Author: Laura Pennington

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.

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.         

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.

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.        

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.

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.      

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.

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.       

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?

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.

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.       

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.

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.

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.       

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.

You might take steps to list everything you can inside your estate, but it’s still possible to leave items out. When you’re working to help administer someone else’s estate or thinking ahead about your own, it could be the case that not every asset is accounted for in a trust or a will.

Some assets won’t ever fit inside those estate plan vehicles anyways. These include life insurance plans, individual retirement accounts, and 401(k) plans. It’s all too easy to forget something like a former spouse still being listed as the beneficiary on a life insurance policy.

In the U.S., we’re seemingly adding new assets to our estate all the time, especially when it comes to digital materials. You’ve got photos, online accounts, and plenty of passwords stored up in your computer. But have you thought about who will have access to those if you pass away?

Most people’s first thought when they acquire something new or start a new online account is not to add it to their estate plan. But sitting down once every six months or at least once a year gives you a clear chance to review everything you have and to determine if you need to update any of your other materials.

A lawyer can be essential in helping you walk through this process so that you can avoid some of the most common pitfalls and ensure that you’ve done as much as possible to make things easier for your loved ones.

When it comes to the fluid process of estate planning, you don’t have to put all the hard work of asset tracking on your own. Be prepared regular updates so that you get the peace of mind that your loved ones will be set up for their own future thanks to your hard work.

The end of the year is the perfect time for reflection. If this year didn’t add up to all you’d hoped it would be and you want to start off on a better foot in the New Year, there are at least four goals you can’t afford to miss on your list.

Start by looking at your biggest debt, which is probably your home. Even if you know that it’s not feasible for pay off that mortgage totally in 2020, having a future date in mind when you do think that goal is achievable gives you something clear to work towards. If you’re nearing retirement age, factor in how this might influence your retirement spending, too. Can you target a payoff date early on in your retirement?

The next phase should be setting up a six month emergency fund. This is money you can tap into during a worst case scenario like a critical home repair or a sudden medical bill. Most people in the U.S. have no emergency savings fund at all.

The third phase to accomplishing your financial goals in 2020 is creating a full plan for how to look at your big financial picture. If you’re concerned about running out of money in retirement or whether you’ll need long-term care, the best time to put a place in motion for these issues in well in advance of an emergency situation.

If you are a few years away or even a decade away from retirement, expand your debt payoff plan from beyond just your home. Think about car payments, student loan debt, and credit card debt. All of these can create big expenses when you’re on a fixed income in retirement and don’t want to dip into your emergency fund or your overall savings to pay for regular costs.

Need help fitting your financial plan with your estate plan? Now is a great time to schedule a chance to speak with a dedicated estate planning lawyer about your options.

Getting together for the holidays or to celebrate the new year gives you a great opportunity to reconnect with your loved ones. But if one of the things on your to-do list this year is to discuss estate planning arrangements, you might be concerned about the possibility for conflict.

The good news is that there are delicate ways to handle this situation to decrease your chances of ending up in an argument with your loved ones. Estate planning is a very personal and individualized process, which means that the great deal of thinking you might have put into the process, won’t necessarily translate to your loved ones. And yet, planning before disability or death is one of the best gifts that you can give your family.

Many family members are embarrassed to discuss the topic of money, but might miss out on beneficial financial strategies like putting together trusts. If you’re thinking about using a trust as one of your estate planning strategies, however, you can increase your chances of success by communicating your financial values to your children early on.

When you have a conversation about trust and estate planning, approach this topic with care and respect. Be both considerate and candid. The next thing to consider is to rely on the insight from a knowledgeable estate planning attorney to verify that your estate planning is customized to the goals you intend to accomplish.

The investment that you spend in putting together an estate plan, especially involving a trust can payoff in spades for your loved ones when they understood why the trust was being used and when you have properly funded it. Schedule a consultation today with a dedicated estate planning lawyer to talk through more benefits of trust funding.       

Deciding to disinherit someone in your family is fraught with emotional considerations and concerns. Wondering whether or not you should inform the family member about your intention to exclude them from your estate planning can be a very difficult question to answer and one that you should discuss directly with your estate planning lawyer.

An estate planning attorney can help you put together the relevant strategies and tools to ensure that your estate planning goals are accomplished. In the event that you decide to inform your children that they are not receiving an inheritance, this conversation should be handled with care.

One common reason to decide not to pass on an inheritance to your children is because you believe that your money could serve a bigger and better purpose in your community. This doesn’t necessarily mean, however, that your loved ones will understand this decision that you have made.

If you intend to leave your assets behind to someone other than your family members, it’s important to communicate that plan now if you feel confident in your decision. Fleshing out your plan with your loved ones does allow them to be a part of the process, and ensures that you leave behind funds to pay for your final expenses. The last thing you want is to become a burden for your family financially.

You might need to adjust your estate plan in the future if you change your mind. This is why having an established relationship with an experienced estate planning lawyer can make this process easier. Explain to your children your reasons and decisions behind opting to pass on an inheritance or assets to other organizations or people than them.

This clears up expectations, but it doesn’t mean that this conversation will be easy. Discussing your missions, values and goals for your assets after you pass away can help your loved ones better understand the decision you’ve come to.        

Do you know how to decide whether or not you need a trust, a will, or both? Most people partner with an experienced estate planning lawyer when putting together their strategy for their estate.

A lawyer can help you review existing estate planning documents and help you decide what assets will be passed through a trust versus your will.

Attorney Neel Shah recently shared the difference between a will and a trust with the Tribune. He says, “A will is like leaving your family a recipe to bake a cake after you’ve passed away.” In this analogy, someone in your family would have to go buy the ingredients to make the cake and prepare them in the right order.

Putting together a trust, however, allows you to make the initial recipe while you’re still around. When you create a trust, you’d control how the cake is made and then you can decide who you’ll share this with through your trust.

One common reason people turn to a trust is because you put in the work today to make things easier for your loved ones in the future.

Even though a will might be easier and faster to put together, a trust equips you with more control and the flexibility many people prefer. With the added layer of privacy afforded by a trust, you also get peace of mind that your plans will be kept private between your trustees and your beneficiaries alone rather than becoming a matter of public record.

Far too many Americans overlook the potential benefits of estate planning because they believe it’s too difficult, not necessary for their specific situation or too expensive. But there can be major costs to ignoring components of your estate plan. Most people are familiar with the benefits afforded by a will, but a new study shows that up to 66% of Americans don’t have a healthcare directive.

A healthcare directive is a legal document in which you lay out your decisions for caregivers in the event that you suffer from dementia or another similar ailment.

It can also provide important guidance around whether or not you want life-sustaining care. Healthcare directives sometimes go under other names depending on your specific location, including medical directives, living wills, or durable health care powers of attorney.

In general, most of these documents serve the same function to provide direction and guidance around how the death and medical decisions affecting you should be made. Health care directives are truly a relatively new legal document because they only came into existence in 1976 in California when the first law was passed enabling health care directives.

By 1992, however, all 50 states across the country had similar laws. Make sure that you have incorporated your intention for a health care directive into your estate planning by sitting down and consulting with an experienced and knowledgeable estate planning lawyer.       

Have you thought about using various estate planning strategies, such as a trust, to establish some level of control and clarity during your estate planning process? The establishment of a family trust might be one specific way in which you intend to accomplish this goal.

There are several different key players involved in the establishment of a family trust, including the creator of the trust who is most often the person who possesses family wealth and has established an estate plan for the benefit of his or her family.

In addition to the trust creator, there are the beneficiaries of the trust who are typically the grandchildren or the children of the trust maker or settlor. These beneficiaries are the recipients of assets inside the trust in alignment with the terms established in the trust itself. Additionally, there are other parties, such as secondary beneficiaries who are eligible to receive the trust assets in the event that some even occurs that triggers the passing of assets to another generation, such as if the primary beneficiary has passed away. The final key person involved in the management of a family trust is the trustee who manages or oversees the operation of the trust and directs assets inside the trust in accordance with the settlor’s instructions when the trust was established.

One party who might also become eligible to trust assets is a non-beneficiary spouse, i.e. someone who is married to a beneficiary in the trust. Many families using the family trust will engage in the process of asset protection planning to attempt to minimize the possibility that a soon to be ex-spouse will be able to tap into those assets.       

If you own a company, you can’t afford to think just about the day to day. In fact, even planning ahead for your own company’s future while you are still involved might not be enough to protect your business from success long into the future. This is because you can’t afford to neglect the power of a process known as succession planning.

Succession planning refers to the process for developing, identifying, hiring and training new leaders who are eligible to replace older leaders when those leaders retire, pass away or leave. This process greatly increases the chances of capable and experienced employees being able to step in and assume these roles as they become available.

There are many different facets involved in succession planning and this process is most successful when it is implemented many years in advance of an owner thinking about leaving. This is because there are many components to establishing a leadership and transition plan and identifying and training the proper timeline to take over the company.

Organizations use succession planning as one process to ensure that the right employees have been recruited, developed, and trained to fill key roles within the company. Top talent employees should then exercise their skills, abilities, and knowledge to be prepared for a promotion and advancement into increasingly more challenging roles.

This gives the owners of the business and other key employees who are planning an exit in next several years the peace of mind that someone is there to step in to these important roles as needed in the future. If your business has not yet incorporated a succession planning into its long range goals, schedule a consultation with an experienced business succession planning lawyer today.       

In the event that you become incapacitated, it will be important for anyone you have named as a power of attorney agent to be able to make decisions on your behalf.

If you are incapacitated, you are unable to make these decisions for yourself, but without appropriate estate planning documents, appointing someone else to do this, this can create confusion, chaos or even court hearings for your family members.

It’s important to also think about how the Health Insurance Portability and Accountability Act known as HIPAA limits disclosure, release or use of any individually identifiable health information.

Power of attorney agents and a legal heir could be eligible to get access to this information in order to use it to act on your behalf. However, even though there might be other people that you want to be informed about your current health status, it is important to include these people in your estate planning process.

For example, if you have a significant other to whom you are not married, that person is not necessarily entitled to automatically receive information about your health status. If your parents are approved to receive information about your health status, but do not have a good relationship with your significant other or are unlikely to inform your significant other about current condition, this can generate problems.

Make sure that you think about who else should be included as a power of attorney agent when establishing your estate planning documents.