What Happens If My Long-Term Care Policy Lapses?

If you were under the impression that Medicare will continue to provide for your long-term care needs, including payments to a nursing home, this could be a catastrophic mistake that follows a missed premium due to your long-term care insurance policy.

Not paying your long-term care insurance policy premiums eventually gives that company license to cancel your policy. This means that after the grace period has expired, you will not be able to use that policy for long-term care expenses. If you have a policy and it lapses, the specifics of how that process is handled falls to your insurance company.

The insurance company, however, could potentially reinstate your policy back to the dated lapse if you request reinstatement and can show that there is no change in health since the time your policy lapsed. In addition, you will need to pay all past due premiums at that point in time. There are usually four primary opportunities to keep your long-term care policy active.

These include paying your premium on time regularly, paying within the policy grace period after a payment has lapsed, responding to a written lapse notice submitted to you by the insurance company, and requesting reinstatement after the policy has lapsed. If your policy has lapsed and you have not been able to get it reinstated, you will not be eligible to tap into the benefits provided by the long-term care insurance company.

Once your policy has lapsed and is no longer eligible for reinstatement, you will have to use another avenue to pay for your long-term care insurance expenses. Remember that Medicare does not cover long-term care insurance payments that go to a nursing home. Schedule a consultation with an experienced elder law attorney to discuss your case in further detail.        

I’ve Avoided Probate, But Have I Missed Anything Else?

Avoiding probate has many different factors that could lead you to search out services and opportunities to avoid this process. However, it’s not the magic answer that addresses every problem that could show up after you pass away. These common misconceptions could make it more difficult for your loved ones in the future.

First of all, we recognize that avoiding probate doesn’t mean avoiding taxes. Those two activities and the management of each are not related at all. If you leave a lot at your death or give away a lot of money during the course of your life, this could trigger certain taxes, even though most people don’t need to think about the federal gift and estate taxes. Your family’s right to inherit is also not impeded by the probate process.

In certain circumstances, family members have a right to claim part of the property that you leave behind at your death. Not all techniques that you think will avoid probate actually. This is why it is important to consult with an attorney to draft a comprehensive plan for accomplishing your goals. Spouse and children rights are two of the most prominent. Finally, avoiding probate does not free you or your estate from the payment of legal obligations to your creditors.

If you don’t leave behind enough assets to pay your taxes and debts, any assets outside of probate could be subject to creditor claims after you pass away.

Creditors do only have a certain period of time to submit formal executor claims. A creditor who has been appropriately notified of the probate court proceeding is not eligible to file a claim after the deadline passes.       

How Does a Payable on Death Bank Account Work?

There are many different ways that you can protect your interests and money and keep it outside of probate. In order to do this, it is your responsibility to consider the benefits of a payable on death bank account.

Do you need a payable on death bank account for estate purposes?

You will need to notify your bank about who you intend to inherit the money inside the account or a certificate of deposit. Your bank will manage this process directly, although there may be paperwork for you to fill out. The beneficiary you name and the bank will manage the rest, enabling the assets inside these accounts to avoid probate altogether.

So long as you are still alive, the individual you name to inherit the money in a payable on death bank account has no formal right to it. If you change your mind about leaving it to the person you named as the beneficiary or if you need the money, you can name a different beneficiary, close the account or spend the money. There are many benefits to a payable on death bank account, including it costs virtually nothing, there’s no limit on how much money can be left in this way, it’s easy to create, and it is relatively easy for the beneficiary to claim the money after the owner of the account dies. As a downside, a payable on death account might not accomplish all of your estate planning goals. You cannot name an alternate beneficiary, for example, which could be accomplished by establishing a trust.         

Splitting Up Assets for Your Children: Considering Special Needs

There are many different circumstances that might prompt you to consider whether leaving an unequal estate plan to your children is recommended. Every family has different dynamics that must come into account when contemplating how to proceed with estate planning.

Special needs planning requires care

If you have a child with special needs, this should prompt you to schedule a consultation with an experienced estate planning lawyer. It can be very difficult to anticipate the type of care that a child with special needs might need in the future, as well as what types of public resources or benefits might be available to them.

You might discuss with your estate planning attorney the opportunity to create a special needs trust in addition to avoiding making other estate planning mistakes that could compromise your child’s eligibility for government benefits. Regardless of how you design the plan, this could also impact the assets left behind for your other loved ones.

It is likely that you will leave a larger portion of your assets to a child who has special needs than his or her siblings. While your child with special needs might also have siblings who love him or her and agree with the plan for long term care, you cannot rely on these siblings alone to take care of a child who has additional needs.

Removing your other children from any other financial burdens associated with that child can give you and your loved ones peace of mind.        

Organize Your Assets Before Tackling Estate Planning

If you’re like most people, you’ve got a long list of things you want to accomplish in 2020. Some of these are ongoing tasks and others involve sitting down and knocking out one big project. If estate planning and writing your will fall somewhere on your list, one of the most important things you can do to create forward moment on that is to organize your assets first.

When your assets are easily laid out so you know what you’re working with, you’re in a better position to speak to your estate planning lawyer about how to use wills, trusts, powers of attorney, and other estate planning documents to protect your interests. It’s too difficult to ensure your plan lines up with your needs if you don’t know what you’re working with when you start.

Since most people won’t trigger the federal estate tax, they tend to underestimate their assets. Pull all of your most recent statements together for your money markets, banks, brokerage accounts, stocks, IRAs, life insurance, bonds, and annuities.

Don’t forget about all those assets that fall outside the umbrella of accounts. What about your firearms? Your personal collection of art? Vehicles titled under your name? Real property including your home and any other properties beyond it? Business interests? Some of these assets require more complex estate planning and you can’t afford to overlook them.

Once you have an idea of the big picture, your estate planning attorney might recommend specific tools or strategies depending on what you want to do with the property. Do you intend to pass it on to someone in your family? Make sure it’s of the highest value when you pass it on to charity?

No matter what your goals are, it all begins with knowing exactly what falls inside your estate. If you need help crafting this list, consider setting up a meeting with an estate planning lawyer today.

“Funding” your Plan: Asset Alignment

You’ve signed your Estate Planning Documents, CONGRATULATIONS!!! BUT…  

  • Signed Documents 
  • Estate Plan Constructed 
  • Pat on Back ✔ 

Why the BUT??? Because there is one more important item left to be checked off on your list: Asset Alignment.

Let’s explore an analogy of purchasing a home. You have furniture but, all your furniture is on your front lawn. Are you finished? No. You have to move your furniture into your home. Well, it’s the same with creating an estate plan and not ‘moving’ your assets into the plan. 

Aligning your assets into your estate plan is an essential step that is often abandoned. Whether it’s changing the title on your account or changing beneficiaries, it’s important to complete the process by aligning the assets and optimizing your plan. Let us guide you in moving your ‘furniture into your home’ and check off Asset Alignment on your list.

How Is the SECURE Act Really Going to Change the Scope of Estate Planning?

The SECURE Act is designed to help address many of the current issues related to retirement in the united states. This could have significant implications for your current estate plans.

From a taxpayer’s perspective, there is both pros and cons associated with the Setting Every Community Up for Retirement Enhancement Act of 2019. More employees are able to save for retirement and many small employers are more easily able to create 401(k) retirement plans under this new law.

However, the one of the biggest downside of the SECURE Act is the elimination of the stretch out IRA, which was enjoyed by death beneficiaries who were not spouses who inherited individual retirement accounts or 401(k) retirement plans. The stretch out tax deferral rules are still applicable for 401(k)s and IRAs that were inherited before 2020. Under the new law, however, the vast majority of death beneficiaries who were not spouses require to get full distribution of the inherited IRA within no more than 10 years after the death of the original account holder.

If you are curious about how this process applies to you and whether this impacts your estate planning, schedule a consultation with a dedicated estate planning lawyer today.      

Does A Young Family Really Need Estate Planning?

The first time that most people approach the subject of creating an estate plan is when they have some sort of a family member that might be relying on them financially. The most common situations for this include a spouse or a new child.

A young married couple with a newborn baby might recognize that they need a will, but they might not understand how a will can be leveraged appropriately with the support of an estate planning attorney to accomplish family related goals.

Younger couples, including those with minor children, should have at least two concerns, including:

  • Who will become the guardian of the children if both parties pass away?
  • How will the children be supported financially after they are gone?

The execution of a will enables parents to name a guardian for their young children if they pass away while the children are still minors. There are many different factors to consider in selecting an appropriate guardian for your minor children. Executing a will also helps to accomplish the second task of allowing the couple to specify how they want property to be distributed after their death.

Most people assume that the will in and of itself is enough to accomplish their estate planning goals, but as many young families can attest, it goes farther than this and might often require other documents and estate planning strategies.

This is where it becomes extremely important for an estate planning attorney to assist in the process of helping this young family adjust to their new and exciting circumstances.

Have You Put Elder Law Planning Off?

It’s very easy to find other things to focus on in today’s modern life. Furthermore, it’s harder to fit elder law estate planning into your overall schedule because it feels too far off into the future, too complicated or even too final.

Regardless of whatever objection you have about the prospect of doing your elder law estate planning, this could lead to unexpected and challenging results that will affect you and your loved ones.

One common pitfall of avoiding elder law planning is that your life savings might end up going towards nursing home costs, if you or your spouse have a sudden need for intensive nursing home care. Another challenge associated with failure to complete your elder law planning is seeing your assets go to people you didn’t intend to have them when you pass away.

It can be a very personal and relatable goal to accomplish your elder law estate planning. In fact, this entire process begins by creating documents that help you to take control of your assets and your lives. These assets must be planned for both in terms of potential disability or death.

This reduces relationship destruction and any pain associated with your loved ones trying to handle the prospect of closing out your final affairs or making difficult decisions if something happens to you. Schedule a consultation with an experienced elder law attorney today to learn more about the options available to you.       

A Tale of Two Decades: Lessons for Long‑Term Investors

The first decade of the 21st century, and the second one that’s drawing to a close, have reinforced for investors some timeless market lessons: Returns can vary sharply from one period to another. Holding a broadly diversified portfolio can help smooth out the swings. And focusing on known drivers of higher expected returns can increase the potential for long‑term success. Having a sound strategy built on those principles—and sticking to it through good times and bad—can be a rewarding investment approach.


Looking at a broad measure of the US stock market, such as the S&P 500, over the past 20 years, you could be forgiven for thinking of Charles Dickens: It was the best of times and the worst of times (see Exhibit 1).

For US large cap stocks, the worst came first. The “lost decade” from January 2000 through December 2009 resulted in disappointing returns for many who were invested in the securities in the S&P 500. An index that had averaged more than 10% annualized returns before 2000 instead delivered less‑than‑average returns from the start of the decade to the end. Annualized returns   for the S&P 500 during that market period were −0.95%.

Yet it was a good decade for investors who diversified their holdings globally beyond US large cap stocks and included other parts of the market with higher expected returns—companies with small market capitalizations or low relative price (value stocks). As Exhibit 2 shows, a range of indices across many other parts of the global market outperformed the S&P 500 during that time span.


The next period of nine‑plus years reveals quite a different story. It has looked more like best of times for the S&P 500, as the index, when viewed by total return, has more than tripled since the start of the decade in the bounce‑back from the global financial crisis. US large cap growth stocks have been some of the brightest stars during this span. Accordingly, from 2010 through the first half of 2019, many parts of the market that performed well during the previous decade haven’t been able to outperform the S&P 500, as Exhibit 3 displays. Since many of these asset classes haven’t kept pace with the S&P, these returns might cause some to question their allocation to the asset classes that drove positive returns during the 2000s.


It’s been stated many times that investors may want to take a long‑term perspective toward investing, and the performance of stock markets since 2000 supports this point of view. Over the past 19½ years (see Exhibit 4), investing outside the US presented investors with opportunities to capture annualized returns that surpassed the S&P 500’s 5.65%, despite periods of underperformance, including the most recent nine‑plus years. Cumulative performance from 2000 through June 2019 also reflects the benefits of having a diversified portfolio that targets areas of the market with higher expected returns, such as small and value stocks. And it underscores the principle that longer time frames increase the likelihood of having a good investment experience.

No one knows what the next 10 months will bring, much less the next 10 years. But maintaining patience and discipline, through the bad times and the good, puts investors in position to increase the likelihood of long‑term success.

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

Key Questions for the Long-Term Investor

Whether you’ve been investing for decades or are just getting started, at some point on your investment journey you’ll likely ask yourself some of the questions below. Trying to answer these questions may be intimidating, but know that you’re not alone. Your financial advisor is here to help. While this is not intended to be an exhaustive list it will hopefully shed light on a few key principles, using data and reasoning, that may help improve investors’ odds of investment success in the long run.                                                                                                                   

  1. What sort of competition do I face as an investor?

The market is an effective information-processing machine. Millions of market participants buy and sell securities every day and the real-time information they bring helps set prices. This means competition is stiff and trying to outguess market prices is difficult for anyone, even professional money managers (see question 2 for more on this). This is good news for investors though. Rather than basing an investment strategy on trying to find securities that are priced “incorrectly,” investors can instead rely on the information in market prices to help build their portfolios (see question 5 for more on this).

2. What are my chances of picking an investment fund that survives and outperforms?

Flip a coin and your odds of getting heads or tails are 50/50. Historically, the odds of selecting an investment fund that was still around 20 years later are about the same. Regarding outperformance, the odds are worse. The market’s pricing power works against fund managers who try to outperform through stock picking or market timing. One needn’t look further than real-world results to see this. Based on research*, only 23% of US equity mutual funds and 8% of fixed income funds have survived and outperformed their benchmarks over the past 20 years.

3. If I choose a fund because of strong past performance, does that mean it will do well in the future?

Some investors select mutual funds based  on  past returns. However, research shows that most funds in the top quartile (25%) of previous five-year returns did not maintain a top-quartile ranking in the following five years. In other words, past performance offers little insight into a fund’s future returns.

4. Do I have to outsmart the market to be a successful investor?

Financial markets have rewarded long-term investors. People expect a positive return on the capital they invest, and historically, the equity and bond markets have provided growth of wealth that has more than offset inflation. Instead of fighting markets, let them work for you.

5. Is there a better way to build a portfolio?

Academic research has identified these equity and fixed income dimensions, which point to differences in expected returns among securities. Instead of attempting to outguess market prices, investors can instead pursue higher expected returns by structuring their portfolio around these dimensions.

6. Is international investing for me?

Diversification helps reduce risks that have no expected return, but diversifying only within your home market may not be enough. Instead, global diversification can broaden your investment opportunity set. By holding a globally diversified portfolio, investors are well positioned to seek returns wherever they occur.

7. Will making frequent changes to my portfolio help me achieve investment success?

It’s tough, if not impossible, to know which market segments will outperform from period to period. Accordingly, it’s better to avoid market timing calls and other unnecessary changes that can be costly. Allowing emotions or opinions about short-term market conditions to impact long-term investment decisions can lead to disappointing results.

8. Can my emotions affect my investment decisions?

Many people struggle to separate their emotions from investing. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions.

9. Should I make changes to my portfolio based on what I’m hearing in the news?

Daily market news and commentary can challenge your investment discipline. Some messages stir anxiety about the future, while others tempt you to chase the latest investment fad. If headlines are unsettling, consider the source and try to maintain a long-term perspective.

10. So, what should I be doing?

Work closely with a financial advisor who can offer expertise and guidance to help you focus on actions that add value. Focusing on what you can control can lead to a better investment experience.

  • Create an investment plan to fit your needs and risk tolerance.
  • Structure a portfolio along the dimensions of expected returns.
  • Diversify globally.
  • Stay disciplined through market dips and swings.

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

What is Probate? Should Probate be Avoided?

What is Probate? How do I avoid probate? Should I even TRY to avoid it?

(If you haven’t checked out the Link to the video in this e-mail-it may be worth watching if for no other reason than you get to see me 20 pounds heavier. It’s the second most-watched video on our channel (12,000 views baby!), And I’m pretty sure only a third of that was me playing it on repeat.🙂) 

In short, probate is the act of going to court to appoint a person (executor) to distribute assets, notify next of kin, and possibly file estate taxes for assets owned by a deceased person.

So now you’re probably thinking: ‘what’s so bad about that?’

Well, as I mentioned, that was just the ‘short’ of it.

The process could get complicated based on the laws of the state you live in and how many ‘hoops’ the executor may have to jump to through to fulfill the last wishes of the deceased. Another concerning factor could be that the probate process is public record, so anyone has access to the information.

So, what’s the other option you ask? The answer is <drumroll>: PLANNING. Not all assets go through probate, probate avoidance is not/should not be everybody’s goal.

To determine whether or not probate could be cumbersome to your situation, and how to ease or avoid the toll on your loved ones charged with fulfilling your last wishes feel free to contact us.

I’m a Successor Trustee: What Does That Mean?

Has someone in your family informed you that you’re a successor trustee? Are you thinking you might never be needed in this role because the primary person serving in it intends to stay there for the long haul?

Wordcloud with Trust related tags

The primary trustee is the person with the first authority to serve in the role of trustee, both managing and distributing assets through the trust. However, if something happens to that person, many trust creators establish a successor trustee to take over that role.

A primary trustee could leave his or her position for many reasons. The person might decide that they are no longer willing or able to serve in this role. They might have had conflicts with the beneficiaries of the trust and want to remove themselves from these issues.

Perhaps the trustee has been accused of some form of malfeasance and has been removed from the position. Regardless of how it happens, you need to verify that you’re able to serve in this role and that you are indeed the successor trustee. There might be specific requirements inside the trust that you have to meet in order to serve in this role.

If it’s the case that the former trustee or settlor is incapacitated rather than deceased, a letter from the settlor’s physician might be required to verify this information.

If you discover that you’re to be installed in this role and need support in carrying out your duties, it’s wise to hire an attorney who has experience in this field. A lawyer can ensure that you understand the scope of your duties so that you can approach this process with confidence.

Although you might never need to formally serve in the role, much like a British royal way down in the line of succession, it’s important to be prepared should you need to step into the position of serving as a successor trustee.

Cheers to 2020!

Happy New Year! It is 2020 and if you’re anything like me, you’ve set some goals for this year.

Maybe your goals involve estate planning. Maybe your goals involve financial planning. Maybe your goals involve just eating healthier. This is not an optical illusion. This drink is actually green and it is made for me with love by my wife, Pinky. It’s spinach, there’s a protein powder and if you really want the recipe, I’m not the right person to ask.

My point is I have goals that I want to accomplish this year and I know what I’m capable of. I know that I’m a powerful strong person. But I also know that I need a little bit of help and there’s nobody who’s a bigger advocate for health that I know than my wife and I’m going to get her help.

To that point, if there’s anything that we can help you with, don’t hesitate to reach out to us. Check out our blog piece on setting your goals for 2020. And as a final note, cheers to 2020. Hope to see you this year!

What You Need to Know About Collecting Inventory of Estate Property

A personal representative appointed to manage an estate or an executor named in the will by the person who passed away has many different responsibilities in closing out estate administration.

One of these includes giving notice to creditors of the estate and taking a formal inventory of the property inside it. Written notice must be sent to all creditors of the estate based upon state laws of New Jersey. This means that any creditor who intends to make a claim against the estate’s assets has to do so no later than 9 months after receiving this notice under current laws.

The 9-month period begins on the date to the debtor’s death. The personal representative or executor cannot distribute assets to beneficiaries until all claims have been satisfied. In the event that a person attempts to distribute assets to beneficiaries before these claims have been satisfied, that individual can be held personally liable to the creditor for that debt.

An inventory of all property owned by the decedent, including real estate, bonds, personal properties, stocks, and business interests must be collected by the executor or personal representative. Other duties that apply to this person beyond the initial inventory includes selling, managing or reinvesting this property.       

How Can I Avoid Probate or Go Through Limited Probate in New Jersey?

When a decedent’s debts are formally paid out and the property that is not otherwise distributed under the law is transferred to heirs and beneficiaries, this is known as probate in New Jersey. However, not every asset belonging to an estate goes through probate.

Some of the most common items in New Jersey that do not require probate include:

  • Assets that the decedent owned with someone else in tenancy by the entirety, meaning that these assets automatically pass to the surviving owner.
  • Assets for which the decedent had a beneficiary outside of a will, such as an IRA, checking or savings account, life insurance proceeds, or 401(k) plans.

Simplified probate procedures might apply if the decedent did not leave behind a will and did not have valuable property above $20,000. This streamlined probate process is much less expensive and is faster than regular probate when it can be used.

The domestic partner or surviving spouse is entitled to the assets below $20,000 without it having to go through probate. The process of understanding if and when probate applies can be discussed by consulting with a New Jersey estate planning lawyer.       

Not sure if you have a small estate to go through the faster procedures? Feel that your estate is more complicated and you’re not sure how many documents and tools you need to streamline the process? A lawyer can help explain the options available to you so that you can make an informed choice about your future.

Steps to Making Probate Faster In New Jersey

The court-supervised process that might be initiated after a person passes away is known as probate in New Jersey. While there are some situations that make it possible to avoid probate, it is likely still required that a family member or an appointed personal representative will need to gather all of the deceased person’s assets, information on taxes, and debts.

The word probate on a stamp on a big folder of paperwork

It becomes the responsibility of this person to transfer these assets first to creditors and taxes, and then to remaining heirs. There are six overall steps that typically apply in a New Jersey probate process. These include:

  • Filing to be the personal representative or the executor under the will which formally opens the estate.
  • Provide notice about the passing of the deceased to relevant beneficiaries and heirs.
  • Sending out notices to creditors of the estate and calculating a full inventory of the property inside the estate.
  • Paying out expenses related to the funeral and estate, along with taxes and debts must occur before beneficiaries to the estate receive anything.
  • Remaining property then is distributed under New Jersey laws of intestacy or under the will.
  • Formal closing of the estate and final filing of tax returns.

All of these procedures might seem overwhelming for someone who is new to the probate process, but scheduling a consultation with an experienced New Jersey estate planning professional can make it that much easier for you to accomplish these goals quickly and easily.       

Is There a Capital Gains Tax on My Collection?

Have you remembered to include a personal collection of items in your estate planning? Whether it’s art, coins, stamps, or something else altogether, you’ll make things much easier for your loved ones and ensure that your collection gift is meaningful.

If your collection has in any way accumulated or appreciated in value and you decide to sell it or and pass it on to someone else in your family who sells it, capitals gains taxes might apply. It should be reported to the IRS if the collection is sold. Capital gains taxes are set at a firm rate and if the IRS gets wind that a sale was not reported appropriately, civil or criminal penalties can be assessed.

When an item or a collection like that is sold and it has appreciated in value, this is the only time that the taxable event applies. If you simply give your stamp collection to your kids and they keep it, that’s not a taxable event.

But the tax burden that applies at the time of a sale is effectively transferred over to the person who receives the collection and opts to sell it. Taxes are due on the amount from which the sold item value differs from the original value.

One important thing to remember is that if you decide to pass on the collection to your kids or some other heirs at the time of your death, a step up in basis applies. The tax basis then becomes the value at the time of the death. It’s likely that this step up in basis could eliminate the taxes due or reduce it sufficiently, but you’d need to speak to your financial advisor about that.

Always engage a financial advisor and a team of other professionals so that you understand each possible implication of your overall estate plan.