Category: Estate Planning

The majority of people getting remarried have very little concept about the full legal impact of their new marriage. In fact, they might believe that waivers and other key documents like prenuptial agreements are only needed by wealthy couples. As a result, individuals may do very little planning when it comes to getting remarried. This can increase the conflict as well as potential chaos that happens when an individual passes away.

Although a remarriage doesn’t generate more spousal rights than a first marriage does, there is often an unstated perspective about spouses in second marriages having limited rights to the new spouse’s assets. One way to do this is by considering spousal elected share. This refers to legal claims that a surviving spouse has rights to a particular portion of the assets of a deceased spouse even if the deceased spouse disinherited that survivor.

Every state across the country except Georgia allows for a spousal share election to a surviving spouse or community property rights to a spouse. The spousal elective share will typically range from 30% to 50% of the augmented decedent spouse’s estate. It is often in addition to other spousal claims that the spouse could have against the decedent’s estate. Make sure you consult with an estate planning attorney any time you are considering remarriage as this can have significant implications for your estate.

From the perspective of wealth management, the most important aspect of dividing property in divorce is usually the treatment of your non-qualified and retirement assets. It is a big mistake for couples to divide traditional retirement assets down the middle, so you need to be careful about taking a more thoughtful approach that considers the realities of your life after divorce as well as potential instances that could impact the division of these assets such as one spouse passing away before the alternate payee begins to receive retirement benefits.

The majority of private sector income plans across the United States are designed to qualify for favorable tax treatment under compliance with a law known as ERISA or the Employment Retirement Income Security Act, in order to protect these very valuable tax benefits. Individuals who participate in qualified plans that fall under the ERISA umbrella are not eligible to take early withdrawals from their plan without facing penalties. There are exceptions, however, when plans are divided for the purposes of equitable division of marital property, alimony or child support. In this instance you would need to use a qualified domestic relations order. QDROs need to be put together even if you already have a divorce decree stipulating the division of retirement assets. Some of the key tips associated with the division of these assets are:

• Anticipating and minimizing tax liabilities from cash distributions.
• Determining how the pension plan will be divided.
• Dividing tax basis for contributions made after taxes for defined contribution plans.
• Prorating contributions to defined contribution plans via the divorce date regardless of the contribution timing.
• For non-qualified, non-divisible retirement plans including a formula to allocate future payment tax consequences.

Consulting with a knowledgeable attorney can help you understand the financial implications of dividing retirement plans in divorce. It is a good time to set up a meeting with your New Jersey estate planning attorney so that you can be prepared for your future. Post-divorce, there’s a good chance you need to update your forms and information.

When you pass away your property and possessions may go through a process known in New Jersey as probate. This means that your assets are settled and distributed in compliance with the terms of your will or in terms with the state’s discretion if you do not have a will.

There are certain assets that are exempted from probate and these refer to things that are jointly owned by you or your spouse such as retirement benefits, life insurance proceeds, jointly owned property or bank accounts. Most individuals are under the impression that having a will is enough to avoid probate but this is not actually the case.

The following five steps may be critical for helping you avoid the probate process in New Jersey. Speaking with an experienced estate planning attorney in New Jersey can help you determine which of these is most applicable to your situation.

• Put together a revocable living trust
• Convert your personal accounts and IRAs to pay-on-death accounts
• Establish instances of joint ownership such as tenancy by the entirety or joint tenancy
• Give your property away
• Use provisions and small estate laws to your advantage

Speaking with a knowledgeable New Jersey estate planning attorney can help you determine the steps that you should take to protect your estate and keep it out of the probate process.

When thinking about the future of your company and the value of business succession, it is extremely beneficial to be knowledgeable about how this process works and some of the common pitfalls associated with business succession planning. The more that you are prepared for what to expect, the easier it will be for you to identify the future course of your company and the individuals and planning documents that can help you accomplish your goals.

First of all, you need to know the true value of your business outside of your own personal attachment to it. This is why you should engage with an experienced valuator who can provide the proper information to you. Additionally, there are various times when it’s beneficial to understand the value of your business. There are major changes constantly happening in the regulatory competitive and economic landscape in which the majority of businesses exist today. So you need to be aware of the value of your business at numerous different times.

Finally, you need to be aware of potential value gaps. Once you have identified the value of your business with a third party valuator, there is likely a discrepancy between what you thought the company was worth and what you need the business to be worth in order to sell it or pass it on. Proper planning, however, can be critical for reducing these value gaps generated by an owner’s underestimation or overestimation of the business value. One example includes qualified plans and other investments that can help to reduce the value gap in your retirement plan generated by a business valuation that comes in lower than you expected.

Ready to put together your succession plan? Contact info@lawesq.net to get started today.

Three of the most important aspects of approaching an older age involves planning for incapacity, planning for long-term care, and planning for death. Each of these can be an important component of your overall estate planning strategy. It is imperative to plan for incapacity even if you don’t believe that you will be affected by this situation. Otherwise it can be an unfortunate surprise for your family members who may not be able to carry out all of your wishes. Having a plan in place and having the documents prepared adequately with the assistance of an attorney can be extremely beneficial. It is also a good idea to update your plans regularly.

Likewise, long-term care should be included carefully. There are multiple different options for paying for long-term care such as using a reverse mortgage, receiving benefits from Medicaid, accessing long-term care insurance benefits, liquidating assets, or receiving VA benefits. You should consult with an attorney if you are concerned about qualifying for Medicaid or whether you’re eligible for these other situations.

Finally, the last component of elder law estate planning involves preparing for your death. This means thinking carefully about what your wishes are and how you would like to pass property on. Consulting with an estate planning attorney can give you options as far as the best way to protect these assets and set them up to be given to beneficiaries in the future. There may be important planning strategies and tools that you are not aware of on your own but that an experienced estate planning attorney can help you identify.

 

One of the most popular asset protection tools available today is an LLC. LLCs that are managed properly are typically safe from the reaches of creditors of an individual member but there are exceptions to this rule that begins with the number of members, even if an LLC is the right strategy for a particular type of asset.

If a debtor is a member of the LLC at the time a creditor begins collection efforts against that member individually, any profits from the LLC that would otherwise be distributable to that debtor member are stuck inside the LLC. Even though a creditor can’t enjoy the profits of the LLC or LLC assets that are allocated to the member share of the organization, the member will be unable to enjoy them either since a creditor with a proper legal standing can intercept them before the member receives them from the LLC. This is why it is imperative to be knowledgeable about how LLCs work and whether it’s truly the right asset protection plan for you.

Knowledgeable implementation can make better use of such a tool and there are numerous asset protection tools available including insurance policies, annuities, IRAs, installment sales, limited partnerships and special trusts. Consult with a knowledgeable asset protection planning attorney to learn more

 

Many individuals who are approaching the process of estate planning, they have several key concerns as it relates to putting together the materials that they need. These are usually controlled in flexibility, privacy and the type of governance structure that seems to work best with family trusts. Modern trust structures such as family private trust companies, trust protector companies and directed trusts allow families to infuse their desires with general trust planning. 

The amount of gifting by the wealthy into trusts has increased dramatically since 1995. In 1995, gifting went from 12.5% to 40% today. Other important statistics to know are that 70% of families will usually name their family members, friends and business colleagues as trustees of their trust. As more advisors and families become familiar with the operation of these modern trusts, their popularity is only expected to grow.

One of the most popular structures is the private family trust company, primarily used by those with a great deal of wealth. These trust structures give important planning solutions to articulate the family’s desires. If you would like to learn more about whether a particular trust makes the most sense for your family, consult with a New Jersey estate planning attorney today.

When you’re organizing your documents for estate planning purposes, you can also run the risk of keeping too many things, just as you might otherwise run the risk of keeping too little. Your beneficiaries and representatives should be able to identify what is important without becoming overwhelmed in the process. Read on to learn more about what you truly need. 

Things to Hold Onto Indefinitely

• Marriage certificates
• Current version of your will
• Military discharge records
• Birth certificates
• Divorce papers
• Tax returns

Things to Keep for One Year

• Utility bills
• Paycheck stubs
• Bank statements
• Investment statements

 

Things to Toss Out

• ATM receipts
• Credit card statements after you have proof of payment
• Utility bills older than one year

Reducing your clutter and narrowing down what you keep to only the essentials can help you stay more organized and on top of your estate planning. Make sure you reach out to an experienced estate planning attorney in New Jersey when you need to put your materials together or discuss updating existing information. Having the insight of someone who can help you align your documents with your needs can be very beneficial.

 

 

Although your estate planning attorney can help you walk through the basics of your plans for the future, it’s also a good idea to be knowledgeable about how you can make the most of this first meeting. Read on to learn more about what you can do in advance to capitalize on this important planning opportunity. 

Put Together Your Assets/Liabilities List

It’s difficult to accomplish estate planning if you don’t know where you stand, so make the effort to clarify all of your assets as well as any debts.

Evaluate Personal Belongings 

For sentimental or other reasons, there may be things you want to leave behind to specific people. Knowing this in advance gives you the best chance to walk through what you want to leave behind to particular individuals.

Identify Potential Personal Representatives

You need to be able to count on someone else to help carry out your wishes once you pass away, and the selection of this person is an important step in your estate planning. It might be a good opportunity to have a discussion with this person before you have your estate planning meeting, which is why you should walk through your thought process long before you meeting with your estate planning attorney.

You likely need to identify someone to make medical decisions on your behalf as well as financial decisions. This could be the same person. Having a general idea before your meeting allows you to start the thought process early and then get the advice of an attorney.

Setting up an estate planning meeting as soon as possible is in your best interests, particularly if you have not broached any planning documents in the past. Contact our office today to learn more about how we can help you at info@lawesq.net.

A recent case involving ownership of an Ipad highlights how important it is to plan ahead comprehensively in terms of your estate. While many people think big picture and have beneficiaries on a life insurance policy or plans for assets like a house, it’s important to minimize all potential challenges for your spouse or other beneficiaries. 

A woman in Canada has learned this message after her husband passed away last August. Together, the couple owned an Apple computer and an Ipad. Even though the woman knows the Ipad unlock code, she does not have the password for the Apple ID. Thinking that the death certificate and will would be enough proved an unfortunate perception, since Apple refuses to give her access to the password.

According to the widow, after a lot of back and forth with the tech giant, someone told her she needed a court order. Although this is an extreme case, it does tell a cautionary tale. Having instructions for all your personal items can help to prevent your beneficiaries from headaches like this one. Set up a meeting with an experienced estate planning attorney to discuss all the items you should consider in the estate planning process so as to minimize frustration for your loved ones.

Setup Trusts

Transferring ownership by taking assets out of your individual control and putting them into a trust can be very beneficial. Living trust can be a very valuable tool for people who want to keep their affairs private as well. Speak with an estate planning attorney to learn more about your options here.

Divvy Up Your Belongings

Your legacy may also leave behind stuff whether it’s heirloom, jewelry, or an art collection. This tangible personal property should be left behind clearly if you want individuals to have particular things. You should not count on your family members to get along enough to sort this out on their own.

Plan Ahead For Your Memorial

Pre-paying your funeral plan and personalizing your sendoff are several things that have become more popular in recent years. You are not limited to traditional planning either. This is your opportunity to determine what you want and to put it in writing.

Choose Cremation or a Burial

It is likely that you already have a strong sense of what you want in your own end-of-life plans. Make sure that this is documented so that there is no fighting among your loved ones.

There are simply no excuses for avoiding the estate planning process, but knowing what steps you need to follow can be extremely helpful for getting over your concerns about conducting it. Read on to learn more about some of the most popular steps you should always take when thinking about your estate planning. 

Put Together a Will

Passing away without a will leaves it all up to the courts to determine what happens to your property. This can be confusing and the source of many delays for your loved ones, so it is better to put together a will sooner rather than later.

Factor in Life Insurance

Basic needs from your life insurance policy can be paid for if something were to happen to you. You can also plan ahead to help pay for a mortgage as well as special expenses like a college education.

Think About Your End of Life Documents

There are many different documents that you can use for the end of life planning process. These include advance directives, a durable power of attorney, and a release of information form. All or a combination of these forms can be helpful for you.

Avoid Probate

To the best extent that you can, it is always in your best interest to pass as much of your estate outside of probate is possible. Although the probate process is not extremely complicated it can be filled with many delays that tie up your estate and generate thousands of dollars in legal costs and other expenses. Few individuals want this for their beneficiary so it can be a good idea to avoid this by planning ahead from the start.

Individuals of any age could be subject to financial abuse but more it more often happens to elderly people. In order to avoid this impacting you down the road, there are several different things you can do. Begin by creating an inventory of all of your assets.

This includes bank accounts, brokerage accounts, investments and retirement accounts. You can do this on your own or with a financial professional but you simply want to be aware of the various financial accounts that you have.

This makes it easier for an investor to know what you need to keep track of and is also a solid record for a trusted person to take over if you become compromised or incapacitated. There are also opportunities to simplify your financial affair management. One example could be consolidating all of your brokerage accounts that are currently spread across multiple firms. Rolling over your 401(k) s from previous employers into your current account is another way to keep everything simple and all together. Using these tips can help prevent you from becoming a victim of financial abuse in the future and it also makes things easier for someone who has been appointed to help you manage your affairs.

Everyone knows that it is imperative to get the right amount of sleep. As more research is being done about how to prevent Alzheimer’s or minimize the symptoms associated with conditions like this, new research has looked at how a lack of deep sleep can cause problems as far as Alzheimer’s itself. According to the research published on NPR, the brain clears out toxins that have been connected to Alzheimer’s during the sleep process.

There is certainly a link between Alzheimer’s and sleep since the majority of individuals with Alzheimer’s have some kind of sleeping disorder. The same scientists who just completed this study are about to undertake a research process to learn more about the connection between Alzheimer’s disease and sleep problems in humans.

If your elderly loved one is suffering from Alzheimer’s and facing other challenges as a result of his or her aging process, you may be concerned about caregiving as well as the proper estate planning documents being in place. This is a great time to consult with an elder law and estate planning attorney to make sure that all of your bases are covered and that all critical issues have been considered by you and your loved one.

Hillary Clinton recently released a plan that would bring estate tax rates and exemptions back to 2009 levels. This would mean pushing down the maximum tax rate. Her plan would push the maximum tax rate to 45% from where it presently sits at 40%.

Experts believe that this plan is an attempt to get better traction with liberals who have been putting their support behind Bernie Sanders instead. Sanders has been an outspoken critic of the current estate tax plans and requirements, alleging that significant increases need to be made to the maximum rate and the exemption should be cut dramatically as well.

While Clinton’s proposal has the potential to bring $150 billion in revenue across ten years, it would only impact 4 out of every 100 families which is why it is a popular option for individuals in the center and on the left who are looking to avoid higher taxes on the middle class.

If you are one of the individuals who felt like the New Year came up far too quickly for you to accomplish your estate planning goals, you are not alone. The good news is that you can make some changes now in order to be prepared for when 2017 arrives. Getting ready now allows you to capitalize on the momentum for the new year and get these things accomplished before it’s 2017 already. 

Some of the most common ways that you can do this include giving to charity, making gifts to family, checking your beneficiaries, applying for social security, if applicable, setting up life insurance, and putting together a meeting to address powers of attorney, an updated will and your health care proxies. Looking at this initially can seem a little bit overwhelming especially if you feel like you were not able to accomplish your estate planning goals last year.

The good news is that setting up a meeting with an experienced estate planning attorney now gives you the remainder of 2016 to accomplish these goals. With someone who knows what they are doing, it should not take more than a couple of meetings to outline all of these details and to determine whether you need to update any other existing documents you may have related to your financial and estate planning. Consulting with a knowledgeable New Jersey estate planning attorney can also help you get all of your questions answered and assist you with clarifying some of your goals about estate planning in general.

S corporations are most popular as a tax vehicle because it allows for only one layer of tax instead of the double layer of tax usually imposed on a typical corporation. Rather than the S corporation paying tax, the S corporation’s taxable income passes through to the shareholders and is reported on those shareholders’ personal tax returns.

The corporation generally is able to distribute a company in profits to the shareholders free of federal taxes. To avoid corporations attempting to convert over to an S corporation and then sell their assets off, the internal revenue code mandates a 10 year built-in gains tax on S corporations. If the S corporation sells assets within this period, the corporate level tax normal rate is paid.

In early January, legislation was introduced to officially reduce this 10-year period down to 5 years, retroactive to tax year starting on January 1, 2015. For S corporations, this is great news and highlights an important time to return to your planning attorney to discuss your options.             

The Federal Reserve’s most recent decision to increase interest rates does carry implications for individuals who are considered affluent. This mostly has to do with their estate planning. Interest rates can definitely impact strategies in place for minimizing estate taxes and maximizing the benefits associated with income tax bricks.

Guarantor retained annuity trusts and intra family loans are two typical strategies that a family may want to consider implementing before interest rates go any higher. This is because both of these strategies have benefits when investment returns exceed what’s known as a hurdle interest rate based on the rates of the market.

A qualified personal residence trust, in addition, in order to pass on a vacation home or primary resident to heirs is also worth keeping in mind when interest rates go higher. The present value of the asset is lower in a higher interest rate environment and therefore the potentially taxable gift value is also lower. Make sure to consult with your estate planning attorney to learn more about what you need to know about rising interest rates and what you can do now to minimize the impacts of taxes in the long run.

The first step in any plan to protect your assets should involve obtaining the right insurance. Many self-employed individuals, for example, do not realize that they need specific insurance in order to protect their assets. One such example is a physician.

While most physicians understand that medical malpractice insurance is something they must have, other professionals should also consider the benefit of errors and omissions insurance. Financial advisors and lawyers are just a few of groups who should consider the benefits of using insurance as the cornerstone of their asset protection plan. The errors and omissions insurance can be helpful in the event that someone else sues you as a result of losses.

Even if the ultimate loss is not your fault, the former client may be looking for someone to take the blame and therefore you could end up in the hot seat. An umbrella insurance policy may also be a crucial component of this essential part of your asset protection plan. Many wealthy and successful individuals are more likely to be sued because other individuals believe that you have the assets necessary to support a lawsuit. A liability policy can help to form the first shield of protection for your assets when someone is hurt on your property or when someone else tries to hold you liable for damage or injury to property.

Our technological world now adds our digital legacies and a key is to go through all the questions that will, in their entirety, result in solid, satisfying panning for end of life. There are many online entities that can help but their function is a preliminary one that should be supplemented by an estate planning attorney.

A website might point you in the right direction and help you understand the various issues you need to consider in your estate planning but only a knowledgeable attorney can help you put together a comprehensive plan.

Areas of concern in estate planning are identifying important documents, what digital libraries you have present, what business data should be passed on, end of life instructions including funeral planning, and a complete list of physical assets. Make sure you consult with a knowledgeable attorney sooner rather than later to get your questions answered.