November, 2018 | Shah & Associates, P.C. Estate Planning & Elder Law Blog
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What Is an I Love You Will?

November 29, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

Since the federal estate tax exemption is at an historically high level of over $11 million, this leads to many questions brought by a client to estate planning attorneys about portability mechanism. These portability mechanisms have to do with a client’s unused exemption at death and many people are choosing to keep their estate planning as simple as possible and elect to leave all of their assets directly to the surviving spouse. NJ-estate-lawyer

Bear in mind that the federal estate tax exemption is portable, however, the exemption associated with the federal generation skipping transfer tax is not.

This means that the GST exemption in situations in which all assets are left behind to a surviving spouse could be wasted. GST planning is often not an issue for most families because of the high exemption levels. However, those with significant wealth could make mistakes related to GST planning. Besides the tax issues associated with this portability exemption, many clients today are not married to the parent of his or her children. Some clients might not care exactly about who will benefit from their assets, but many do have exact provisions and guidelines that they want to enact.

The appropriate method through which to do this is by using a trust to establish some level of control and peace of mind for the client. A trust enables you to determine what happens to these assets and how they can be passed on to future generations while also allowing some conditional provisions that can make things easier for you as well as your loved ones.

Getting some peace of mind with your estate planning begins with scheduling a consultation with an experienced lawyer who is highly knowledgeable about the constantly evolving aspects of the estate planning process and one who will keep you informed as state and federal laws related to estate taxes change in the future so that you are always updated with the right planning.

 

Avoiding Trustee Issues

November 28, 2018

Filed under: Trustees — Tags: , — Neel Shah @ 2:35 pm

An uncooperative trustee named as responsible for your trust management could prove especially problematic for your loved ones but only after the fact when you are no longer around to change this person or to do anything about it. NJ-estate-planner

An uncooperative trustee is someone who is not living up to his or her legal obligation to keep heirs informed about the status of an estate or to distribute the assets in a timely fashion after the estate has been concluded. Beneficiaries are entitled to certain things when named in a trust. For example, a beneficiary is entitled to a copy of a trust.

While the trustee who is responsible for the management of this asset can choose to limit what is ultimately sent to you with regard to only sending you provisions that apply directly to you, you may have rights to pursue legal action if the trustee refuses to send you anything at all. As a beneficiary, it’s a good idea to ask for a copy of this document anyways to review the terms. Many of the problems that result between beneficiaries and allegedly uncooperative trustees stem from misunderstandings and miscommunications.

Either one of these individuals or both might be confused about what is actually included inside the trust. Just because someone told you about the provisions inside doesn’t necessarily mean that you understand the terms and it’s a far better idea to ask for a copy and to review it. If you review the trust and determine that the trustee who has been appointed is not living up to his or her fiduciary duty or legal responsibilities, you do have options to pursue legal action against this person.

The first line of resolution to pursue is to consider contacting the trustee directly and explaining your concerns. While this can be a difficult conversation, many further legal issues can be avoided by requesting this conversation directly with a trustee. You may be able to sort these issues out without having to go to litigation. If you come to the conclusion that this was the result of a misunderstanding, you may be able to avoid taking further legal action, but in the event that you must pursue litigation, schedule a consultation with a knowledgeable probate attorney.

 

Two Trust Tips for Blended Families and Second Marriages

November 26, 2018

Filed under: Blended Families — Neel Shah @ 9:15 am

Contemplating your estate planning considerations after getting married for a second time is especially important because there are critical issues that could easily be overlooked that could leave your children from your first marriage or even your new spouse at a disadvantage. estate-planning-trusts

What follows are two different estate planning tips and considerations for those in second marriages. First of all, spouses can leave their assets separate and have their own revocable trust. You should consult with an experienced estate planning attorney to discuss this option. A trust could be established with the benefit of a surviving spouse after the first spouse passes away. This would enable the surviving spouse to tap into income or even principle.

It’s important to consider giving children a bequest upon the first death, which means that the children will have at least received something if the surviving spouse ends up needing most or all of those funds. The second thing to consider is to choose trustees wisely. The surviving spouse should not be the only person who is listed as a trustee. This means that the trustee has the power to withdraw all of the principle inside the trust which could potentially disinherit children accidentally. The second tip to consider with regards to trust planning for your estate is to create a joint trust which is irrevocable upon the death of the first spouse.

If the spouses wish to sign a joint trust, then the trust must be drafted so that it is irrevocable upon the death of the first spouse. Always consider how you can incorporate children from a previous relationship by giving them a bequest upon the first death. Putting together a trust gives you power, control and some level of flexibility when you have an experienced estate planning lawyer who can help you to draft it and ensure that you have considered all the unique aspects of your individual life. You will have both confidence as well as peace of mind that you have considered all of the most important components of estate planning for your children.

 

Where Have You Stored Your Important Information?

November 21, 2018

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

When your loved ones come home to help you deal with a significant medical crisis or even to help you wrap up your estate after you have passed away, you could put them in a very difficult situation by not having any access to these critical financial documents and other materials. estate-planning-NJ-storage

Not knowing where your important information is located or not communicating this to your loved ones can make things much more difficult when they are already coping with grief or an emergency situation that requires their quick action. The tasks can seem insurmountable when trying to help a parent who has recently lost their spouse, if the spouse who passed away was the one primarily involved in financial management. Many people are now confronting the question of where to even begin with handling the growing piles of mail and paperwork and what to do if there is no filing system available. A master document can be helpful for directing people for where to find answers to many different questions. Some of the most common questions asked by loved ones who show up in an emergency include;

  • Where is the last original will and testament located?
  • Were any military discharge or veterans’’ benefits papers filed?
  • Which bills in the pile are outstanding and require payment?
  • Where was the family money invested?
  • Was there a life insurance policy and which company maintained it?

The task of information preparedness might be approached differently by those adult children who have already had to step in and address these concerns on behalf of their loved ones. This can be an important learning opportunity that provides insight about what to do and what not to do. Going through this situation on your own might cause you to reflect about the best way to protect your own interests and to keep documents stored properly to make it easier for your loved ones if they need to step in quickly.

 

What Can You Learn from Stan Lee’s Estate Planning?

November 20, 2018

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

Stan Lee recently passed away and details show that his tangled estate planning could be a complicated web for heirs to navigate. Unfortunately, far too many celebrity deaths paint a picture of just how devastating it can be when estate planning is not managed appropriately. The co-creator of super heroes, such as Spiderman and Captain America, left behind a huge mess for his prospective heirs despite the fact that he was ill over the last year of his life. 

Stan Lee’s life had unraveled in the last few years before his passing, highlighting the dangers of elder financial abuse. Plenty of scams and unscrupulous people target the elderly, and often, the aging person finds out about it too late. It could even be family members who realize that the assets amassed over a lifetime are now gone thanks to fraud.

Estate planning tools could be used to ward off this possibility, but only when the person takes the time and care to meet with a trusted lawyer.

In other recent events prior to Stan Lee’s passing, he alleged that $850,000 of his money was stolen to purchase a condo. He also alleged that that was part of a greater $1.4 million that went missing from his bank accounts. For most people, estate planning is a relatively straightforward process. It can certainly be emotional, however, to consider your own passing or how to plan for your own incapacitation.

Monitoring and maintaining a plan can become even more complex as an individual ages, especially if that person is also linked to cognitive decline. The creation of documents and the timing surrounding this can have important implications over whether or not the courts view these documents as legally valid. If you want to protect yourself from some of the problems that Stan Lee faced in life, including the possibility of elder abuse, having appropriate powers of attorney can go a long way towards minimizing your concerns.

 

Your Estate Planning Review Year-End

November 19, 2018

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

Has your life changed at all in the last year? Did you have estate plans contingent on prior versions of tax law that are no longer relevant? Don’t let the end of the year pass you by without taking the opportunity to set up a quick meeting with your accountant and your lawyer. These two professionals help you figure out what’s no longer needed and what additional plans need to be incorporated into your big picture to get things done. meet-estate-planning-lawyer-NJ

As the calendar begins to get closer to a new year, it’s a good idea to schedule a consultation with your estate planning attorney. Furthermore, you should sit down and review all of your important documents to make sure that everything is up to date and reflects your individual needs and concerns.

Many people might want to make changes to their health care and advanced financial directives in the future. Common questions that people ask regarding updating or creating your estate plan have to do with planning for a possible nursing home stay and how to leverage tax advantages. Whenever changes have occurred in your family, this can be a source of great celebration or even mourning.

Many people can easily overlook the process of going through your estate planning documents because it can be difficult to confront your own mortality or it can be all too easy to forget the various complexities associated with estate planning and how your plans must be updated and altered as a result of changes in your life, such as the birth of a child or grandchild, separating from a former spouse, deciding to go through a divorce, getting remarried to a new spouse who has a family of their own or incorporating long term wealth and asset protection planning techniques.

The support of a knowledgeable estate planning attorney is instrumental in approaching this process and ensuring that all aspects of the plan have been carefully considered.

 

Communication Is Key with Estate Planning- Don’t Forget It!

November 14, 2018

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

Many families avoid the process of estate planning altogether but even those who take the necessary steps to schedule a consultation with an estate planning attorney can still cause problems for their loved ones in the future due to lack of communication.

It is certainly not easy to confront your own mortality and definitely not any easier to discuss it with your family members. This is particularly true if you don’t intend to pass things on in an equal fashion.

However, an estate planning attorney can help you to avoid many of these difficult challenges and help you to prepare for the communication expectations. Once your children are old enough, you should include them in the planning process because the common mistake of failing to communicate with your children can avoid problems down the road. Once your children have reached a certain age, you can share exactly how much you own, where the assets are located and how you want them dispersed. NJ-estate-planning

There should never be surprises when you pass away, otherwise, this can put your loved ones in the position of dealing with missed planning opportunities.

The support of an experienced estate planning lawyer is instrumental in accomplishing your estate planning goals and giving you the necessary peace of mind to accomplish these with ease. It can be challenging to adapt your estate plan if you don’t have an existing relationship with a trusted lawyer and it can also be hard to figure out how to broach these conversations with your loved ones in a way that does not inflame any further conflict.

Thankfully, lawyers who are familiar with these types of conversations can advise you about the mistakes to avoid and what is truly necessary to share with your loved ones. They can also provide you some insight on various planning tools that can help you to pass on assets if you do not intend to give equal shares of your estate to children. Strategic planning and estate planning tactics used in advance can avoid many problems.

 

Should You Use an Educational Trust?

November 13, 2018

Filed under: Trusts — Neel Shah @ 9:15 am

Often grandparents are the ones asking questions about whether or not to use an educational trust. This raises further questions about whether or not one fund should be set that all of them are eligible to tap into or individual funds for each person. 

Planning for a loved one’s education is an important contribution that you might be interested in making, but the most difficult part of this process is determining what form that bequest will take.

A trust is a great option for passing on benefits for future education. There are many different types of trusts and some of them offer flexibility regarding the conditions and terms that the loved ones need to meet in order to get the benefit of the assets placed inside the trust. If you want to establish one trust fund, this could come in the form of a pool of money that each beneficiary is entitled to request funds from.

This seems like a simple option but should never be created without careful planning because if you intend for all of the beneficiaries to be treated equally, you’ll need to establish clear terms. One beneficiary might attend a more expensive university than another.

Furthermore, if there are wide age differences between the beneficiaries, then the younger beneficiary could discover that the older ones used up the majority of the trust before the younger ones even had a chance to make it to the application stage of college. A separate trust for each of the beneficiaries is another option, but this is not without its downsides.

Individual trusts do make it easier for equal treatment because each beneficiary’s trust would get the same amount of money, but the separate trust might not be enough to meet your goals. Someone who chooses a less expensive education will have excess funds inside their trust, whereas, someone who pursues a more expensive option will run out too quickly.

 

What Major Life Events Should Prompt You to Consider Estate Planning Again?

November 12, 2018

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

It has often been said that far too many people don’t have the necessary estate planning tools prepared and therefore put them and their family members at risk of problems after you have passed away.

Some of these estate planning mistakes can add additional time or could cost you money but it is important to realize that major life events should encourage you to schedule a sit down with your estate planning lawyer. It is all too common to see families with large amounts of wealth attempting to manage their own money.

However, a terminal diagnosis or a career milestone can change things. Major life events such as a divorce, getting remarried, the birth of a child or new grandchildren can all spark the need for professional expertise.

If you have been in do-it-yourself mode for a long period of time, that may no longer be effective as you work to shift towards future goals. You must accommodate for the additional complexity now included in your life and the only way to do this is to schedule a consultation with a knowledgeable estate planning lawyer who is highly familiar with your individual situation. 

An experienced estate planning lawyer can advise you about strategies and tactics that are designed specifically for your individual needs and can ensure that you have peace of mind about what is required in terms of estate planning and how your goals and strategies must shift as your life needs change.

When you work with an estate planning lawyer on a regular basis and revisit your plan as life events emerge, this gives you the potential to avoid problems such as failing to update beneficiary designation forms and can ensure that you have all of your questions answered as they emerge. Minimize the potential for mistakes by scheduling a consultation with an estate planning attorney who cares about you and your family’s future.

 

Avoid The Most Expensive Estate Planning Mistakes

November 8, 2018

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

Not only are estate planning mistakes difficult for your loved ones, as they put your family members in a difficult situation after you have passed on, but they can also be unnecessarily expensive. Taking a leadership role with your own estate planning process is one of the only ways to avoid serious estate planning problems that your loved ones will have to cope with after you have passed away. Even a seemingly simple mistake in your estate planning process could have ripple effects that can last well into the next generation. estate-planning-mistakes

The biggest mistake many people make is not having a plan at all. The state then determines where the assets go and no matter how much your family argues that you wanted things a certain way, your wishes will impact the decision of the associated courts. No plan leaves important decisions up to the courts and a group of people who don’t know you and your individual concerns and wishes.

As your family situation becomes more complex, it’s even more important to sit down to avoid expensive estate planning mistakes. A simple will might have been sufficient for you when you first got married but once you have children, you’ll need to accommodate for additional issues such as guardianship. Another example includes the accumulation of wealth which requires a more comprehensive tax strategy.

More money is available for your family when you have contemplated how to pay less in federal estate taxes and there are also complex issues such as generation-skipping transfer taxes to be aware of. Always take a proactive approach because there are many different types of estate planning mistakes that cannot be undone after the fact. One final expensive estate planning mistake is leaving behind too much money to an irresponsible spender. Having unrestricted access to vast quantities of money may not be the right move for a specific person but a spendthrift provision or trust can help to avoid these challenges. Planning techniques can ensure that wealth you have worked so hard to create lasts into future generations.

Don’t Put It Off Until Later with Estate Planning

November 7, 2018

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

Almost 60% of adults in the United States do not have an estate plan or a basic will and it’s something that many people don’t want to think about. Most common response to putting together an estate plan is, I’ll get to it later, with the assumption that it does not affect you right now. NJ-estate-planning-lawyer

However, it could take weeks, months or even years for estate plan to wind through the complicated probate process, especially if you have not taken any care in your estate planning process altogether.

Since the average funeral cost in the United States is $7000, this can put a sudden and unfortunate financial burden on your loved ones that you never intended to leave behind.

Furthermore, if you don’t have you wishes clearly laid out on paper in your estate plan, this can lead to conflicts within your families. You will need to contact an experienced professional to help you with basic and complicated estate planning.

There are many different assets that could be included in your overall estate and as estate laws are currently changing and tax laws are always shifting, it is important to identify an attorney who is highly knowledgeable about this area of the law.

New concerns emerge in the estate planning realm often, including what to do with digital assets, such as the photos and other memories you have stored online. Failing to include these in your plan can make things even more difficult for your loved ones and can delay the process significantly.

Not having a plan also means that you leave the decisions about what happens to what’s inside your estate up to people who don’t know you at all or might not understand the intentions that you had. If you do not articulate these on paper, your loved ones could be the ones paying the price for this difficult situation. If you are ready to sit down and discuss estate planning options, schedule a consultation today with a knowledgeable attorney.

 

 

Governments Entitled to Significant Portion of Prince’s Estate

November 5, 2018

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

Have you ever wondered the answer to the question, how much will your family really inherit when you pass away? Prince’s failure to conduct estate planning has landed his estate in the news numerous times and it turns out that the federal government is entitled to as much as 40% of Prince’s estate. Furthermore, the state of Minnesota might be entitled to up to 16%.

Would you prefer that your money go to friends, family members and charities instead of estate taxes being paid to the government? Prince’s case is a perfect example of what not to do and how much of your estate the government can claim if you don’t carry out your own planning. NJ-estate-planning

When Prince originally passed away in 2016, his estate was estimated at around $200 million and he had not taken any steps to protect that from the taxes due to the IRS or Minnesota’s Department of Revenue. Legal fees and costs associated with the years-long battle of fighting out who is entitled to recover benefits under that estate will also diminish the overall value.

So, if the beneficiaries of Prince were planning to divide that money between them, they will find that it’s close to reducing by as much as half. Conducting appropriate estate planning can avoid these problems and enable your loved ones to take faster action if you were to pass away suddenly.

Scheduling a consultation with a knowledgeable estate planning attorney is your first step for determining what to do.