October 21, 2015
In this issue:
1. Reducing the NJ Estate Tax on
estates over $675,000.
2. Include Organ Donation in Your
Living Wills
3. Ziploc bag could be seized if
outside of car. State v. Jessup.
4. Next Free Community Seminars
5. Fall Charity Races
E479
1.
Reducing the NJ Estate Tax on estates over $675,000.
A New Jersey estate tax return must be filed if the decedent's
gross estate plus adjusted taxable gifts exceeds $675,000.
Even if there is no NJ Inheritance Tax there can be a NJ Estate Tax if the
estate exceeds $675,000 and the beneficiaries are children or grand children.
There is a substantial tax that must be paid after the 2nd spouse dies on
amounts over $675,000.
You can hire an attorney to set up Trusts or a Will with a Credit Shelter
Trust to try to reduce NJ Estate taxes due. We charge a minimum fee of $400
for each Trust within a Will. A separate stand alone Trust has a minimum fee
for $2,500.
Even if your net worth is well below the Federal threshold where the federal
estate tax becomes an issue, the New Jersey Estate Tax may still be a
problem. The New Jersey Estate Tax affects any person or married couple with
net worth over $675,000. There is no exemption for assets you leave to
your children; those assets are fully taxed, even if in joint names. There is
also no exemption for the value of your home and life insurance, so it is
easy to hit the $675,000 threshold very quickly.
If
you have assets such as bank accounts in joint names, or bank accounts
payable upon death, these go directly to the beneficiary. Your Will cannot
change who the beneficiary is on a joint account, payable upon death
accounts, or other assets such as Life Insurance policies. You would have to
directly contact the bank or company where the assets are held and either
direct that they change the beneficiary or not list any beneficiary at all
other than your Estate. Therefore, if you have $1,200,000 in assets,
you can change the beneficiary so the husband owns $600,000 and the wife owns
the other $600,000.
WHAT IS A CREDIT SHELTER TRUST and how can the attorney help Reduce NJ Estate
Taxes and protect the surviving spouse and children?
"The
Credit Shelter Trust (sometimes referred to as a "Bypass Trust" or
an "A/B Trust") is a popular estate planning technique used by
married couples with combined assets in excess of $675,000. The purpose of
the Credit Shelter Trust is to avoid the wasting of federal and state
exemptions on the death of the first spouse. Instead of leaving all assets to
the surviving spouse and thereby exposing the surviving spouse's estate to
more tax, both spouse's Wills are drafted to establish a Credit Shelter Trust
to come into existence and be funded on the first spouse's
death.
In a typical Credit Shelter Trust, the surviving spouse is entitled to
receive all of the income from the Trust for his or her lifetime, and has the
right to demand principal distributions for his or her health, education,
support and maintenance in his or her accustomed manner of living.
Distributions in excess of that standard require the cooperation of a
Co-Trustee - often an adult child of the surviving spouse or a trust
department of a bank.
The amount, which funds a typical Credit Shelter Trust, varies according to a
particular Client's financial and family circumstances. For Federal Estate
Tax purposes, a Credit Shelter Trust can be funded with the Decedent's
remaining federal estate tax exemption ($5.4 million as of 2015 if no prior
gifts have been made). However, in New Jersey, since the state estate tax
exemption is only $675,000, if the Credit Shelter Trust is funded with more
than $675,000, this will cause some New Jersey Estate Tax to be paid. For
example, if the $2 million is funded, the tax to the State of New Jersey is
$99,600. Because of this, many Clients choose to fund the Credit Shelter
Trust with only $675,000.
If the Credit Shelter Trust technique is implemented as part of a Client's
Estate Plan, you can hire the attorneys for a separate fee to assist the
Client in re-titling his or her assets so that assets are available to fund
the Credit Shelter Trust. Re-titling is necessary because most Clients tend
to hold assets jointly with right of survivorship and assets must be titled
individually in a person's name in order to be eligible to fund a Credit
Shelter Trust. We work with a tax attorney to help our clients." Source:
http://www.davidkwhitlock.com/CM/FAQ/What-Is-Credit-Shelter-Trust.asp:
Examples
of NJ Estate Tax due if no estate planning:
Your
Estimated NJ Estate Tax: $22,799.60
If
Estate Value: $900,000.00
Your
Estimated NJ Estate Tax: $27,600.00
If
Estate Value: $1,000,000.00
Your
Estimated NJ Estate Tax: $33,200.00
If
Estate Value: $1,100,000.00
Your
Estimated NJ Estate Tax: $38,800.00
Your
Estimated NJ Estate Tax: $45,200.00
Your
Estimated NJ Estate Tax: $51,600.00
ADMINISTRATION OF AN ESTATE
If you are named the executor, you must visit the County Surrogate to probate
the Will. You will need the following items:
1. The Death Certificate
2. The Original Will
3. Names and Addresses of decedent's, next of kin and list of beneficiaries
4. Minimum of $130.00 for Surrogate fees
A
NJ state inheritance tax return must be filed if real estate is left and the
tax may be required on the transfer of real or personal property within eight
months after death.
Kenneth
Vercammen & Associates.
2053
Woodbridge Avenue
Edison,
NJ 08817
2.
Include Organ donation in your Living Wills
Each
day a lucky 55 people (or so) receive an organ transplant, but another 55,000
are on the waiting list. 10 people on the waiting list die each day,
because not enough organs are available. Four thousand of them die each
year while waiting. Every 16 minutes a new name is added to the National
Organ Transplant waiting list.
To
Remember Me - I will live forever
By
Robert N. Test
The day will come when my body will lie upon a white sheet neatly
tucked under four corners of a mattress located in a hospital busily occupied
with the living and the dying. At a certain moment, a doctor will
determine that my brain has ceased to function and that, for all intents and
purposes, my life has stopped. When that happens, do not attempt to instill
artificial life into my body by the use of a machine, and don't call this my
death bed. Let this be called the bed of life, and let my body be taken from
it to help others lead fuller lives. Give my sight to the man who has
never seen a sunrise, a baby's face or love in the eyes of a woman. Give
my heart to a person whose own heart has caused nothing but endless days of
pain. Give my blood to the teenager who was pulled from the wreckage of
his car, so that he might live to see his grandchildren play. Give my
kidneys to one who depends on a machine to exist. Take my bones, every
muscle, every fiber and nerve in my body and find a way to make a crippled
child walk. Explore every corner of my brain. Take my cells, if
necessary, and let them grow so that someday a speechless boy will shout at
the crack of a bat and a deaf girl will hear the sound of rain against her
window. Burn what is left of me and scatter the ashes to the winds to
help the flowers grow. If you must bury something, let it be my faults,
my weaknesses and all prejudice against my fellow man. Give my sins to the
devil. Give my soul to God. If by chance you wish to remember me,
do it with a kind deed or a word to someone who needs you. If you do all I
have asked, I will live forever.
Robert
N. Test
Important
Recent Case
3.
Ziplock bag could be seized if outside of car. State v. Jessup ___NJ
Super. ___(App. Div. 2015) A-2458-14T2
Defendant had no expectation of privacy in a zip-lock bag containing
controlled dangerous substances that the police saw him place on top of a
parked car's rear tire.
4.
Next free community seminars
November
10 at 11:45 Wills & Power of Attorney Seminar
South
Brunswick Library
110
Kingston Lane
Monmouth
Junction NJ 08852
November
12 at 7pm Wills & Power of Attorney Seminar
Piscataway
Library Kennedy Branch
November
17 at 1pm Wills & Power of Attorney Seminar
Old
Bridge Library
1
Old Bridge Plaza
Old
Bridge NJ 08857
[last
program for the year]
5.
Fall Charity races
10/25
Trick or Trot 5k 11am now at Deal Casino
10/28
RVRR Halloween pub-crawl New Brunswick
11/1
RUN with the VIKINGS 5K 10:00 AM South Brunswick High School, Bob
Tona's event [Ken V can't attend , but it's a good race]
11/8
Hashathon 6.6 Mile Cheesequake challenging,
dangerous trails, free beer, best post race party 732-542-6090 11am Ken
V can't attend , but it's a good race
11/14
Saturday SOMERSET TURKEY TROT Run for the
Turkeys! 5K-road race @9:30am
Sunday,
November 15, 2,4, or 6 miles, Gobbler
Express Train Run, Asbury Park, New Jersey not a race rain Run -
Gobbler Express Sunday, November 15, 2015 Train Leaves The Station at 10:58
AM Check in Starts at 9:30 AM at Johnny Mac's Located at 208 Main Street in
Asbury Park - Across from Train Station
11/21
Manasquan Turkey Run å 5-mile 11am party at taverns after race discount
beer
11/27 Born
to Run 5 mile Freehold 11am
11/28
Crazy Eddie Memorial Hash run- not a race, trail hash with beverage
stops
11/29
Navesink 15k & 5k 10am Post race at Red Bank elks
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Editor's Note and Disclaimer:
All materials Copyright 2015. You may pass along the
information on the NJ Laws Newsletter and website, provided the name and
address of the Law Office is included.
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com
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