By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Guardianship and Estate Planning Attorney A client was referred to me by another attorney. She was the victim of domestic abuse and is currently in the process of getting divorced. She wants to prevent her husband from gaining custody of her children should she pass away. Her divorce attorney advised her that the father would have parental rights in the event of her death, regardless of what her Will says and that she would be wise to obtain a court order regarding same as part of her divorce. I was asked for my opinion. There is a reported New Jersey Supreme Court decision Watkins v. Nelson, 163 …
A Granddaughter Does Not Owe Gift Tax on Money She Inherits for College Tuition
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Planning Attorney I’m always asked about gift taxes when clients want to give away property to a loved one while alive or upon death. This frequent question generally involves gifts for college, a wedding or other major life event. The short answer is no gift tax is owed, but you will have to file a gift tax return (IRS Form 709) if you give a person more than $15,000 in any one year. The amount in excess of $15,000 will be deducted from your lifetime unified gift and estate tax exemption, currently $11 million in 2018. That’s not even a reality for 99.5% of Americans. If …
Can You Gift Real Estate to a Minor Under the Age of Eighteen (18) and if so, How?
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Real Estate Attorney I was recently asked if there was a simple, ironclad way to transfer title to real estate in New Jersey to a 13 year old minor child. A “minor” means an individual who has not attained the age of 21. Many people assume that a grantee (the person to whom ownership is transferred) must be at least age 18 or 21 years of age in order to legally own real estate. What is the status of a deed transfer to a 13 year old and does that status change when he or she reaches age 18/21? Surprisingly you don’t have to be an adult …
Be Careful About How Often You “Roll Over” Your IRA
By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Estate Planning Attorney A long-standing rule about how many IRA-to-IRA “rollovers” a taxpayer can make in a single year has changed, generally speaking. Read this post to avoid unnecessary taxes and penalties. A rollover means moving funds from one IRA to another. The longstanding rule has been that taxpayers may roll over multiple IRAs in a single year. The Internal Revenue Service had interpreted the limitation of one rollover a year to apply separately to each IRA a taxpayer may own. So the taxpayer could roll over IRA A in February, IRA B in May and IRA C in October without the rollover being treated (and taxed) as an …
The Marital Deduction: A Valuable Estate Planning Tool
By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Estate Planning Law Attorney The federal estate tax marital deduction is one of the most important estate planning tools available to a married couple. The basic marital deduction rule is that, upon the death of the first spouse, the value of any interest in property passing to the surviving spouse is deducted from the decedent spouse’s gross estate. This means that the amount passing to the surviving spouse escapes taxation in the decedent spouse’s estate. There is no limitation on the value of property that can qualify for the marital deduction. By transferring sufficient assets to the surviving spouse in the proper manner, estate tax liability upon the first …
Sick of New Jersey’s Obscene Taxes? Then Consider Changing Your Domicile to Florida
By Fredrick P. Niemann, Esq. of Hanlon Niemann, a NJ Elder Care Attorney Sick of New Jersey’s high taxes and anti-business politics in the state legislature? Then join the growing list of ex-patriots leaving the garden state for Florida and the Carolinas. The most important factor in determining when your domicile has changed from New Jersey to Florida is your state of mind — what you feel inside. It has been stated often that your domicile is the place you always intend to return to whenever you leave. Here’s a story to illustrate my point. I received a telephone call from a woman who attended a seminar. She proudly stated that she had become a Florida domiciliary over the past …
Health: The Use of Discretionary Trusts to Protect Assets From Creditors and the IRS
By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Asset Protection and Trust Attorney No one wants their life savings seized by creditors, but can you leave an inheritance to a child or loved one who has spending and creditor problems or has a huge unpaid bill to the IRS? The answer is yes, but you must be very careful. Take this case that recently presented itself to me at the office. My client’s child has a large IRS lien against them for unpaid taxes. Dad wants to leave his estate to his only child but doesn’t want the IRS to seize it. The issue presented is/was: Whether a completely discretionary trust with spendthrift provisions will have its …
2014 Overview to Federal Estate, Gift and Generation Skipping Taxes
By Fredrick P. Niemann, Esq. of Hanlon Niemann, a NJ Estate Planning Law Firm The Federal government through the IRS imposes three different types of tax on the transfer of wealth from one individual to another, namely: (1) estate, (2) gift, and (3) generation skipping transfer taxes. New Jersey has its own separate state death transfer tax to pay, but that’s a separate topic and not part of this article. The 2014 exemptions from the Federal estate, gift and generation skipping transfer (or “GST”) tax have increased to $5,340,000 per person. Not bad. The gift and estate tax exemptions have been unified, meaning that if an individual makes a gift during his or her lifetime, he or she may lose …
REVOCABLE–VS- IRREVOCABLE TRUSTS: CAN THEY BE CHANGED IF THE MAKER CHANGES THEIR MIND?
By Fredrick P. Niemann, Esq. a New Jersey Estate Planning Attorney As you may know, a revocable trust can be changed by its creator at any time. The issue is whether the settlor of an irrevocable life insurance trust and a qualified personal residence trust can modify the trusts’ beneficiary designations. It is well settled under New Jersey law that a settlor of an irrevocable trust generally has the power to modify the trust only “if and to the extent that by the terms of the trust he reserved such a power.” Coffey v. Coffey, 286 N.J. Super. 42, (App. Div. 1995) (quoting Restatement (Second) of Trusts § 331 (1959)). However, even in circumstances where the settlor did not reserve …
WHEN GIFTING REAL ESTATE IN NJ – WHAT IS THE ACTUAL DATE OF THE GIFT?
By Fredrick P. Niemann, Esq. a NJ Estate Planning Attorney We have clients who gifted their interests in New Jersey Real Estate. These clients wanted to complete their gift in 2012. It is our practice that when clients gift property, we have them sign a deed which is then notarized. In this case, the deed was signed prior to December 31, but didn’t get sent to the County Clerk for recording until January 5, 2013 (because the clients were out of the US). The question raised was whether we can still consider the gift as having been gifted in 2012 for NJ and federal estate tax exemption purposes? A gift normally occurs when the donor parts with dominion and …