Category: Estate Planning

You start your estate planning process with the best of intentions, thinking carefully about who you want to include and what you’d like them to have. But what happens when your family members don’t agree with your decisions? Since you won’t be around to help explain your intentions, how can you work ahead to prevent the possibility of will challenges?

Will challenges can be brought when someone things you were affected by undue influence, did not know what you were signing, or did not have appropriate mental capacity to decide what to do with your estate.

More often than not, a will challenge is brought by a disgruntled family member who expected more from your estate. Although a will challenge can be initiated by a family member, this does not always mean this will succeed. Being frustrated with the provisions inside the will alone is not enough to succeed with a claim. Instead, the person bringing the suit must also show evidence regarding why the will should be classified as invalid. This is not an easy argument to make, although the very act of filing a will challenge can add delays to the proper administration of your estate.

Most estate planning attorneys know about the common reasons behind a will challenge and are prepared to prevent it during the process of drafting the will. If you are concerned about taking precautionary measures to minimize this risk, talk to your NJ estate planning lawyer today about how best to avoid the possibility of will contests with the drafting language in your document.

For years, estate planning has been plagued by the perception that it’s only for the rich. As plenty of news stories show, even the rich and famous often neglect their estate planning at the risk of their loved ones.

But smart future-focused people know that estate planning goes far beyond just protecting the assets of the wealthy. Estate planning accomplishes goals that affect you during your lifetime, too, especially as it relates to disability and incapacity planning.

Some of the other things you can accomplish with estate planning include:

• Protecting those who depend on you financially
• Naming a guardian for your minor children
• Naming the loved ones and organizations you want to support with your assets when you pass away
• Avoid probate to make things easier for your family
• Minimize your estate’s exposure to taxes
• Appoint a trustee and executor
• Document the kind of care you’d like to receive when you need support, including whether or not you want medical care that prolongs your life
• Express your wishes about any funeral or memorial arrangements

All of these are important considerations that allow you to exercise some level of control over the management of your affairs. Making things easier for you and for your family members allows for more peace and grieving if something does happen, but it also gives you confidence that if you become disabled or unable to care for yourself that you have documented the kind of care you want to receive.

If you’ve printed out a basic will, signed it, stored it, and then forgotten about it, this could set your loved ones up for challenges and frustrations if something happens to you. A will is a crucial document for your basic estate planning, but the work doesn’t end there for most people.

Although a will does provide for how many of your assets will be passed along, it does not cover every kind of asset you own. Furthermore, plenty of people leave many aspects out of their will in this modern age, including what happens to the accounts and information they own online.

The truth is that a will does not cover everything. There are some assets, such as a life insurance policy, that will be overridden by company-specific forms you’ve filed. These include all accounts with beneficiary designations. Make sure that you’ve filled out these forms and updated them on an annual basis or after any big life event to make sure that you are protected and that your loved ones are cared ford.

Your will enables you to name a personal representative in the form of an executor, who oversees your property being distributed and assisting you through the probate process. In addition to your life insurance policy, however, certain other assets fall outside of the management of your will. These include your qualified retirement accounts and those items that fall under a transfer-on-death designation.

One common situation when people overlook updating these key forms is after a divorce. It’s likely your plans have changed after getting a divorce, but you need to make sure that your will and other paperwork reflect your new situation.

Ready to talk options? Set up a meeting with an estate planning lawyer today.  

Congress has a way of keeping things interesting, don’t they? HR 1994 is also known as the SECURE act. SECURE stands for “Setting Every Community up for Retirement Enhancement”, but as is often the case-it may have you feeling a little less than “secure.”

It has support on both the Democratic side as well as the Republican side and there are similar bills in both Senate and House of Representatives. There’s a lot to take in on the proposals, and it is just a proposal but a few things to keep an eye on:

1. the required minimum distribution age would be raised from 70 1/2 to 72 (not that big of a deal),
2. IRAs which are inherited may need to be completely distributed within a five-year, or a 10 year window (a pretty huge difference from now where a beneficiary is able to stretch – and therefore not have to pay the taxes – over their life expectancy.)

The consequences can be huge. Imagine being forced to take income (and therefore have to pay higher income taxes) on income which you don’t need now, and could’ve possibly deferred under the existing law.

There are planning opportunities now, and on our legal planning, tax planning and financial planning practices we are having conversations regarding the same. Again, it is not law yet-but when you have both Democratic and Republican support (very rare), it does increase the odds that something is going to go through.

If you previously prepared a will in your old state of residence and it was valid there, it is most likely valid in your new state. This is because many states across the country have laws that explicitly say that. However, out of state wills could pose serious problems and could at least prompt you to think about generating new will. One of the most important of these is marital property rules.

For example, if you married and have moved from the community property state to common law state then the rules about what your spouse and you can own might change. For community property states, spouses typically together will own anything together that is acquired while they are married. In other states, each spouse will typically own whatever is in his or her own name. Moving to a community property state means that the state could treat your property as if it had been acquired within the community property state and this might not be what you and your spouse wanted.

Another aspect of updating your estate plan when you move to a new location has to do with your executor. Your executor might also be called your personal representative but this is the person who you name in your will to wrap up your estate administration after you pass away. This person could pay the bills, collect the property, make tax payments, and distribute what remains for people named in the will. Some states have clear restrictions about who can serve as your executor, so even if your will is still valid, you might want to generate a new one, naming a different person as an executor. You can ask all of these questions with your experienced estate planning lawyer.     

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There are plenty of different reasons to use an estate planning lawyer to help you write a will, but worrying about the state claiming entitlement to all of the inheritance you leave behind should not be one of them. The legal term for passing away without a will is known as dying intestate.

State law does kick in and each state has unique rules about who inherits what. But many people are under the false impression that the state claims all of the property and either sells it or distributes it based on their needs. In some states, a surviving spouse and minor children will share the assets of a deceased parent, but this depends on your individual state laws. Typically, a spouse and children are first in line to inherit.

One of the most important things you can do is to write up a will. Even if the state doesn’t get your money regardless, you still want to have a say over who does. Do not leave that decision up to state law and interpretation from a third party who is not familiar with you and your unique family dynamics.

Work together with a knowledgeable estate planning lawyer to discuss how a will can help address many of the common concerns related to the closing out of your estate.     

You might have heard in the past that it is extremely important to put together the most basic of estate planning tools; a will if you have children. If you pass away without a will, the state is responsible for making many of the decisions about your property and who will take care of your kids.

Putting together your own will after sitting down with an estate planning lawyer gives you more of a say about the property that you will leave behind to your kids and who is appointed to take care of them. There are five primary reasons you need to consider using a will in your estate planning. These include:

• A will enables you to name a guardian for your minor children if something were to happen to you or to you and your partner. This opinion can be extremely important if there are differing opinions in your family about who the guardian should be.
• A will allows you to name a guardian for the finances of the children. A person will also have to be appointed to take care of your children’s finances if you pass away.
• You can decide who will wrap up your estate and serve as an executor.
• You can use your will to set up long term management for the property that you pass on to your children.
• A will determines who will receive what and who should get nothing. If you have specific wishes about how your property is to be passed on to your children, a will is the most appropriate way to do this.

Your executor will have to make judgment calls about certain types of your property but hiring an experienced estate planning lawyer can help you to address many of these questions and concerns promptly.    

Tom Benson passed away in 2018 at age 90. He left behind a significant empire that included multiple car dealerships and two professional sports teams out of New Orleans. Sadly, however, many of the last years of his life were spent with his heirs arguing over who is entitled to receive what. The legal battle was sparked by claims that Benson was not mentally competent when he made significant changes to his existing estate plans.

Two of his grandchildren and his daughter argued that he was acting under the guidance of his third wife. The claims were rejected and the Louisiana court agreed. This kind of complicated battle could face a growing number of people established as billionaires in the United States. At least 15 billionaires passed away in 2018, leaving a collective amount of assets of $60 billion behind. This could come with complicated asset nature such as sports teams, properties, business interests, planes, yachts, and more. The number of US billionaires has grown as of late, and the rich are living longer than ever, adding further years of asset accumulation. The fight over an estate can prove especially difficult for loved ones who wish to grieve and move on from the loss of a family member. Scheduling a consultation with an estate planning attorney can help you identify some of the points of conflict that could emerge in your estate plan.       

According to Schwab’s 2017 Modern Wealth Survey, plenty of people are simply uncomfortable talking about their finances with their family and friends. However, if any of these people play an important role such as personal representative, executor, trustee or beneficiary in your own estate plan, it could be a big mistake to skip out on these important topics.

According to the study, nearly 60% of Americans would rather discuss politics with their friends and family than finances. Starting the conversation about money with your entire family could help to lay the ground work in the event that any of them play a role in your financial future.

Many children report wishing after their parents have passed away that they would have known more about their parents’ intended estate plans so that they could effectively honor the loved one’s wishes or understand the decision process that got their family member to that point.

But many people skip over the process of talking about financial matters, keeping beneficiaries and other key stakeholders in the dark. As retirement planning and estate planning become more immediate financial concerns as you get older, it could be beneficial to discuss your estate planning options and plans with your loved ones, family and friends. Talking with your estate planning attorney can help to get this conversation going and assist you with understanding some of the best ways to approach this topic.         

Research shows that people who have average health and moderate levels of wealth will be better off deferring their Social Security benefits until age 70, when they can. However, approximately 90% of those who are eligible to get those benefits, claim them before the full benefit age of 67.

Of course there are many different reasons why you might choose to take Social Security early, including limited financial resources, considerations having to do with a spouse, poor health or even concern about the possibility of social security’s general survival. However, many people are not fully optimizing this decision and setting themselves up for success with their financial future in retirement. Academic research suggests that psychology could be behind why so many people are electing their Social Security benefits early.

This involves the human preference to take an immediate reward over a future one. Deciding what other aspects you could use or tap into as you get older could be an important component of deciding when it makes sense to take Social Security. Sitting down and calculating out the various resources to pull from in your older years could help you make an informed decision about what is truly best for you.      

Many people are under the impression that if they do not have significant assets that meet the estate tax laws in their country that they do not have an estate. But no person is exempt from having a complicated, large or even messy estate. Even people who assume that they have very little still have a home, digital accounts, possessions, a car, bank accounts and important sentimental items. Unfortunately, with a busy day to day life, it can easily seem like estate planning is not a top priority but you still must make one to make things easier for your heirs.

Some of the most important things you can do to begin the estate planning process are to review the people who you’ve already named to carry out specific duties and to review the names of those people who will receive benefits if something were to happen to you. Any key decisions you’ve made in the past regarding your estate planning could even include listing beneficiaries on retirement plan accounts or life insurance policies. These have significant potential consequences for the future.

Your estate plan can also benefit from regular and routine maintenance accomplished by sitting down with a knowledgeable estate planning lawyer to discuss whether or not changes in your life should prompt you to update materials and documents that are no longer in line with your family situation or your goals.     

In the digital stage, estate administration requires going one step further and ensuring that you have an appropriate strategy to share the passwords to your email and online accounts as well as your computer. Things can get complicated for your personal representative, estate executor or family members if you haven’t thought this process through.

Many people today receive financial statements electronically. Increasingly, plenty of people have dozens of online accounts as well and many of these have different passwords in order to decrease the chances of identity theft or being hacked. Having online access to investments and other financial details is a convenience of living in the modern age.

However, many of these sites now require complex and comprehensive passwords to access these online details. This can create unintended consequences and difficulties for an executor who must be able to gain access to each individual account in order to distribute those assets to trustees or heirs based on the language listed in the decedent’s will.

This even played out recently in a news story when the CEO of a Canadian cryptocurrency exchange passed away suddenly without having ever shared the password to the cold storage locker for that exchange. This meant that the nearly $200 million in crypto currency assets were completely inaccessible and investors might never be able to see those funds again. Sharing your passwords and documenting them in a safe and secure manner is an important component of the estate planning process.     

Too many baby boomers have looked ahead to plan for their retirement but have neglected how long term care expenses could influence their ability to have a comfortable life after their working years.

A recent Banker’s Life study found that 74% of baby boomers felt confident in their ability to handle future health care costs, and yet the government estimates that the average cost of long-term care for a retiree in total is $138,000. Up to 80% of respondents in that same Banker’s Life study said they had no money set aside for the retirement health care needs.

For those who did have long term care savings earmarked, the median amount was just $40,000. While most people are familiar with the person who has needed long term care in retirement, and many know that they cannot count on family members or friends for around the clock care, this raises the question of whether or not baby boomers are overconfident.

The misplaced confidence that baby boomers have about their health care costs has led to many of them investing more in estate planning rather than long term care planning. Just one-third of survey respondents had less than a $1000 set aside for emergencies and half of the respondents had less than $5000 in their emergency fund.

The overwhelming confidence that baby boomers have in their ability to plan for the future could be misplaced and could expose them to serious risks in the future. Schedule a consultation with an estate planning and long term care planning lawyer to learn more about how strategies and tools can help to protect you.

The themes of making a last minute change to your will or changing a gift on your death bed might seem interesting or a great storyline for a movie, but these can cause many more families to end up in a state litigation which could potentially decimate the value of your overall estate you intended to pass on to heirs.

Incorporating plans at the last minute might be a necessity because your circumstances could have changed significantly in that period of time. However, if you fail to properly explain or carry out these estate planning changes, your loved ones could end up in court, battling over the validity of your will.

These problems won’t be ones that you’ll be around to deal with, but extended litigation could mean that your estate administrator ends up probating and dealing with many of challenges of these problems, while draining the value of your overall estate.

It’s a much better idea to schedule regular consultations with your estate planning attorney in which you can discuss potential issues and decide what is most appropriate for your individual situation. On an annual basis or as regular changes in your life occur, you can sit down with your estate planning lawyer and walk through what to anticipate and how to approach this process by making updates that will reduce the chances of estate planning litigation.

A major concern for parents of minor children is who will be appointed in the will to take care of the child if the parents pass away. If both of the parents play a relatively equal role in raising the child together, whether it is through the participation of both, or in the case of divorce or separation, individual time with each parent for the child. Your will is the best way to plan ahead for this potential situation.

The primary concern for both active parents is what happens if both of them were to pass away. In situations in which only one parent is active, it is equally important to ensure that an individual is named in the will so that the child is well cared for.

Major issues associated with who will raise the child and who is responsible for supervising property left to the child come up in the estate planning conversation and process you discuss with an attorney.

Make sure you think about the person who is the best choice to serve in this role, someone who is comfortable serving in the job, and whether or not there are any potential conflicts that could emerge in this or other situations.

Estate planning is often complicated and can heighten emotions and increase the potential for conflict if you have not chosen the person who is comfortable serving in this role because he or she does not understand all of the true implications of what is being asked of them.

If you recently moved to a new location from a different state, you need to make sure that your estate planning documents have been updated to show law controls in your new location.

An attorney can assist you with putting together an amendment to your living and revocable trust that applies to your new state’s law. Furthermore, your will might need to be updated to reflect applicable requirements in your new state. Since you already need to schedule a consultation with an experienced estate planning attorney to update your existing materials, consider putting together a power of attorney for financial matters and a power of attorney for medical matters that are in compliance with the new state’s law. Taking these simple steps is something that you shouldn’t avoid or put off after you’ve moved to a new state. Making these changes can avoid a lot of trouble, time or confusion in the future. Your documents should also be evaluated at this point in time to see whether or not they reflect your goals and desires. If you need to make any updates to executors or trustees because of your new location, consider speaking with your attorney about these options. Whoever is selected to serve in the role as an executor or a trustee should be familiar with the responsibilities required. Leaving behind an additional letter of instructions for anyone who will be serving in this role can give you some peace of mind that your individual instructions will be followed carefully. Schedule a time now to sit down with an estate planning lawyer to talk about necessary updates.      

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The cost of nursing home care can be catastrophic for someone who has saved ahead for their retirement. A long term care insurance policy could be one important component of saving ahead for the potential of long term care expenses. Being diagnosed with a physical or cognitive issue might mean that a family member or even you requires assistance from someone outside of the family.

Nobody wants to envision spending their golden years in a nursing home and yet more than 50% of Americans between the ages of 57 and 61 will be inside a nursing home at least once in their lifetime. That’s according to a 2017 study completed by the Rand Corporation. The cost of living in a nursing home, however, could decimate your retirement savings. For example, the median cost of a semi private room inside a nursing was over $7,400 per month in 2018. Long term care expenses could add up quickly, particularly in the event of a sudden emergency or severe problem with a loved one’s health. Scheduling a consultation with an estate planning attorney can help open your eyes to the various tools and strategies available to you in the process of planning for your retirement and your future.      

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Do you have a plan to protect yourself from the costly expenses of long term care? Far too many people avoid making a goal of protecting their assets from being decimated by long term care.

Most people might assume that long term care expenses only arise in a nursing home situation but a recent study found that nearly one-quarter of private long term care insurance claims started in assisted living in 2018 and nearly 27% ended there, according to the American Association for Long Term Care Insurance.

This reflects some of the most common trends for private people using long term care insurance. Many people start care in a specific setting, such as in their home, and these claims can end to an exhaustion of policy benefits for recovery or death.

In 2018, just over 72% of all long term care insurance claims ended in assisted living due to death, whereas 13.5% of claims ended due to benefits exhaustion and another 14% ended due to recovery. Many people have misconceptions about long term care insurance and might not be clear about how to plan ahead by incorporating this into their estate and retirement plan. Schedule a time to sit down with your experienced estate planning attorney to learn more.      

There are both practical and legal responsibilities linked to a trustee when the grantor passes away.

These include:

• Locating and reviewing all of the important papers of the deceased. These items should be found as soon as possible.
• Change the locks and take any steps necessary to close out and protect the house.
• Notify insurance carriers that the house will remain vacant.
• Verify that property insurance and auto-insurance policies are active such that various trust assets are insured against liability or loss.
• Get the certified copies of the death certificate from the village clerk, town clerk, or funeral director.
• Make a list of all the household goods that are included in the house to be distributed to beneficiaries. Photographing personal property can make this process easier.
• Create an exhaustive list of all of the assets and establish a baseline value for these assets.
• Pay any outstanding debts, bills or taxes.
• If the trust will generate more than $600 in total income from the date of the person passing away until all of the assets inside the trust are distributed, the trustee needs to obtain a tax identification number for the trust.
• File any claims for IRAs, life insurance and other assets that require individual forms.
• Create an accounting of all expenses paid and all assets at the date of the death.
• Keep beneficiaries notified about the status of the case.

If you are curious about how to serve in this role as a trustee, schedule a consultation with an experienced attorney.     

New Jersey may soon join small list of states, including Vermont and Oregon, that enable employees to take their retirement plans with them if they change jobs. These are known as portable IRAs.

Those employees who work for businesses that have 25 or more employees would automatically be enrolled in a retirement plan managed by a professional unless they chose to opt out if a proposed bill is accepted. In New Jersey this bill is S-2891, which would effectively create the secure choice for retirement program.

This would enable those workers who did not have an employer sponsored retirement plan to be able to save on their own for retirement. According to AARP research, over 1.7 million people living in New Jersey have no vehicle to save for retirement at their jobs.

Planning ahead for retirement is also important because you must consider the possibility of the cost of long term care. Health care costs for the elderly can be significant particularly if the person develops a disabling or incapacitating condition. Schedule a consultation with an estate planning attorney to learn more about how your retirement plan and your estate plan can work together.