The pandemic has had far reaching implications for many individuals and families and that has never been more true than now as it relates to the case for women. Women face a higher likelihood of a greater life expectancy than men, meaning that issues of long-term care, health care costs, and how to afford a lengthy retirement are all top of mind.
A recent study of estate planning attorneys found that many women visited their offices to make changes to their estate plans across 2020 and 2021. In fact, nearly 90% of estate planning lawyers said that female clients had experienced significant financial repercussions due to the global pandemic. This included leaving the workforce, taking a pay cut or losing their jobs entirely.
Prolonged life expectancy became the number one estate planning issue for women and men alike in 2020 and estate planning attorneys reported that many of their female clients visited their offices to make changes to their estate plan. I
n fact, nearly 90% of estate planning lawyers who participated in a recent TD Wealth survey said that they made changes to their female clients’ estate plans, including updating wills, creating post mortem letters, updating letter of attorney documents and changing beneficiary or guardian designations. If it’s been a while since you’ve sat down with your experienced estate planning lawyer to talk through your options, schedule a consultation with an experienced lawyer today.
Which assets should you plan to pass down? Which are those you should intend to live off of and how do taxes impact the equation? Thinking about all of these things together as part of your overall estate planning strategy is important and it should be discussed directly with your estate planning lawyer. Identifying your goals is the cornerstone of determining how your retirement assets fit into the bigger picture.
If you want to leave the bulk of your assets to certain beneficiaries or accomplish philanthropic and charitable goals, these are things that will need to work together or be planned for appropriately. Make sure that your accounts are titled and earmarked correctly, which can enable you to get maximum tax efficiency out of your estate plan.
You can avoid problems by carefully looking at titling, beneficiary designations and other legal documents on an annual basis to verify that all of your assets match up with your plans and expectations. You’ll want to plan for both your core assets and additional capital. Stable sources of income, such as social security payments, annuities and pensions can be supplemented by taking distributions from your taxable investments.
You’ll also want to think about how these taxable investments fit into the bigger picture of assets transfer in your estate planning. For more assistance with matching your retirement planning goals for your estate plan, set up a time to speak with an estate planning lawyer in your area.
The vast majority of estates in the United States are not eligible for the federal estate tax but you may still be questioning how an asset will be appropriately determined as far as cost basis. Cost basis calculations for estates are different for those used for other tax purposes. In order to calculate capital gains on assets that you own, cost basis has to do with the original value of the asset for tax purposes with a few other adjustments.
When it comes to an item that you have inherited as part of someone’s estate, the cost basis is typically equal to what is known as the fair market value of the asset or the property at the time the person passed away. Fair market value relates to what the asset would command in the marketplace. If the asset has decreased in value since the date of death or the date of the transfer, the estate administrator can decide to use alternate valuation dates for the estate.
You will need to consult with an experienced estate planning attorney if there are assets inside your estate that might require more advanced planning opportunities. A consultation with an estate planning lawyer can answer many of the most common questions presented by those hoping to accomplish estate planning and to minimize concerns and problems in the future.
Most people are well aware of the fact that they need to plan for retirement. If you thought just figuring out how much to invest into your retirement plans was difficult, just wait until it comes time to consolidate all of the income streams within your retirement plans.
The three primary issues associated with pre-retirement planning are how much to invest, how to allocate your assets, and where the assets are located. In post-retirement, however, there are many more complicating factors that make it all the more important to retain the services of a professional.
Some of the concerns associated with post-retirement planning include when to begin Social Security benefits, when to draw down a pension, asset allocation, how much to withdraw, the differences between drawdowns from tax deferred versus taxable accounts and planning for how your estate will be used after you’re gone. It can be very difficult to predict the future but it is even more important to plan for it to make things easier for your loved ones and to ensure that you have a clear understanding of what will happen in your estate in the future.
Schedule a time to speak with an experienced and knowledgeable estate planning attorney in your area.
Without any specific plan in place, such as how you’ll qualify for Medicaid or a long term care insurance policy, you are said to be self-insured for long term care events. Recent studies have shown that up to 80% of women aged 65 and above and 60% of men in the same age category will require long term care at some point in their life.
Given that the average annual cost for semi private nursing home is over $93,000 and the median annual cost for home care is $55,000, you’ll want some plan in place to help prepare you for the financial implications of long term care.
Even one spouse suffering a long term care event that requires a nursing home stay can decimate a couple’s retirement savings. Scheduling a consultation with an elder law attorney is your best opportunity to get questions asked about long term care insurance and other opportunities for funding these potential medical needs.
While no one wants to find themselves in the position of unexpectedly paying for nursing home care, this happens all too often. You’ll want to speak directly with an elder law attorney who can help you work through the connections between your estate plan and your long term care plan.
If you have recently been appointed as a power of attorney for an adult child who is suffering from serious health issues, it is important to think about all of the different aspects of their care that might require you to step in.
A power of attorney enables you to make decisions or take actions on their behalf because they are unable to do so. Most frequently with an ailing adult child, this relates to concepts such as taking care of their financial affairs. Ownership of property raises other questions and getting someone’s affairs in order can help to minimize the confusion or frustration experienced by you or the power of attorney creator.
Most people will own household items, a checking account, vehicles and other assets. In addition to preparing a will and listing an agent on the power of attorney, it’s a good idea to reach out to the bank directly to ensure that someone is appointed as the payable on death beneficiary of the checking account.
The bank might also require their own internal power of attorney form to enable you as the agent to make decisions on his behalf and take actions for him. You can be named as a beneficiary of the vehicles so long as the estate plan and wills are created properly. This adult child may be able to transfer ownership with vehicles too as well.
A medical power of attorney and directive to physicians are other documents that might be needed to help ensure that there are plans in place to ask the important questions and take actions quickly should the need arise. Schedule a consultation today with a New Jersey estate planning attorney to learn more about your options.
The pandemic represented a seismic shift in the way that many people view their estate plans. Those who did not have documents like powers of attorney and will in place flocked to estate planning lawyers to create these, but other factors have made estate planning more challenging in recent years.
The main areas of risk as perceived by people in the United States has changed since the beginning of the pandemic. For example, at the outset of the pandemic, family conflict was the greatest threat to estate planning but this has now been surpassed by the risks associated with prolonged life expectancy and health care costs.
In fact, health care costs and prolonged life expectancy was named as the number one threat by three times the percentage of people who reported those concerns in 2019. Many people have become more aware of the rising costs of expenses associated with long term care, especially if their loved ones had to move into assisted living or nursing homes in this past year.
Family conflict dropped from around one quarter of respondents down to 10% in the last year.
Family conflict can still remain a potential risk to your estate plan as it relates to blended families. As a result of the pandemic, divorce rates skyrocketed, difficult family decisions had to be faced and made and priorities shifted overall. This may have caused you to rethink your estate plan and your other strategies. Going forward, scheduling a consultation with an experienced estate planning lawyer in New Jersey can help you to accomplish your personal goals.
Gray divorce, which refers to the number of adults age 50 and above deciding to end their marriages has increased by over 109% in the last quarter of a century. There are many different reasons contributing to the rise in gray divorce.
The couple’s purpose can change when adult children move away, new opportunities are embraced by those for living longer, women are becoming more financially dependent enabling them to make decisions like this, society has overall become more accepting of divorce and many people are choosing happiness above lifestyle and financial security.
But the primary fact remains; divorce after age 50 can be devastating financially when most of your spending habits, savings and intentions for retirement are built off of both of you. The cost of living on your own can be up to 40% to 50% higher than for couples when looking at it on per person basis. The cost of divorce alone can be a financial setback that is significant, generating over $15,000 more just to end the marriage.
Household income can also decrease significantly after a gray divorce. It drops by 40% for women but only 25% for men. Scheduling a consultation with an experienced New Jersey estate planning lawyer is one of the most important things you can do when you are contemplating gray divorce to ensure that all of your documents and strategies are aligned with where you’re headed not where you’ve been.
Most people are under the impression that estate planning is all about distributing your assets after you pass away or believe that it’s only for extremely wealthy families. However, all individuals and families can benefit from creating an estate plan. By ensuring that you have a comprehensive estate plan aligned with your needs, you are able to accomplish multiple goals at once.
Without an estate plan, the issues associated with passing on your assets will be left to the courts and an appointed administrator to handle. Most people want to exercise some layer of control beyond that with their personal planning.
Some of the goals that you can accomplish with your estate planning include:
- Allowing you to enjoy your current lifestyle or your intended retirement lifestyle.
- Keeping your affairs private when you pass away.
- Leaving behind a lasting legacy for your loved ones.
- Dramatically lowering your estate, gift, income and generation skipping taxes.
- Protecting your assets not just today but for many generations to come.
- Ensuring that your wishes are carried out in an end of life situation.
From irrevocable trusts to wills to powers of attorney, life insurance trusts, family limited partnerships and more, the support of an experienced estate planning attorney can prove invaluable when it is time to accomplish your estate plan.
Need more help or have other questions about your personal plan? We’re here to guide you through that process or help you with updating an existing estate plan. Schedule a time to speak with our NJ estate planning lawyer today to get assistance with your needs.
A durable power of attorney maintains control of the property, legal and financial matters that are spelled out in the agreement even after the principal or the creator of that document becomes mentally incapacitated. A durable power of attorney enables someone to pay medical bills on behalf of the principal but decisions related to the health of the creator of the document cannot be made by the durable agent.
A durable power of attorney for finances is a separate document. This enables the chosen agent to manage the financial and business affairs of the principal, such as mailing or depositing Social Security checks, filing tax returns, signing checks, or managing investment accounts. Institutions that are doing business with the creator of the power of attorney document will ask to see the signed document before enabling the agent to take these actions.
With so much power in the form of financial decisionmaking, who you put into this role has big implications and should be considered carefully.
The durable power of attorney for finances should be created by an estate planning attorney and should spell out the responsibilities of the agent so that the agent is equipped with the necessary information to make informed decisions on behalf of the creator of the document.
Approximately 60 million workers across the United States rely on the benefits of tax advantage savings accounts, such as a 401(k) when it comes to saving for their future. Many people are eligible to contribute as much as $19,500 to their 401(k) in 2021 but that limit can be updated from year to year for the purposes of keeping pace with inflation.
When you are able to invest $20,000 per year, this can have significant implications for your retirement as well as giving assets to your loved ones in the future. There are three primary reasons why most people choose to try to max out their 401(k) in a given year. These include:
- Growing their wealth on a tax advantage basis.
- Reducing their taxable income for the purpose of saving on taxes.
- Saving enough money to truly retire one day.
Many people vastly underestimate how much they’ll need to retire and this is even more problematic given recent data on increasing longevity. Retirement, for example, could last up to 30 years or even longer. Setting aside over $19,000 a year in your 401(k) account is not necessarily easy. This makes it extremely important to have a consultation with an experienced financial planner and to discuss with an estate planning lawyer how all of this fits into your bigger estate plan.
Overturning a trial court’s decision on a will or trust matter is not simple. This is largely due to the fact that in probate court judges are given wide discretions for their decisions.
It can be frustrating for a beneficiary who assumed they were in the right to realize that they were not successful in their initial form of estate litigation, but it does not always mean that it is in their best interests to proceed with filing an appeal.
The appellate court does not have the power to rehear the case. Instead the appellate court must adhere to one of three standards when reviewing a case on appeal and the two most commonly used standards in these cases are very difficult to meet by the appealing party.
The general appellate review standards are de novo, substantial evidence, and abuse of discretion. Overturning a trial court decision with the de novo review standard is very rare even though it is the best standard to use. De novo review applies to strictly legal questions.
Under the substantial evidence standard, the appellate court evaluates the facts as decided by the trial court and determines whether there was enough evidence to support those factual conclusions. This appellate court is not able to rehear or relitigate the case. Finally the abuse of discretion standard applies only when a trial court has the power to exercise discretion, which is the case in many probate court matters. But a trial court’s decision will only be turned over on appeal if the trial court’s action was a clear case of abusing their discretion.
A revocable living trust enables the creator to make changes to that trust at any point in time prior to their death. This includes revoking the trust entirely, meaning that it becomes obsolete.
There are any different number of reasons why a person may wish to revoke a trust but the most common reasons for making this change include updates in their life. For example, a divorce might prompt someone to dissolve a trust that was previously created as a joint document with a soon-to-be former spouse.
If the changes to be made to a revocable living trust are so extensive in nature that it might simply be easier to dissolve the trust entirely and to start fresh, the creator of the trust has the ability to do this. The first step in dissolving your revocable trust is to remove all of the assets that have been put inside it. This includes changing deeds, titles, and any other legal documents to reflect ownership of the asset from the trust back to the grantor of the trust or the original owner.
It is strongly recommended that when making any changes to a revocable living trust, including the dissolution of the trust completely, that you schedule a consultation with an experienced and knowledgeable estate planning lawyer.
Planning ahead is a critical aspect of your comprehensive estate planning and it doesn’t stop just at the creation and signing of your documents. While creating and signing these documents is certainly a key component of ensuring that your wishes are respected and that you have answered many of the most important questions around the topics of estate planning, it’s imperative that your loved ones be able to access the information necessary to carry out these wishes.
These documents need to be stored and quickly located if something happens to you. Either your spouse or other family members should have access to the following materials in case of an emergency:
- Email account information.
- Pins or passwords to access your phone or your computers.
- A list of insurance policies and financial accounts, including passwords, login details and websites to access that login information.
- List of your intangible and tangible property.
- Your health care and financial power of attorney documents.
- Any estate planning documents that outline your wishes, including a will or a trust.
In the immediate aftermath of an accident impacting your ability to take care of yourself, or in the sudden event of your passing away, you need the support of your family members to be able to take action quickly. If they don’t know where to find these important documents, their ability to take action for your estate plan could be extremely limited.
While you’ll create your will while you’re still alive, it will be one of your loved ones sorting through your paperwork to find it once you pass away. If you have multiple documents or it’s not easy for them to find, it’s easy to make mistakes about what the will includes or if it’s the most recent version.
Storing only the most recent version of your will makes it simpler for your personal representative to be completely clear that they have the right version. Previous wills should ideally be destroyed.
If you’re keeping copies of old wills as possible evidence that your executor might need if a family member comes forward with those older wills, sort them by date with the newest at the front. You might even leave behind a letter for your executor stating that there are previous but invalid versions of your will if you are concerned about the possibility of a will contest. If you’re the executor right now, check the dates on all the wills. If they all include a statement about revoking prior wills, the most recent one is the accurate one.
If you find a will that has handwriting on it, such as notes in the margins, this might be notes for editing. See if you can contact the estate planning lawyer who helped your family member draft the will. If you can only find a copy of the will, keep searching. You’ll want an original to submit to probate court.
If no valid version of the will can be found intestate succession rules might apply.
There are many different terms associated with the administration of a trust, a will or an estate. One common example is the term fiduciary. This refers to an individual who has the legal obligation and power to act on behalf of someone else in situations that require honesty, trust and loyalty.
Fiduciaries have a legal responsibility to act in the best interests of the person who is delegated this responsibility or the beneficiaries associated with the strategies in question.
Fiduciaries can serve in a variety of roles in your estate, both during your life and after you pass away. Fiduciaries can include professionals like bankers, accountants, real estate agents, mortgage brokers, business advisors and financial advisors. One of the most common ways that you will come into contact with a fiduciary is by determining who will serve in the role of executor of your estate.
The executor of your estate should be someone that you trust to handle the important aspects of closing out your formal estate. This requires careful consideration of the beneficiaries and assets in play and the complexities associated with administering your estate.
If the pandemic taught us anything, it’s to be prepared for the unexpected. More people than ever used this opportunity to get on top of their planning. If you went though difficult issues related to your health or experienced this with a loved one in 2020 or 2021, it’s a good time to speak with a dedicated estate planning lawyer to ensure your plans cover all your needs.
Your estate planning should cover not only what happens to any of your children or your property once you pass away, but provisions for what will happen to you and your affairs if you were to become sick or disabled during your life.
Most people view estate planning as the process of documenting your property transfer plans when they pass away. While that’s important and can make things much easier for your beneficiaries when you pass away, some of the most complex legal questions emerge when you’re hurt or ill and not able to communicate what care you’d like on your own. In the heat of the moment, medical decisions must be made, but if you haven’t taken the time to document these or appoint someone who knows them to make those calls on your behalf, your family members can get stuck in red tape during a period where timely decision-making is key.
If you have specific feelings about what medical care you’d like and when, make sure this is written down with the help of your local estate planning attorney. If you’re appointing someone else in a power of attorney role for you, be sure they are clear about how the process works and are comfortable serving in this role.
Don’t let unexpected events catch you off guard. Schedule a time to speak with an experienced estate planning attorney today.
Many different estate planning tools can be used to help you accomplish your goals and it is recommended that you sit down with a knowledgeable New Jersey estate planning lawyer so that you have clarity over the goals you intend to accomplish and the strategies and tools that may be aligned with them.
You might need a will to be drafted in conjunction with the trust and this is known as a pour over will. For those assets that are not transferred into the trust, the will picks up those assets at the time of death and formally transfers them into the trust for central distribution.
You will also need a document known as a power of attorney which is required for those legal matters that cannot be handled by the trust, such as those assets that will not transfer to the trust or items that cannot be transferred like rights under health insurance policies or pension benefits or rights. In addition, a living will might be recommended by your New Jersey estate planning attorney more broadly or a health care power of attorney, which is used to handle substitute medical decision-making processes during lifetime and death.
Once a living trust is established, it can be changed. You may choose to use a living trust, a will and other estate planning strategies based on your initial consultation with an attorney who will help you clarify what you intend to accomplish and help you create a plan that not only serves you today but is capable of adapting with you in the future.
An executor can be appointed in someone’s will, but this does not obligate them to serve in this role. An executor has the opportunity to decline this chance, and when you are choosing someone as your own executor you should be clear that they want to serve in the role in the first place. You can avoid unnecessary delays for your beneficiaries by naming an executor who is aware of this appointment and is also willing to serve.
Once a will is filed with the court, an executor must be named to handle out the closing of the estate. If the will has named this person, then the court will formalize their role. At this time, if the executor does not want to serve, the proposed person can state this. Once that individual has been formally appointed as the personal representative, it becomes more difficult, although not impossible, for them to step down.
If the estate is still unsettled at the time the already-appointed executor wants to step down, a petition needs to be filed in the same probate court in which the estate was opened. A probate judge does have the discretion to reject this decision, so it’s good for the person filing this petition to have a solid reason as to why they don’t want to serve.
If probate was already opened and the executor had done some work to close out the estate, then this individual needs to provide full records of everything done up until that point, such as receipts, current balances, and notes related to any transactions made on behalf of the estate. In the vast majority of cases, you cannot be formally released until you are able to provide all of this so that the new person stepping in has everything they need.
As you can see, things can get complex when a NJ executor decides not to proceed. Although naming a family member to this role might be the easiest thing for your estate planning, it’s not always the best choice. Once you meet with your NJ estate planning lawyer, discuss how to proceed with a conversation involving your intended personal rep so that they are clear on what’s required.
Your will is the most basic component of your estate plan, but it doesn’t cover all your primary needs. In this official legal document, you can state a lot of things about your intentions, such as who you intend to take over as the executor of your estate and who you’d like to have the responsibility of caring for your minor children if something happens to you.
But it’s a mistake to assume that your will encompasses every aspect of your planning. Leaving your will as the only document might not accomplish all the goals you intended, leaving your loved ones to handle the rest.
Many things pass to loved ones or intended organizations outside of your will. Some do this by default based on the ownership of those assets at the time, but others will require you to fill out additional paperwork. This includes your IRA or your life insurance policy, where you’ll need to direct the managers of those accounts how to handle the transfer of your assets or funds.
In addition to those accounts, there are other things your will cannot accomplish, such as:
- Adding privacy to your estate plan. A will is public record in your state, so other people can legally request access to that documentation and see what’s in your estate.
- Pass on property designated as joint with right of survivorship. This will automatically go to the joint owner when you pass away.
- Pass on property that technically belongs to a living trust. The trust and the trustee are responsible for adhering to the terms of the created trust in these circumstances.
If you have more questions about what a will can do and cannot do, run these questions by an experienced estate planner today.