Under the new laws, income tax rates are higher for many people. It is therefore important to incorporate income tax needs into an estate plan to see if there is a way to reduce income taxes. Many people previously used trusts to reduce estate tax. However, with higher income taxes, it is now possible that the benefits from a trust are reduced. People who created trusts prior to 2012 as part of an estate plan may benefit from reviewing the plans to determine if the current trust will still meet their objectives. It may also be important to review any change to state taxes and how they will impact an existing estate plan.
]]> People who purchased life insurance to cover estate taxes may find less of a need for the policy. However, life insurance may now be more a more desirable investment than it was previously. Higher income taxes may give people more of an incentive to make charitable donations during life, rather than as part of a will. The higher exemptions on estate taxes also makes it less urgent for people to give away their assets during life.Many people could benefit from periodically reviewing an estate plan to ensure that it still meets their needs as tax laws change. An estate law attorney may be able to assist by reviewing a person's assets and objectives to determine the right course of action and by helping to adjust estate plans as necessary.
Source: Investing Daily, "How estate planning is changing", Bob Carlson, June 07, 2013
]]>If parents are using a 529 plan, they are at risk of having an unknown person manage their child's college savings if they die. Any college savings plan must have a successor or a responsible adult to manage the plan if the parents are not able to do so. Parents should ask their 529 plan manager for a form to name a primary and secondary successor. Successors have the same rights as the traditional account owner if the owner passes away.
]]> Most parents choose a family member such as their own parent or a brother or sister to manage college funds as successors, although anyone can be named. However, parents should be sure that the person so named is capable and willing to take on that responsibility. Grandparents who open college accounts for grandchildren can name the children's parents or some other person as successor.Planning for important financial distributions after death is a task that most people avoid, but it is very important to do if heirs and beneficiaries are to avoid significant problems. An estate planning attorney may be able to help those who want to set up a strong estate plan that protects everyone's financial interests and avoids undue taxation and other issues.
Source: US News, "Make College Savings Accounts Part of Estate Planning", Reyna Gobel, May 31, 2013
]]>One of those tools useful for nearly everyone is power of attorney. There are several types, including durable power of attorney and springing power of attorney, which is only activated in specific circumstances. Choosing the best one for an individual's situation is not an easy task. It may rely on the pool of potential candidates for the position and an understanding of any assets left in the will.
]]> Asset preservation planning is also an important step for reasons besides the estate tax. Medical costs can take up a sizable chunk of assets, which the individual may have planned to leave for beneficiaries. The diligent selection of insurance plans may reduce medical costs significantly. The right choice of power of attorney may add a layer of personal security to elder planning efforts. Certain types of trusts may also be used to increase eligibility for subsidized insurance.The establishment of an estate plan requires someone with more than a passing knowledge of legal options. Some types of trusts and wills are only available in specific states; and it may be difficult for a non-expert to become familiar with the relative merits of state-specific estate planning tools and other options. An attorney with experience in elder law may be able to offer expert advice for the preservation of both assets and personal security.
Source: Life Health Pro, "5 ways to help middle-class clients with estate planning", Tom Nawrocki, May 23, 2013
]]>New Jersey is actually one of a handful of states that has both an inheritance and estate tax in place, so this definitely creates interesting challenges for the testator and his or her beneficiaries. In many cases, federal estate taxes aren't a major concern, since estates worth less than $5.25 million aren't taxes. Yet New Jersey has the lowest state-level estate tax bar -- sitting at $675,000.
]]> On a very basic level, individuals looking to form an estate plan should understand the potential tax implications. By knowing this, there will be fewer surprises when the estate is administered. At the same time, however, it is important to note that individuals may be able to minimize the tax burden through planning.One tax planning method includes setting up trusts to deliver assets to beneficiaries without the same kind of tax demands. For example, a person could establish a credit shelter trust. This allows a person to designate beneficiaries, but pass along control to their spouse, which will allow for a larger estate-tax exemption down the road.
The important thing to remember here is that tax planning isn't just for people with very large estates. Considering New Jersey's tax laws, anyone could stand to benefit from planning ahead for whatever the future might bring.
Source: The Wall Street Journal, "Focus Shifts to State Estate-Tax Planning," Arlen Dale, May 16, 2013
]]>On average it takes 1,040 days -- just under three years -- to process VA benefit appeals. For many veterans with severe medical conditions, they simply cannot wait this long. In fact, an investigation determined that 2,936 apealed cases were dropped because the veteran or their surviving spouse passed away.
]]> In 1961, a New Jersey woman's husband committed suicide as the result of post-traumatic stress disorder developed during a plane crash in World War II. As many veterans returned from the Middle East with similar issues over the last decade, the woman decided she would fight for her husband by filing a claim with the VA. The veteran's widow spent seven years in the appeal process, which ultimately came to a close with her death in 2012.Unfortunately, this woman's experience isn't unique. Navigating claims and appeals for veterans benefits can be difficult. In addition to benefits for combat-related injuries and mental conditions, veterans and surviving spouses can seek coverage for long-term care in assisted living facilities.
No matter the reason someone is filing for or appealing veterans benefits, the process can be complicated by denials, delays or a simple lack of knowledge about available options. This is why it may be valuable to consult with an attorney who can help veterans or their surviving spouses determine what benefits are available to them, which may be especially helpful as they approach older age.
Source: Trib Live, "Veterans or families seeking benefits from VA are dying for a decision, Trib finds," Carl Prine, May 11, 2013
]]>As this effort progresses, many might wonder how changes to the program will impact New Jersey resident's efforts to begin the Medicaid planning process.
]]> The expansion of the program will provide health care coverage to a much larger number of New Jersey residents, with estimates ranging between 104,000 and 234,000 new enrollees. In addition, it would end up saving the state many millions of dollars over the course of the year.By expanding the Medicaid program, which is administered by the state, people who are at or near the poverty line will now have medical coverage, which is something that's important to people who are near or past the age of retirement. Medicaid provides funds to people who can't afford nursing home care, which is something that is very important many people as they age.
When a person's assets dwindle down to a few thousand dollars, Medicaid funding will kick in. Unfortunately, however, the program doesn't necessarily provide enough funding to provide the kind of quality care that some people expect. The expansion of the Medicaid program will not necessarily provide higher-quality nursing home care; rather, it allows more people to join the program.
Without a plan in place, individuals and their loved ones could become caught off guard by the costs associated with nursing home care and what options exist for coverga. Yet legal options, such as Medicaid planning, are available to help make sure people have the funds available when they are needed.
Source: NJBIZ.com, "Medicaid expansion clears committee," Jared Kaltwasser, May 9, 2013
]]>According to researchers from the AP-NORC Center for Public Affairs, only one-third of people over the age of 40 have done any sort of no long-term care planning. This is despite the fact that many of the same people have provided care to aging loved ones, so they have insight into what their own needs might be in the future.
]]> When a person suddenly needs long-term care with no plan in place, not only will their loved ones be uncertain what to do, but there also may not have adequate funds set aside to provide adequate care. This is particularly concerning, considering that Medicare doesn't pay for many types of long-term care. As such, family members may be left to make critical decisions on their own.Even though a large share of people would rather not think about what comes along with aging (which was also gleaned from the aforementioned study), the time may come when nursing home or in-home care is necessary. By taking time to speak with a trustworthy attorney and develop a plan, a person can have the peace of mind that arrangements are made for the future. This way, their loved ones won't be left with a tremendous -- and stressful -- burden.
Source: New Jersey Herald, "Long-term care in aging US: Not for me, poll says," Lauran Neergaard and Jenniefer Agiesta, April 24, 2013
]]>The importance of forming a well-though-out estate plan is evident in an emerging trend among younger generations. As more and more baby boomers (and their children) inherit belongings from relatives, the importance of the family heirlooms is on the decline. Boomers tend to have enough of their own things and people in their 20s tend to have different preferences than older generations. As such, many of the physical belongings being included in wills by members of the Depression generation are simply sold off.
]]> Being aware of this trend may be a signal that it's important for people making an estate plan to consider exactly who will be receiving assets and tailor the terms of a will to match those preferences. For example, younger generations may prefer financial assets over physical belongings, so it may be most effective to create a trust. Unfortunately, trusts are complicated legal arrangements and can be adversely affected by tax rules if they are improperly established, which is why it's often helpful to turn to a trusted attorney in this kind of situation.More than anything else, the aforementioned trends show that a boilerplate will probably won't suit the unique needs of every family. However, if a will and associated trusts consider beneficiaries' wishes and account for the uncertainties of life, then testators can have greater peace of mind that their loved ones will truly benefit from an estate plan.
Source: Star Tribune, "No longer saved for generations, family heirlooms are being shed," Kim Palmer, April 22, 2013
Our firm has helped East Hanover, New Jersey, residents sort through the complex details of wills and trusts. To find out more, please see our trust planning page.
Of course, in the wake of the April 15 income tax filing deadline, taxes are on the mind of many people. The reality is, however, that tax codes can change at any time, so it's important to think about developing better tax strategies throughout the calendar year. By consulting with an experienced attorney, individuals can develop a plan that will suit his or her needs now and many years down the road.
]]> Although it may not be easy to think about or imagine, it's helpful to make considerations for the unexpected things in life. For example, a person may establish retirement funds with a tax strategy aimed at providing financial security for a specific number of years. However, if a person lives longer than the expected number of years, then they may wind-up in a tight financial situation. As such, it's important to develop a smart and flexible long-term plan that will help you and your loved ones work through life's curveballs.One measure worth consideration is creating a trust to help avoid the burden posed by estate taxes. This can directly affect a person's spouse and other families that stand to benefit from an estate. The laws surrounding trusts can be somewhat complicated, but if properly established, they can be a smart financial planning tool.
Source: Marketwatch, "Death & taxes: Planning for the unavoidable," Joe Lucey, April 18, 2013
To find out more about the topics discussed in this post, please visit our New Jersey trust planning page.
The man has tried to provide proper documentation and call VA offices regularly, but has had no luck. He's frustrated that things would change so dramatically over the course of a couple years. Every year the man has been required to re-apply for VA benefits, but hasn't had any pushback up until a couple years ago.
]]> This particular allowance may not seem like a huge financial benefit -- it's $700 to $800 annually -- but for a retired person on a fixed income, it can make a big difference. Now the man is working to contact VA officials to demonstrate that he was indeed injured in combat, something that seemed to be clear to benefit administrators for four decades.Unfortunately, this New Jersey man's experience isn't unique. Whether a person is looking for a regular allowance for their injury or looking to go into long-term care, dealing with veterans benefits can be a complicated matter. This is why a number people find it helpful to consult with an attorney who understands what needs to be done in order to obtain specific benefits in a timely manner.
Furthermore, as veterans look to the future, it may be useful to create a plan to deal with future medical costs, which can be very costly. Once they are administered, VA benefits are helpful, but it may be helpful to develop a strategy to make sure they are delivered according to an individual's unique needs.
Source: The Star-Ledger, "Bamboozled: VA delays benefit to decorated Vietnam vet, saying battlefield limb amputation isn't 'combat-related'," Karin Price Mueller, April 8, 2013
Our firm has helped East Hanover veterans obtain the benefits they need. To learn more, please see our New Jersey VA benefits page.
Medicaid is a health care benefit program designed to meet the needs of individuals or families with low incomes. For those in long-term care, Medicaid may come into effect when their personal assets are nearly depleted. Staying in long-term care is known to be very pricey, so it's not hard to understand why people often fall back on public benefits when facing long-term medical problems.
]]> One thing to remember is that when Medicaid pays for long-term care, it is not likely to be enough the kind of high-quality care individuals and their loved ones would hope for. This is why many people plan ahead and protect their assets in order to have funds available to supplement Medicaid's long-term care support.Right now, the Obama Administration is working with states to negotiate the terms of Medicaid funding, which is provided cooperatively between the federal government and individual states. Broad cuts could have a negative effect on the program's ability to deliver support to individuals receiving long-term care. Additionally, cuts in the program could also adjust expectations for planning.
Like many public programs, Medicaid is incredibly complex. Adding the complexities of long-term planning for finances just makes the idea of Medicaid even more complicated. This is why it's best to consult with a trustworthy attorney when creating a long-term plan for care.
Source: New Jersey Herald, "Obama's budget to spare Medicaid from deep cuts," Ricardo Alonso-Zaldivar, April 4, 2013
]]>The New Jersey couple, who were both retired at the time, decided to buy into a long-term insurance policy with relatively high premiums. Although this created a significant financial impact, she knew that purchasing the plan was worth it. Additionally, the couple was fortunate enough to have enough money in savings. This story serves as a valuable reminder to those who are considering long-term care planning options for themselves or loved ones.
]]> In terms of long-term care insurance, there are several options to suit an individual's needs. Buying into a policy at a younger age is a solid way to both receive lower rates and be proactive about the future.Of course, purchasing an insurance policy is only one aspect of care planning. It's important to make sure that individuals will have enough funds set aside to take care of their health as they age. Because certain aspects of life are unpredictable, a person may eventually be eligible for Medicaid once available funds are low, which is something else to include in a care plan. No one can be entirely certain what their exact needs will be in their future, but there are ways to thoughtfully plan ahead.
Aging and its effects can be a difficult topic to consider -- especially with loved ones. Although it may be difficult to avoid the emotions attached to long-term care planning, it's important to remember that it's just as much a financial decision as anything else. As such, it can be beneficial to take a measured approach to planning and seek out advice to make sure a plan will truly suit your unique situation.
Source: The New York Times, "Expense and Emotions in Preparing for Long-Term Care," Ann Carrns, March 25, 2013
According to reports, Griffith's estate plan put most all of his real estate and assets into a trust, which are now controlled by an undisclosed trustee. His will did not specify what he wanted done with the house set to be torn down, nor did the document mention anything about a museum chronicling his career.
]]> Whoever became the trustee of Griffith's property and assets has the ability to handle them in whatever way they see fit. If his wife has been designated as the trustee, she permitted to tear down the house since there was no specific provision in the will against doing so.Based on reports, it appears as though the museum was an idea that Griffith had only verbally mentioned to friends. Since there was no provision included in his estate plan to establish the attraction, it may or may not become a reality. There is no clear timeline for the house to be removed from the property, but Griffith's widow has been obtained a permit to begin demolition.
This case serves as a reminder to East Hanover residents to make sure their wishes are put in writing in an estate plan. A provision in a will doesn't have to be as significant as building a museum, but clearly defining wishes in estate planning documents will ensure that the trustee follows through with the appropriate action.
Source: USA Today, "Andy Griffith's widow plans to raze his home," March 21, 2013
At the turn of the new year, headlines were focused on the "fiscal cliff" negotiations. After an agreement was finally reached, some of the finer points of the tax law changes were lost in the hubbub. Namely, there were important implications for those looking to approach their estate planning strategically.
]]> One of area of estate and tax planning affected by the fiscal cliff deal is the estate tax. Over the last several years, the rate and level for exemptions has changed dramatically. This has made it very difficult for individuals and families to develop a consistent tax strategy, particularly if they have significant assets. Now, however, the estate tax exclusion has been set at $5 million and will be indexed to inflation in the future. This means that the first $5 million bequeathed in an estate plan will not be taxable.Although this aspect of the tax code appears to be stable for the time being, there have been mutterings of a more extensive tax code overhaul, which could have serious implications for tax strategies. Knowing that tax changed -- major or minor -- could be on the horizon is a solid reason to make sure you receive the best advice possible and pursue strategies that will protect your interests and assets.
Source: Kiplinger, "2013 Tax Planning Gets Easier," Sandra Block, April 2013
The center will be helping veterans seek jobs, counseling, education, as well as assist them in seeking disability benefits. The center will be a place where veterans can get assistance in seeking help when navigating both federal and state systems available to them. It is hoped that the center can help alleviate the nearly 10 percent unemployment rates of New Jersey's veterans.
]]> The gala, which took place at the St. Nicholas Greek Orthodox Church in Wyckoff, hoped to raise money and awareness for veterans while thanking them for time served. Lately, the Department of Veterans Affairs has been focusing on veterans suffering from post traumatic stress disorder (PTSD).The counseling and educational programs provided are geared towards helping the veterans returning from combat zones readjust from having served overseas. Helping the veterans and their families reconnect and return home as seamlessly as possible is one of the center's primary goals. Part of that reentering into society involves helping those veterans apply for and receive the disability and veteran benefits available to them.
If you are a veteran that would like some assistance in applying for the benefits that you served and sacrificed for, an attorney who practices in veteran's benefits can help. Their knowledge and skills in dealing with veteran issues can assist in guiding your through the process.
Source: NorthJersey.com, "Veterans find new help in Oakland," Evonne Coutros, Mar. 4, 2013
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