Category: Estate Planning

If you die without a will, your estate will pass through probate. For the most part, your assets will go to your closest relatives under the intestate succession laws of your state. It’s also important that you know which assets don’t go through your will and are not affected by intestate succession laws mentioned above. 

Some examples of property that doesn’t go through your will includes:

• Life insurance policy proceeds
• IRA funds
• Property transferred into a living trust
• Securities in a transfer-on-death account
• Property owned by a joint tenancy
• Bank accounts considered “payable-on-death”

Avoiding probate is a good idea if you’d like to save your heirs from the confusion that can occur after you have passed. Putting together a will allows for you to stipulate clear outlines about how you want your estate handled.

Contact an estate planning professional to learn more about how you plan ahead. Reach out to us for an initial consultation at info@lawesq.net.

The American Bar Association reports that only 30 percent of family businesses successfully pass on to the second generation- were you counting on your loved ones picking up the business baton and running with it? The reality is that there are many challenges faced in the process of trying to figure out business succession. The best way to prepare for the future is to set in place a plan that either outlines the transition or makes clear the processes by which that decision emerges. 

If you’re considering selling, you need to think about how that might look for you and your company. Did you know that 75 percent of individuals who sold felt unhappy about it a year later? The root causes of this unhappiness include retirement plans falling short of expectations, the business legacy not being carried out, or disappointment over employees who lost their jobs in the transition. Make sure you carefully consider the return on investment from selling the company versus passing it on to someone else.

One of the most important things you can do now is to prepare your company to constantly be improving value. Think about the long term, and what structures would need to be in place for your company to succeed long after you’re gone. Consult with a business succession planning professional to get more details about how you can accomplish your goals.

When you pass away without a will, the court takes over the distribution of your estate. During this process, the court determines the most appropriate way to distribute your assets, but allowing this to happen does present some dangers. 

The first challenge has to do with time. Average settlement lengths for probate are between nine months to two years, which may not be what you had hoped for or in the best interests of your loved ones. Any emergencies or time-sensitive issues your heirs may face could be crippling while your estate is being sorted out.

If you don’t have a will, the costs for probate can be extensive: they can end up being up to 10 percent of the total estate value.

To add to the challenges, there’s a big lack of privacy when your estate goes through the probate process. There are many estate planning tools that, when used properly, can provide you some clarity about how your assets will be handled and give privacy to your heirs.

Thankfully, with a little careful planning you can make the process easier on your heirs. Contact our offices today for a consultation designed to address your estate planning needs at info@lawesq.net.

Make sure you avoid the most common estate planning mistakes both to give you peace of mind and to increase the chances that your loved ones have minimal challenges when you pass away. 

No Estate Plan

Too many people avoid putting together a plan at all, which puts their estate at risk of being determined by the courts. You need to consider more than just your will, too- what about the complicated decisions surrounding your end of life? Don’t force your family to figure that out- instead put your wishes in writing.

Failing to Gift Assets Before Death

One of the best ways to reduce the size of your taxable estate is to give assets before you pass away. As an added bonus, it’s also your chance to see if your beneficiaries are capable of handling larger gifts. Talk to your estate planning specialist to determine what you can do during your life.

Failing to Correct Beneficiary Designations

Small mistakes can cause big problems down the road if you’re not clear about your beneficiary designations. This can change, especially if the main beneficiary passes away before you do or you get divorced. Make sure your papers are in line with your life changes.

Contact us for an appointment at info@lawesq.net.

Follow the 8 steps below to increase the chances that your assets are protected. In a time when just one blow to your assets could wipe them out or severely set back your own retirement, it’s simply prudent to plan ahead and guard yourself against major risks. 

1. Select the appropriate business entity, like an LLC
2. Evaluate your corporate veil (if you have set up an entity, you need to be clear about recordkeeping and have those materials reviewed by a specialist at least once a year)
3. Keep track of all proper procedures and contracts (foregoing this could expose you to serious liabilities)
4. Keep business insurance at all times
5. Get an umbrella insurance policy, too, but read the fine print to determine what it will and won’t cover
6. Put some assets into a spouse’s name, if you can
7. Evaluate a possible homestead exemption: Exceptions related to your personal residence can be critically important when considering your assets as a whole.
8. Determine whether your state allows “tenancy by the entirety”. This means that you could have your personal residence titles in a particular way so that if one spouse is sued, the property can’t be attached by a lawsuit. To determine whether this applies, and what other options you have for asset protection, contact an experienced attorney today at info@lawesq.net.

Succession planning is one of the most important steps you can take for your business, but all too often it gets pushed off or glossed over entirely. Taking the time to really consider your options, however, can help to lay the groundwork for a better transition in the future. Procrastinating could lead to a bad merger or closure of the firm entirely, so there’s a lot at stake in putting together your plan. 

Over 61% of current business partners are 50 or older, and over half of all firms in the US today expect one or more partners to retire within a 5 year period. This alone highlights why special succession planning is critical. It’s a myth that young, outside candidate will appear out of nowhere, but yet this belief is what leads so many business owners to put the hunt for future talent on hold.

There’s another myth that 3-5 years is too far in advance to plan. If you run any kind of business where you interact with a client annually, this is a bad idea. This leaves only 3-5 possible visits for a successful handoff to your new team. The new team should have better practice than this, so plan ahead.

There’s a final myth that mergers always cause problems for clients, but this is not true so long as you prepare your clients for the changes ahead and follow it up with a clear letter about what they can expect. More questions about succession planning? Contact us at info@lawesq.net.

Even though a myriad of celebrity stories point out the challenges associated with failing to create a solid estate plan, it seems like taking this action just isn’t on the radar for most people. Even though 61 percent of people aged 55 and older had an estate plan in 1998, that number has dropped to 54 percent. 

The reality is that you’re never too young to utilize planning. When control over beneficiaries is handed to the court, probate costs might be incurred upwards of $10,000. In comparison, the cost of protection is quite low, especially if you only need basic documents like a will and a power of attorney.

The key to your estate planning completion-and regular revision- is to create a comprehensive list of assets with beneficiaries named. At least once every five years (and hopefully sooner), you need to review these items. If there are life changing events (such as a marriage or divorce) or if the law changes, you need to get your documents reviewed even sooner.

There’s never been a better time to avoid the minefield known as probate by giving some layer of privacy to your estate plan. You can reduce the frustration experienced by your heirs simply by considering a few options that can pull your estate out of probate. Consider using options like trusts to provide control and clarity over how you want your assets passed along.

Questions about the planning process? Contact us at info@lawesq.net.

 

If you fall into the baby boomer generation or you’re caring for an aging parent who is, you’re part of a nationwide shift that will alter the focus from retirement planning to end of life care in the next few decades. As baby boomers transition into retirement, their initial concerns tend to be about the best way to maximize retirement income. Over time, however, the concept of long-term care planning becomes critically important. 

Currently, 43 million Americans fall into this portion of the baby boomer generation that is kept busy with retirement planning decisions. Although these are certainly worthwhile, it’s important not to skip over considerations related to long-term care, either.

As this generation grows older, though, the focus will be less about how to preserve these assets to retirement and more about passing them on to heirs or even reducing them in order to qualify for Medicaid. By the year 2050, the number of Americans needing long-term care is expected to increase from 12 million to 27 million.

Planning for long term care doesn’t require that you wait until you’re older, however. Too many Americans face the challenges of not having planned ahead and having to pay out of pocket for critical long-term care services. Carefully considering your options now during early retirement years makes it easier to confront the long-term care landscape. If you need help planning ahead for long-term care, contact our office today for more details at info@lawesq.net.

 

In order to put the proper elements in place for your succession planning, you should be in tune with critical metrics for the business. There are several different factors that you should explore with regard to your succession planning. If you’re an owner of a business, here’s the steps to take before you create and implement a succession plan. Make sure you are knowledgeable about these metrics first, as it can help determine the direction of your planning.  

1. How many positions have been filled by succession candidates already? If there are open positions, consider filling them by highest priority. A critical position can prove challenging if there’s no person tapped to fill it in the future.

2. Are there enough candidates in the hiring pipeline to fill additional positions? If not, this is a clue you need to extend your reach.

3. What stage of implementation are you at in the pipeline with regard to succession planning overall? It’s common to get stuck after the initial creation of such a massive plan, so it’s worth it to do a check in about what you’ve been able to accomplish so far.

4. What are the metrics for the departments or jobs managed by succession candidates? If there is an indication of poor performance or a learning curve, use this opportunity to train those individuals while you are still playing an active role in the business.

5. Are you holding managers accountable for succession metrics?  Make sure you have had the conversation with key managers about their role in adding talent to the pipeline or not. They need to be clear about their role in the succession planning process.

Need more help? Contact us at info@law.esq.net.

Even though it might seem overwhelming and confusing, there are six key steps you can take to have a solid estate plan in place before you exit the U.S. Here’s what to do when you’re planning to leave. 

Review Your Estate Plan in Full

You’ll become subject to local laws about estates when you establish residency somewhere new, but you’ll still fall under the guidance of U.S. tax laws.

Understand Residence and Domicile Rules

Just because a document works in one country doesn’t guarantee the same in your new country. Make sure you get insight from your estate planning attorney when it comes to trusts.

Be Aware of Double Taxes

Estate taxes could be claimed by multiple countries if you have connections to more than one nation. You need to get specialized tax attorney help in this regard to determine if there’s another option.

Think Twice About Foreign Life Insurance

It can be difficult, if not impossible, to get life insurance from a U.S.-based company while you’re living in another country. Your foreign policy also might not comply with U.S. rules, so read all of the fine print.

Determine Where “Common Law” Versus “Forced Heirship” Applies

In the U.S. and the U.K., you’ve got common law principles to help you determine where your estate assets will go, but other countries might require you to distribute them in a different way. Get professional advice to determine what situation applies to you. Get help planning ahead at info@lawesq.net.

Have you ever heard the phrase “the best offense is a good defense”? 

It doesn’t matter how intelligent you are or how in tune you are with business, this often gets overlooked when it comes to protecting your wealth. Consulting with an estate planning specialist can help you identify the best way to protect your assets from the following threats:

• Employment discrimination
• Sexual harassment accusations
• Trademark infringement lawsuits
• Breach of contract allegations
• Malpractice claims
• Faulty products
• Liability claims like slip and fall accidents
• Workers’ compensation claims
• Vehicle accidents related to work
• Personal vehicle accidents
• Car accident
• Debt
• Medical issues
• …. The list goes on

All of these pose major challenges to the modern individual and business owner. Unfortunately, the litigious environment we live in presents a lot of risks to anyone, and as your wealth grows, so too should be your efforts to protect it. Get the details about the tools and resources available to you in this regard by contacting an experienced asset protection planning attorney. Get our advice at info@lawesq.net.

A common misconception holds that living trusts are only for the very rich. The belief may stem from history; in the 16th century Britain kings often controlled their lords’ power by seizing and distributing their lands as they died; the structure of a trust allowed circumvention by deeding property to the church, with the understanding it would later revert to the proper heirs. 

By measure of the 2010 Survey Of Consumer Finances only 1.3% of Americans have received monies through a trust.

Yet, the median amount is a moderate $285,000, and with as little as $100,000 the benefits can be significant:

1. The lengthy and slow probate process can subject funds to fees and charges amounting to between 2% and 4% of total estate value.
2. A trust avoids probate as it is private; as a distinct separate legal entity, distributions occur without court involvement.
3. Appointment of a trustee ensures that future decisions can be placed in effect long after the trust is created.
4. A trust fully utilizes each person’s Unified Credit or the State estate tax exemption. Mandated by Congress, it will shelter, per person, just over $5 million or $675k(in NJ), whichever amount is preferable. But, the trust should be structured with “A-B Provisions”, the death of one spouse separates the trust into two parts thus enabling the shelter from estate tax.

It is important to note that as total funds increase beyond that amount, estate taxes of up to 35% take effect. Living trusts are easy to set up, low-maintenance, and keep finances out of the public eye even after death. Consultation with an attorney specializing in estate planning can insure that your assets are protected; start a conversation with us today at info@lawesq.net.

After years of education and hard work, physicians might feel as if they have been exposed to major risk as their wealth finally starts to grow. Physicians have unique needs and should always consult with an estate planning specialist who is familiar with these risks. 

There are several steps that any physician might consider in the process of asset protection. These include retitling assets into another person’s name (although this does not always provide the highest layer of protection), establishing offshore trusts, creating partnerships or companies, investing in qualified retirement plans, and taking advantage of any applicable homestead laws.

The wealth of a physician can grow significantly over time, so it should always be monitored with a team of professionals including a financial advisor and an estate planning/tax attorney. Major life changes like marriage and divorce also warrant additional opportunities to work with this team of specialists to craft a plan.

Physicians are exposed to threats through medical malpractice lawsuits, for sure, but the risks go even deeper than that. Partnerships and divorce pose a major threat to a physician’s wealth without special planning. Consult an asset protection attorney today to learn more. Contact our office at info@lawesq.net.

There are many changes happening in the world on a daily basis, not the least of which has to do with technology. Laws and social issues also highlight the importance of staying on top of your planning. For these reasons, estate planning requires flexibility and regular review. 

There are several primary reasons why flexibility has such high value in the estate planning realm. Standard irrevocable trusts could be modified to designate an individual empowered to make changes in the future, for example. Moving from old to new trust regulations is one more example of making the most of changing times but still staying aware of possible risks.

Tools like creating a family limited partnership, power of attorney, and limited liability companies can all be valuable in this process of staying flexible. This requires individuals to be on top of their estate planning and ask questions at least on an annual basis about the most relevant changes applicable to their situation. Contact our offices at info@lawesq.net so you can incorporate changes in your life into your estate plan.

When Congress finally passed the American Taxpayer Relief Act at the beginning of 2013, everyone was hopeful that the years of uncertainty about estate tax numbers was finally coming to an end. If President Obama gets his way, though, it’s likely that estate tax reform isn’t over yet. GRATs could be a big target here, since they allow someone to put funds into an irrevocable trust and still keep the right to get distributions back over the course of term. 

The grantor gets an annual annuity for a fixed period while beneficiaries get the rest at the end of the term. The current administration is hoping for a long 10 year term as well as some gift tax valuation on transferred funds. What this does, if moved forward, is increase the “mortality risk” of a GRAT. If the grantor passes away during the term of the trust, the trust assets could be included in the estate for the purposes of taxes. If these changes are made, wealthier individuals might not be able to use any short-term GRATs to reduce that risk.

As always, working with an estate planning attorney is the best way to stay informed of any risks and changes coming down the pike. Staying knowledgeable is your best course of action in minimizing risks. Contact us at info@lawesq.net.

Whether you’re an individual setting up your plans for your loved ones to receive assets after you pass away or a business owner trying to work through the basics of succession planning, this process goes far beyond just creating documents. 

One of the most common steps skipped in this process has to do with what happens after you have your valid documents. If your loved ones can’t find them after you pass away, this could generate a lot of confusion or even disagreements between family members who are concerned about the most recent and valid versions of your materials.

Working with an estate planning attorney is a good first step, but even if you follow all the planning by the book, you leave a lot of room for error if you don’t have the conversation with family members about your intentions and about where the relevant documents are located.

This is more important than ever as a result of digital assets, because while you might provide access to information for accounts linked to a bank, what about your social media accounts? Paypal? Other online accounting information? All of these should be carefully considered as part of your plan if you rely on them for storing any kind of asset, even if it may just be personal information, like photos. Make sure you’ve talked through all your accounts and options with an estate planning attorney. Our office is here for you at info@lawesq.net.

https://www.youtube.com/watch?v=2iOFLzuTnRE&index=1&list=PLB62qn_iXR3vt6TgAOfAE6aXpQyrhHtdn

Hear the Attorneys of the Law Firm of Shah & Associates, P.C. Describe the Highlights of this Week’s Blog Posts. For the full post, visit: https://lawesq.net/blog/

New Study Identifies Four Possible Tools to Stave Off Mental Decline
With more than 47.5 million individuals affected by dementia worldwide and 7.7 million new cases annually, research is targeting ways to prevent or limit the impacts of the disease. Researchers in Finland believe they have identified four ways to stave off the mental decline that is becoming more common with older age. Click here for more, https://lawesq.net/blog/2015/04/new-study-identifies-four-possible-tools-to-stave-off-mental-decline/

Estate Planning Tips: Don’t Forget Incapacity
Most people are familiar with the idea of using estate planning as a way of determining what happens after they pass away, but there are also benefits to planning ahead for possible incapacity. Thinking about this could be critical for setting aside instructions for personal care and determining who can help manage your assets in the event that you become incapacitated. Click here for more, https://lawesq.net/blog/2015/04/estate-planning-tips-dont-forget-incapacity/

Estate Planning Guidelines for Homeowners
When you own a home, you open up the possibility for multiple heirs to argue over the property in the future. This could happen because one heir wants to keep the property to himself or herself. This could necessitate a new mortgage loan or a cash-out refinance. Click here for more, https://lawesq.net/blog/2015/04/estate-planning-guidelines-for-homeowners/

The Five Key Estate Planning Documents for the Single Individual
Think you don’t need estate planning because you’re not married or have no children? It’s a mistake to skip over this vital process, because every person should evaluate five possible tools that can help plan for the years ahead. These five documents are just the basics and it’s recommended that you meet with an estate planning attorney to determine if any additional documents would benefit you. Click here for more, https://lawesq.net/blog/2015/04/the-five-key-estate-planning-documents-for-the-single-individual/

What Are the Key Benefits of a Revocable Trust?
When it comes to options for planning your estate, the revocable trust tends to be more flexible than other tools. You can change it over the course of your life or even destroy it if you want, which appeals to people who are not sure whether they want their wishes to be permanent. If you have an alternative goal of protecting assets as well, you should contact an estate planning attorney for other choices to do this, as a revocable trust is likely not the kind of solution you need for that goal. Click here to know more, https://lawesq.net/blog/2015/05/what-are-the-key-benefits-of-a-revocable-trust/

Visit us at www.LawEsq.net

Call us to request a copy of the Newsletter: 732-521-9455
Like us on Facebook Page: https://www.facebook.com/TrustsEstatesBusinessLaw

Standard estate planning advice goes that you should at least have a Will for estate planning purposes, but it’s imperative that you understand the importance of updating such a document, too. All too often, we encounter clients who have created a Will but done so 10 or 20 years ago. 

The reason that this is an outdated document is because your life has probably changed significantly over the course of that time, meaning that plans you had a decade ago are no longer relevant for your future. It’s also worth mentioning that tax laws have changed over that time, too. Even in the event that your document is still valid, this doesn’t guarantee that your plans would be carried out the way you intended.

What follows are four key dates and an issue that warrants an updated version.  If your Will was created prior to these dates, it’s time for a review:

• April 14, 2003: Compliance dates for HIPAA
• January 1, 2005: This is critical if you live in a state that has an individual state estate/inheritance tax
• December 17, 2010: This is the official enactment date for the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. This increased the federal estate tax exclusion.
• January 2, 2013: This date matters if you’re part of a married couple with a taxable combined estate worth more than $5.43 million.

To find out the details and whether you need an update, contact our office today. We can help determine if your will needs an update. Contact us at info@lawesq.net.

A multi-generational IRA is one that allows an individual’s retirement plan to be “stretched” to first-generation beneficiaries as well as subsequent heirs. This is why it has gotten a nickname as the “stretch IRA”. There are some situations when it makes good sense to offer these assets to your loved ones, especially if you don’t anticipate needing access to those funds during your own retirement. 

A beneficiary younger than you will be able to stretch out of the life of the IRA by taking required minimum distributions over the course of his or her life. This allows money to stay inside the IRA with the potential for continued growth that reaps the benefits of tax deferment. When done properly, this is a great tool for growing wealth while deferring taxes.

This is often a good fit for people who have a qualified plan and for those who don’t believe they will need to access those funds for their own retirement. In a standard retirement planning scenario, the money could be depleted with estate taxes or accelerated income, so this can be a viable alternative when you don’t necessarily need access to the funds but want to pass on some benefits to future generations.

A multigenerational IRA is just one planning option for passing on assets to your heirs. Consult an experienced estate planning attorney for more opportunities. Call us at 732-521-9455.