Leaving an IRA to a Loved One? How to Avoid a Tax Bomb

HNW Applying for Medicaid Long Term Care Benefits, Elder Law

An IRA trust is a terrific way to protect your IRA from wasteful spending by beneficiaries if you die Federal IRA tax laws require that an IRA trust be set up correctly to avoid costly mistakes This article explains the in’s and out’s of setting up an IRA trust to reduce Federal and New Jersey income taxes Income Tax Planning for Your IRA I recently read an interesting article on IRA’s and the importance of tax planning with beneficiary designations including the creation of IRA trust for protecting wealth from wasteful spending.  If this article speaks to you, call me and let’s discuss. Here Are Excerpts from the Article Which Explains a Trust for an IRA You wouldn’t leave your …

Selecting The Right Person(s) to Be the Guardian of Your Child(ren)

HNW Elder Law, Estate Planning, Guardianship Law

Deciding who should be the guardian of your kids is a tough decision Close family members are not always the best choice This article discusses “What To Think About” when selecting a guardian for minor children Questions Parents Should Ask About Guardians for Their Children Here’s a good question I was recently asked by a father when discussing his last will. “We’re worried about what will happen to our minor child(ren) if anything happens to my wife and I”, he said “Are grandparents automatically her guardians?  We don’t want that for our daughter because my parents are too old, and my wife’s mother is in very poor health.  Our daughter is 8.” So what does N.J. law say about the …

Can I Give My Dead Father’s Long Time Girlfriend a Gift if She is Not Mentioned in His Will?

HNW Elder Law, Estate Administration and Probate

NJ imposes an inheritance tax to non-exempt beneficiaries. A girlfriend of a deceased NJ resident is not an exempt beneficiary. How can the estate representative honor a decedents dying wish that a portion of his estate go to his girlfriend? I was recently asked to comment about the following case. A client is the only child of her deceased Dad, who died unmarried and without a Will, making the estate intestate because there is no signed Last Will.  His daughter has been appointed Administrator of his estate. She intends to honor her father’s dying wish that many of his assets go to his long-time girlfriend and companion. The value of the gift will be around $300k going to the girlfriend. …

If You Live Together with Your Spouse While Filing For Divorce, Medicaid Counts Both of Your Income

HNW Elder Law, Medicaid Eligibility and Asset Protection Planning

Income of both spouses is counted for Medicaid health coverage and medical payments I recently had a client who filed a fair hearing appeal because of the termination of NJ Family Care Medicaid health insurance. He was in the process of a divorce but living in the same household as his spouse. Both federal regulation 42 CFR §435.119 (b) (5) and state regulation N.J.A.C. §10:78-4.3 assert that countable income for purposes of determining eligibility “shall include the income of all members of the household unit.”  The federal regulations define two different tests to determine a household’s income.  The first, the modified adjusted gross income test, which the State used to calculate your income, defines a household “[i]n the case of …

How is a Self-Cancelling Promissory Note Treated in Estate Death Tax Administration?

HNW Elder Law, Estate Administration and Probate

Understanding What a Self-Cancelling Note Means Under federal law “[t]he value of a gross estate shall include the value of all property to the extent of the interest therein of the decedent at the time of his death.”  I.R.C. § 2033.  In the context of the estate tax, when properly written, a self-cancelling installment note (“SCIN”) functions to remove from the estate the property that is the subject of the installment note leaving no taxable asset in its place. An installment note reflects an agreement related to an installment sale.  As defined by the code, “‘installment sale’ means a disposition of property where at least 1 payment is to be received after the close of the taxable year in which …

Can the Legal Guardian or Parent of a Minor Child Set Up a Protective Trust?       

HNW Elder Law, Guardianship Law, Will Contest and Probate Litigation

This article discusses support trusts for minor children when a parent dies. New Jersey has a statute(s) that specifies the provisions that must be included in the trust. A surviving parent or legal guardian of a minor child can set up a trust. The guardian statutes in New Jersey provide a specific procedure for a surviving parent and/or legal guardian to set up a trust on behalf of their minor child who inherits property from their deceased father, mother, grandparent, or for that matter, any person. Under N.J.S.A. §3B:12-54.1, a parent or guardian may apply to the Superior Court for permission to set up a support trust for the benefit of the child or children when they will be receiving …

When Can a Court Award Legal Fees Against an Estate in Connection with Probate Litigation

HNW Elder Law, Estate Administration and Probate

In probate litigation, it is common for one or all sides to ask for reimbursement of their legal fees and the costs of prosecuting/defending the case.  So, what is the law on this subject?  Do the parties get reimbursed their legal fees and costs? Under Rule 4:42-9 (a) 2 – Fund in Court.  A Probate court can allow legal fees from a “fund in court” under certain circumstances.  So what is a “fund in court”?  A “fund in court” is when there are assets, money and property interest in the hands of a fiduciary who is a party before the court.  A court may grant an award when a party, in the interest of not just himself or herself but …

There’s Been a Big Change to Special Needs Trust Law:  Learn About it Here

HNW Elder Law, Special Needs Trusts for Minor Children and Adults

Back in the 1990’s, Congress passed a law that contained major changes to the federal Medicaid laws.  Included in the law was a provision permitting the creation of a special needs trust for disabled individuals under the age of 65.  This type of trust allows disabled individuals to place their assets in a special trust so he/she can preserve Medicaid eligibility.   This type of trust is known as a “d(4)(A) trust, a reference to the section of the law which created it.  It is also referred to as a 1st party Special Needs Trust because the assets place into the trust are owned by the disabled individual. A special needs trust has particular importance to disabled individuals who may receive …

Hey Doc, You Better Report Me to Motor Vehicles or You’ll Get Sued if I Hurt Someone

HNW Elder Care Law, Elder Law

I read an interesting article written by a personal injury attorney involving a case he settled when a physically and cognitively impaired patient killed a person in a motor vehicle accident. The driver’s doctors were sued for negligence because they failed to report the driver to the NJ Department of motor vehicles. Read the article; it’s very interesting. Do doctors owe a duty of care—outside the doctor/patient relationship—that supports a cause of action by third-party motorists? With more than six million licensed drivers in New Jersey, it is statistically inevitable that medically impaired drivers will cause some auto accidents. Indeed, a 2009 study by the National Highway Traffic Safety Administration (NHTSA) found that from July 3, 2005, to Dec. 31, …

Who Has Priority to be Appointed Administrator of the Estate of a Deceased Adult, a Parent or the Decedent’s Ex-Spouse or Their Minor Child?

HNW Elder Law, Estate Administration and Probate

An adult parent dies.  It’s tragic.  Now his or her estate needs to be probated and administered.  The person was divorced at the time of his/her death.  Who is legally eligible to handle the estate? The appointment statute gives first priority to the “surviving spouse or domestic partner” and if there is no surviving spouse” then to the remaining heirs of the intestate, or some of them, if they or any of them will accept the administration.”  N.J.S.A. 3B:10-2.  Based on the intestacy statute N.J.S.A. 3B:5-4, a minor child (under age 18) inherits the entire estate.  Therefore, it would follow that he or she would have the highest priority of appointment.  But if he or she is a minor, neither …