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 …

Are You Really Married in New Jersey If There is a Religious Wedding But No Marriage License?

HNW Elder Law, Estate Administration and Probate

I recently read a series of posts about the title of this blog post.  In all truth, I hadn’t really thought about it or had the issue come up.  Here’s what happened. A person died with an estate where the decedent left a handwritten Will.  He has a “common law wife” of 30 years.  They were married in New York state.  The common law wife says they were married by a Rabbi in a traditional Jewish service but not in a civil service.  Is she arguably his wife and a class A beneficiary or a mere class D beneficiary for purposes of New Jersey death tax? The decedent’s Last Will leaves his “spouse” one-third of his estate with two-thirds going …

Widow in Second Marriage Has Legal Rights to Deceased Spouse’s Estate

HNW Elder Law, Estate Administration and Probate

A client’s dad was in a second marriage when he died recently.  The couple did not have a prenuptial or postnuptial agreement.  Dad always told the kids not to worry; they were protected, because he had signed a revocable living trust and pourover last will leaving everything to his kids.  The stepmother, however, says she’s entitled to the house and much more.  She threatens to sue if the family doesn’t agree.  Does she have a legal leg to stand on? Your father may have been well-intentioned, but he was wrong on the facts.  Without a prenuptial or postnuptial agreement, the marriage gives his widow many rights to his estate.  Notwithstanding the trust provisions, she may have the right to live …

Distribute Probate Estate Funds Cautiously, But Don’t Be Unreasonable

HNW Elder Law, Estate Administration and Probate

A client’s father’s estate is in probate.  His son is the personal representative.  Dad’s will leaves everything to his two sons (brothers) to share equally.  One of the brothers claim they need money now, and they’re pushing the executor to distribute the funds to them now, even though the estate isn’t settled.  He has assured the estate’s representative he will give back the money if it’s needed to pay estate’s debts.  Can and/or should this request be granted? Unless the estate is small and/or family members are in total agreement, executors should be working with a probate attorney who can advise them before disbursing estate assets.  I would be cautious but reasonable about distributing funds before the debts are settled, …

If You Have a Trust, Do You Also Need a Last Will?

HNW Elder Law, Estate Planning, Will Contest and Probate Litigation

If you have a living trust in place, why would a person need a will?  The answer straightforward :  You need a last will to address what is to be done with any asset that you may have unintentionally left out of your living trust.  Some examples of how this could happen: You buy property, (say a house), then die or become incapacitated before you can transfer the property into your trust. You co-own a bank account with someone else with rights of survivorship (say a child). The co-owner predeceases you and you forget to name a new co-owner. Your credit card company returns money to you for a trip that was canceled because of your death and it needs …