “visit the estate planning attorney” to your pre-college checklist is strongly recommended both for a review of your own documents as well as putting together durable powers of attorney for the college student.

Equipping someone with your power of attorney is an important responsibility and it’s a choice that should be made carefully. Make sure that not only are you comfortable with the decision but also that the person you name in this role is comfortable playing that part should the time come.

Some Tips for Bringing Debt into Retirement

Most people approaching retirement age admit they have struggled with thinking ahead not just about life beyond their working years but also about how to make the money they’ve saved last during that time and to plan appropriately for it after they pass away. While a lot of information out there talks specifically about saving or how to maximize what you save, what about debt that you might be bringing into your golden years? Is there a particular way you should handle it? 

Did you know that the typical American couple has approximately $5,000 of retirement savings? However, debts are on the rise: studies show that debts have tripled since 2003 for those in their mid-60s. Many older Americans are picking up additional debt because they are refinancing their homes, adding on two or three decades worth of payments in the process. Others are taking cash out of a reverse mortgage. Sometimes this borrowing is done with the best of intentions, such as helping one of their children with the cost of a divorce, assisting a grandchild with a college education, or trying to enhance income after a job loss. With the downsizing that usually comes as part of this process, it can lead to a higher mortgage on the first house.

Now more than ever older Americans are working longer to try and make ends meet so that they can cover a child’s advanced education. Even those not pursuing further education may be returning home for additional financial support. The refinance process that might seem like a quick fix for cash flow could even double the size of the original mortgage, though.

Reverse mortgages are also picking up traction even with wealthy older individuals. The reverse mortgage seems like a way to enhance current income without having to delve into a retirement portfolio or a current income stream. Reverse mortgages have very specific rules, however, and should not be taken out until you have had the chance to talk over all the pros and cons.

Being aware of all your debts and being mindful of additional support you may need for healthcare needs is critical for anyone bringing debt into retirement. A team of professional advisors, including a financial advisor and your estate planning attorney, may be extremely helpful during this process.



Top Estate Planning Terms You Need to Know

Delving into the process of estate planning might feel overwhelming if you’re not sure what the various terms mean. Read on to get a glossary briefing about some of the most common terms you might hear during this process. 

Guardian: A person who is appointed to care for another individual. Can be for disabled persons, those unable to make decisions for themselves, and minors.

Fiduciary: A person who makes financial decisions for another in the same manner in which they would make financial decisions for themselves.

Testator: The individual who makes a will.

Executor: The person named in a will responsible for managing the estate after the person who has created the will has passed away.

Intestate: This is the situation in which someone passes away without a will.

Joint Tenancy: When two or more people co-own a property.

Will: A basic estate planning document that allows you to name someone to care for your minor children if you pass away as well as your intentions for distributing your property.

Living trust: An entity established by a person or group of persons with the intention of controlling property, removing it from an estate, and determining how the property will be distributed to others. Offers more privacy than a will.

Probate: The legal process through which the court determines how a person’s assets will be distributed.

Revocable living trust: A trust that can be changed or revoked over the course of the grantor’s lifetie.

Irrevocable living trust: A trust in which the terms cannot be altered.

Power of attorney: A document used to enable another individual to make decisions on your behalf, typically relating to healthcare or to financial issues.


A Will Is an Important Estate Planning Document, But It Doesn’t Always Avoid Probate

An estate plan usually begins with a will or a living trust. While a basic will is important for providing your instructions, it does not avoid probate. Any assets that are titled in your name or directed from your will have to go through the probate process before they can be distributed to your beneficiaries. In the event that you own property in several different states your family will probably have multiple probate situations, each one aligned with the laws in that particular state.

The process can vary tremendously from one state to another and it can become very expensive with executor fees, legal fees and court costs. It can also take anywhere from a couple of months to two years or longer. It can also be opened up to the public in certain situations. This is why it’s important to realize that the court system and not your family actually controls the process of your estate plan if you use only a basic will. Not everything that you do own will have to go through the probate process.

Assets that allow you to name a beneficiary such as annuity or life insurance policy will be exempted from this as well as jointly owned property. However, there are many reasons to consider using a revocable living trust as this is a very popular option for many families and professionals. It helps to avoid the probate process at death and can even assist with multiple probates in the event that you own property in numerous states. It can also bring all of your assets together within one plan and give you a better shield of privacy.

Make Use of the Federal Gift Tax to Pass on Assets

While your estate plan should certainly include careful strategies about how you want to pass on your assets after you pass away, it might also be worthwhile to use the annual gift tax allowance to transfer some of your property while you’re still alive. This can help a loved one who needs assistance now and it can help you minimize the size of your estate. Of course, this is a strategy that should be evaluated by your New Jersey estate planning taxes

Since the federal gift tax is based on gifts made within a calendar year, perhaps you’re looking ahead to what you want to gift in 2017. You are able to give up to $14,000 to each person every year without facing taxes. This means that if you have a larger gift, you can pool this with your spouse to give up to $28,000, or you can spread out your gift across several years.

In some ways, this allows you to plan ahead over many years and remove assets from your estate. It can also make sense for spendthrift children, who you may want to receive assets, but only in smaller portions than a lump sum. Depending on your needs and goals and the behavior of your beneficiaries, this might be the most effective way to handle your estate. However, this is just one strategy. This gift tax exclusion is something that will likely make up part of your estate planning but not the whole strategy. Meeting with an estate planning lawyer in Monroe Township can help you identify your short-term and long-term planning goals so that you’re making use of all relevant strategies.

Longevity and Estate Planning for the Wealthy in 2017

As longevity has been increasing and advances in medical technology may only continue that trend, it presents an estate planning challenge for anyone, but particularly wealthy families. The major reason for this is that it can be challenging to determine when and how to pass on assets to beneficiaries so that those individuals can begin managing those assets on their own. 

Now more than ever, long-term care is a concern for people approaching retirement age and beyond. With good health, a person may lived ten or twenty years beyond their retirement age. One long-term care event, however, could threaten assets significantly if recovering from that event requires assisted living or a nursing home.

It’s not just about potential physical or mental ailments, either. While those certainly can present obstacles without proper estate planning techniques, there’s also the fact that someone entering retirement or moving on to the next phase of their life might not want to be responsible for asset management anymore. This presents an opportunity for beneficiaries to take over control of the assets while the grantor is still alive.

At face value, this seems ideal, but there may also be side consequences, too. This is why it’s a good idea to sit down with your New Jersey estate planning attorney to discuss whether it makes sense to pass assets on now and to determine the best vehicle for doing so. Planning now helps to minimize the chances of family disputes and can be better for everyone involved when done properly. Set up a consultation with an estate planning attorney today to learn more about how this can help you and your family.

Half of Prince’s Estate Likely Goes to Uncle Sam Due to Poor Estate Planning

There’s been no shortage of celebrity estate planning blunders in recent years, illustrating that even wealth and celebrity are not protection enough when it comes to planning for the future. So what’s behind the massive estate tax bill? 

The Prince estate is coming up on their deadline to pay the estate taxes for the musical mogul, and it’s believed that up to half of the $200 million estate would be swallowed up immediately with a payment to Uncle Sam. One of the biggest reasons for this preventable tax situation is that Prince left no will and therefore did no planning ahead to shelter any of his assets from the government.

Taking no action can be detrimental for any estate, but the stakes are higher for anyone with substantial assets like Prince. When he passed away, the estate became subject to Minnesota’s 16 percent state tax and a federal tax rate of 40 percent. Adding in deductions and exclusions, the federal government’s cut will likely be closer to 50 percent of the total estate value.


While the size of Prince’s estate certainly makes the issues much more serious in this case, it’s a good example of the value of estate planning for anyone. Taking no action at all can prove catastrophic and add further grief and frustration for your loved ones. There’s a good chance you have plans and ideas for your estate but that you also want to minimize any challenges your loved ones experience, too.

Thankfully, action steps now can make things easier for everyone in the future. Contact an experienced estate planning lawyer in New Jersey to talk further about strategies that you can use to minimize taxes and make the administration of your estate easier on loved ones.

Helping a Loved One Age in Place

One of the biggest concerns for the retiring population and individuals approaching older ages has to do with being able to age in place. More than ever, people are interested in living out their retirement years and beyond in their own home and comfortable surroundings rather than in a nursing home, assisted living facility, or hospital. 

Careful planning can allow for this situation to become a reality, but family members should always be aware of the best way to support a loved one who has the desire to stay in his or her home. This means thinking ahead about how other support structures, such as visiting family members or a paid individual who checks on your loved one every so often, can give peace of mind to everyone involved.

The first step in this process is to recognize that your loved one’s home as it stands now may not support his or her needs. Some modifications may be necessary in order to help your loved one live a more independent life. It may be worth scheduling a meeting with your family member’s doctor in order to better understand his or her needs and how some changes within the house might be both necessary and helpful.

Recognize that an outside individual in the form of companion support or a home health aide may be the extra level of help your loved one needs so that all the tasks of caregiving do not fall on family members, who may be unable to keep up with a consistent schedule or struggle with overwhelm.

Including all relevant family members as well as healthcare providers for your loved one in the plans for aging in place can allow you to see some of the pros and cons of this decision. Proper support and planning ahead can go a long way.

Business Exit Planning: The Sooner, the Better

When it comes to looking years down the road in your business, one of the most important things you can do is to plan early. Starting now allows you to understand all the key issues while also building in time for training and flexibility.

Most business owners do not anticipate their own exit, whether it’s through retirement or other reasons, such as disability or divorce. This can prove problematic for the entire company, not just the owner. This is because the transition of a business should be planned well in advance with careful consideration given to who will take over the major management aspects of the company and other responsibilities.

A business owner usually has the mindset that he or she will be in the chief role for many years to come, but he or she may naturally tire of the responsibility or need to depart suddenly. Without any forethought, this can lead to scrambling to choose the right person. 

Aside from planning ahead for the transition of staff and the right training time for someone to step into bigger roles, there may be tax consequences related to how the business is handled, too. The critical documents for the business, like a buy-sell, may also outline what is and is not allowed. Anyone who could potentially be impacted by a business owner leaving should be thinking about the role of business succession.

It might seem like it’s too early to plan for departure, but it’s far better to accomplish these conversations earlier rather than later. No one expects to suddenly depart their own company, but failing to even consider the option could lead to conflict and confusion if the event does happen.

The right lawyer can help you understand the role played by business succession planning and why it should be incorporated into your business strategy as soon as possible.

What You Should Know About a HIPAA Release and Estate Planning

There are many different documents that you may wish to have in your arsenal when it comes to preparing for your future. One of these, for example, is referred to as a healthcare power of attorney which allows a trusted individual to make decisions on your behalf about your medical treatment if you become unable to do so on your own. Only medical powers are granted in this document rather than financial powers. However, you may want to also consider a HIPAA release. 

This is one of the most important documents to keep a copy of with all of your other estate planning materials. The health insurance portability and accountability act of 1996 outlines that medical records have to be kept confidential. It can also have unintended consequences, however. Without the legal ability to share medical records, it could be challenging for your family to get critical information about your treatment and medical condition if you become incapacitated.

A HIPAA release will allow your medical providers to give this information to your loved ones in the event that something happens to you.  The documents you have set aside for health purposes may be beneficial to your family members if something unexpectedly happens to you. Although these are difficult topics to consider, thinking about them in advance can help you with a broad range of estate planning goals and needs.

Tax Planning Tips for Giving to Charity in Order to Make the Most with Your Gift

If you’re thinking about giving some of your assets to charity and want to use the estate planning process to do so, you are not alone. Many individuals, regardless of their net worth, understand the value of giving back.

Charitable giving benefits go well beyond planning for taxes. This is also a way to support your personal beliefs and values and to ensure your legacy. Although no two individuals are the same and you should certainly consult directly with an estate planning attorney about your options, you need to realize that you do have some flexibility with what to give. Giving a check no matter how big the check is might not actually be the best way to assist you or the charity.

From the perspective of taxes, the type of asset or property you give could have different consequences. You could be limited in the amount of cash you can actually gift to a charity while still getting a tax break. Sometimes people will choose to instead give appreciated public securities. Consulting with a knowledgeable estate planning lawyer in your state is the best way to determine how to translate your unique wishes and desires.

How Long Has It Been Since You Looked at Your Estate Plan?

Beyond never beginning the estate planning process, the second most common mistake that individuals make is thinking that estate planning is something that can be completed only once. Many people believe that if they generated an estate plan 10 or 20 years ago, they are all set for the remainder of their life. However, assets and family relationships are subject to change and that’s to say nothing of shifting estate planning rules.

In the wake of a new president-elect calling for significant changes in the estate tax process and procedures, it’s important to remember that networking with an attorney also gives you an overview of what to expect when regulations or laws are changing down the road. This could significantly compromise any estate planning documents or strategies you have aligned in the past so it’s a good idea to already have a relationship with someone who is familiar with the landscape and can help you adjust as necessary.

There are many different situations in which it’s a good idea to dust off your estate planning and revise it as changes in your life are made. The birth of a new child, a marriage or a divorce are all significant reasons that you should consider consulting with an estate planning attorney.

Has it been some time since you’ve taken a look at your past planning? Now is a good opportunity to ensure that your plans are still in line with your needs

How to Use Business Succession Planning to Help Your Firm and Your Staff Grow and Thrive

Meeting with an experienced business succession planning attorney can help you overcome what’s known as decision inertia. Meeting with a professional who has assisted others with a business succession planning process can minimize the uncertainty that may exist when it comes to thinking about your future. Helping you determine the desire for passing on the business can generate some difficult questions but also some important ones.NJ business succession lawyer

Many small businesses today struggle to create a comprehensive framework for developing their staff and yet this can be critically important in the perspective of business succession planning. Although you might be thinking traditionally about who will take over the business, it is equally important to understand how you will help develop and train the current staff that you have so that they can step into management roles.

Thinking about who will play these key roles down the road can be extremely beneficial for the firm as well as it minimizes confusion and uncertainty in the event that you have to suddenly exit. Remember that business succession planning is not something that comes into play only when you pass away or sell the business.

It could also come into play in a situation in which you are disabled and suddenly need to exit the business. This is why there are so many benefits to conducting your business succession planning now. Many people cannot anticipate accidents or disabilities that will have a significant influence on their personal as well as their professional life. Having a business succession plan that identifies talent now and works to help people grow into roles can be extremely beneficial.

Is Revising an Estate Plan One of Your New Year’s Goals?

Most people fall off the habit train for their resolutions pretty quickly, but you can buck that trend by putting in a call to an estate planning lawyer now. If it’s been some time since you sat down with an attorney to walk through your needs, the new year is a great time to recap the changes in your life and determine whether old strategies are still helping you accomplish your goals.

One of the most common reasons you’d need to update an estate plan is due to changes in your family. This could be in the form of marriage, the birth of a new child or grandchild, or divorce. As those changes occur, you need to make sure that your documents are in line with the updates in your life.

An estate planning lawyer can help you walk through what you need and how well your current plan is performing with your strategies. If updates are needed, or documents need to be created entirely, your lawyer can help point you in the right direction. In order to make sure you get the updates to your estate planning done, contact a lawyer today to make an appointment. Getting it set up now can help you clarify your needs and gives you a better chance of accomplishing the goal. Bring any current documents with you to the meeting. It’s also helpful to have an inventory of any assets and liabilities, too.

Retirement & Estate Planning Hard for Boomers

A new study indicates that not much has changed in the landscape of retirement and estate planning; these are major issues that a lot of boomers are struggling with. While there’s a general recognition that both processes are valuable, a lack of action can put pre-retirees and retirees at risk of major problems.

These outcomes are from Hearts & Wallets, a data firm that seeks to explore how investors make decisions. In their yearly survey, the organization looked at more than 5,000 adults classified as “late-career” (those between 53 and 64) and individuals who plan to retire within the next several years.

While most survey respondents were somewhat confounded by the most appropriate response to retirement planning, estate planning was a tricky subject, too for both retirees and pre-retirees. Estate planning was an area in which individuals were more likely to become overwhelmed. For all the respondents, 26% said that estate planning was very difficult or somewhat difficult. Along with that, however, less than 10% of those same individuals actually reached out to get help with their estate planning.

While the prospect of getting your affairs in order, whether it’s for your own retirement or for estate planning purposes, can seem overwhelming, there are also major benefits to getting it done and forming a relationship with experienced professionals in this area. Finding the right lawyer, for example, can clear up most of your estate planning questions pretty quickly. Don’t let your family be the ones trying to answer difficult questions or navigate the probate process on their own- get these concerns addressed upfront by setting up a meeting with a New Jersey estate planning lawyer.


Top Reasons to Update Your Estate Plan in 2017

Your estate plan should be a living document, and there’s a good chance that it will evolve as you add and remove strategies going forward. As laws change or as the makeup of your family changes, the tactics and documents previously created may no longer apply.

There are several key things that could happen in the New Year that could warrant an updated estate plan:

  • Injury or Illness: Whether it’s a family member getting sick and you need to help them revise their plan or whether you’re concerned about your own health, having a power of attorney is strongly recommended. Your lawyer can help you determine what is most appropriate for your situation.
  • Divorce: Getting a divorce presents numerous changes in your life. Since your former spouse was probably linked to all your prior documents and plans, you need to have a sit-down with your estate planning attorney to walk through updates. Don’t make the mistake of assuming that since these plans were set up once that they are still fine.
  • Marriage: As with any family change, marriage represents a lot of financial and legal differences, too. Ensure that your estate plan is in line with your new spouse and any children. This becomes even more important if you’re getting remarried. 
  • Adoption of or birth of children: The birth or adoption of a child is an opportunity to revisit your estate plan. If you were childless before, there’s a solid chance your estate plan needs an overhaul. Make sure that you put in a call to your estate planning attorney as soon as possible so that you can update these important materials.

If you see change on the horizon in 2017, such as a marriage or the birth of a new child, take the necessary steps to have a conversation about your estate plan before it happens.


Keep Business Assets Separate from Personal Assets

In the process of asset protection planning, there are many different steps you need to take. You need to begin by separating your business assets from your personal assets. In addition, as you develop income diversity it is equally more important to consider business and personal assets as separate. This helps to protect these assets in different situations. For example, if you become the subject of a lawsuit, your creditors could tap into the businesses that you have worked so hard to build. Ensure that your business structures have been developed properly to protect any personal assets.NJ asset protection lawyer

Making use of trusts is one common way that you can engage in successful asset protection planning situations. An attorney who specializes in the process of asset protection can help you identify the right strategies and documents to assist you with this goal. Getting assistance in managing your assets can be extremely important in the protection process. Having tight control over all of your assets at any time means that someone from the outside can successfully argue that you are truly in control of all the assets and that they are yours rather than being placed inside a trust and having the trust maintain the ownership.

It is very important to have a barrier between you and your assets for this purpose. Unfortunately, there are many different risks that could jeopardize the control and future of your assets. Failing to take action until it’s too late could mean losing access to these assets and generating numerous unnecessary problems. Consulting with an experienced asset protection planning attorney could help.


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Shah & Associates, P.C. Estate Planning & Elder Law Blog