2019 Estate Planning & Probate Newsletter
By Kenneth Vercammen, Esq. Edison, NJ rev 1/25/19
Index
1. NJ Estate Tax eliminated in 2018 and 2019 changes to Federal Taxes
2. Problemsif You Have No Will or a cheap online form not valid
3.NJ Inheritance Tax must still usually be paid if assets are going to persons other than spouse or children. 2019 tax rates
4. Power of Attorney- Do not use a form purchased online.
5. Set up a Testamentary Trust in your Will for Protection for a second spouse to protect assets for children and grandchildren
6. Federal Health Privacy Law (HIPAA)- Have a new Living Will prepared
7. Always have proper Self- Proving Wills since witnesses often move or pass away, don’t rely on cheap online forms
[Photos page 1, 2, 3, 4
p1 POPEClose encounter of the Pope kind , Pope Francis blesses N.J. Bar association and other pilgrims page 1,
page 2 Ethics speakers Prol Rosner Rome
p3
Photo text webinar Spevack, Womack, Bezer, Metha
P4 Spigner Isele]
1. The NJ Estate Tax was eliminated in 2018 although there is still an Inheritance Tax for money that is not going to spouse, children, grandchildren, etc.
2019 Federal Estate Tax for rich people
Generally, a decedent dying between Jan. 1 and Dec. 31, 2019, the estate should be subject to an estate tax, with an applicable exclusion amount of $11,400,000 (increased from $11,180,000 in 2018) and up from $5.49 million in 2017. In 2019, the annual Federal gift tax exclusion is $15,000. There is no tax to spouse.
2. Problems ifYou Have No Will or a cheap online form not valid
If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:
1. The procedure to distribute assets becomes more complicated. It will require all of the children to select someone to be the Administrator, then all the children to sign a Renunciation Affidavit in front of a notary. If all the children do not sign the Renunciation Affidavit if front of notaries, then a Complaint and Order with have to be filed in the Superior Court. Cost over $3,000. The preparation of a Will for under $400 eliminates these costs.
2. Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs often over $1,000 and extra legal fees
3. State law determines who gets assets, not you. People who dislike you or don’t care about you can get your assets
4. If you have no spouse or close relatives the State may take your property. Most people who rather have charities or friends get their money.
5. It often causes fights and stress within your family and sometimes lawsuits
6. If there are minor children a Judge determines who gets custody of grand children
7. You lose the opportunity to reduce State inheritance taxes and Federal estate taxes without improper planning
When loved ones are grieving and dealing with death, they shouldn’t be overwhelmed with Financial concerns and estate problems if there is no Will or not prepared or signed properly.
Who don’t you want to receive your assets?
Who is not the best choice to raise your children, or safeguard your children's money for college? Do you want children, or grandchildren, to get money when they turn 18? Will they invest money wisely, or go to Seaside and play games?
Beware of online documents not prepared by an attorney. Never use a form on line. No one tries to do their own electrical work on their home anymore or change their own oil. Have a professional do it right.
Make sure it is a Self-proving Will and says no bond required.
THE FOLLOWING IS A SAMPLE OF A VARIETY OF CLAUSES AND ITEMS WHICH SHOULD BE INCLUDED IN A WILL:
1ST: DEBTS AND TAXES
2ND: SPECIFIC BEQUESTS
3RD: DISPOSITION TO SPOUSE
4TH: DISPOSITION OF REMAINDER OF ESTATE
5TH: CREATION OF TRUSTS FOR SPOUSE
6TH: CREATION OF TRUST FOR CHILDREN
7TH: OTHER BENEFICIARIES UNDER 21
8TH: EXECUTORS
9TH: TRUSTEES
10TH: GUARDIANS
11TH: SURETY OR BOND
12TH: POWERS
13TH: AFTERBORN CHILDREN
A will must not only be prepared within the legal requirements of the New Jersey Statutes but should also be prepared so it leaves no questions regarding your intentions.
WHY PERIODIC REVIEW IS ESSENTIAL
Even if you have an existing Will, there are many events that occur which may necessitate changes in your Will. Some of these are:
* Marriage, death, birth, divorce or separation affecting either you or anyone named in your Will
* Significant changes in the value of your total assets or in any particular assets, which you own
* A change in your domicile
* Death or incapacity of a beneficiary, or death, incapacity or change in residence of a named executor, trustee or guardian of infants, or of one of the witnesses to the execution of the Will
* Annual changes in tax law
* Changes in who you like and who care about you
MAY I CHANGE MY WILL?
Yes. A Will may be modified, added to, or entirely changed at any time before your death provided you are mentally and physically competent and desire to change your Will. You should consider revising your Will whenever there are changes in the size of your estate. For example, when your children are young, you may think it best to have a trust for them so they do not come into absolute ownership of property until they are mature. Beware; if you draw lines through items, erase or write over, or add notations to the original Will, it can be destroyed as a legal document. Either a new Will should be legally prepared or a codicil signed to legally change portions of the Will.
3. NJ Inheritance Tax must still usually be paid if assets are going to persons other than spouse or children.
Separate from the Estate Tax, New Jersey imposes an Inheritance Tax on the estates of limited resident and nonresident decedents. The elimination of Estate Tax in NJ made no changes to the New Jersey Inheritance Tax.
Even if no inheritance tax due, a Tax Waiver on a house must still be obtained and filed if the house was not co-owned by the spouse. Your attorney will assist you by filing the mandatory Tax forms.
2019 INHERITANCE TAX RATES
Class A- children, grandchildren, parent: No tax is due
First $25,000.......................No tax is due
Next $1,075,000................ 11%
Next $300,000..................... 13%
Next $300,000..................... 14%
Over $1,700,000................... 16%
First $700,000......................... 15%*
Over $700,000......................... 16%
Class E- charities, non-profits: No tax is due
4. Power of Attorney- Do not use a form purchased online.
A Power of Attorney should contain reference to the NJ statute requiring banks to honor the Power of Attorney. Section 2 of P.L. 1991, c. 95 (c. 46:2B-11). A NJ bank does not have honor a Power of Attorney without the NJ language. Also, if you or your representative move it is a good idea to have a new POA prepared since a bank may give your selected person a hard time if the address on their ID is different than the address on the POA.
A Power of Attorney is a written document in which a competent adult individual (the "principal") appoints another competent adult individual (the "attorney-in-fact") to act on the principal's behalf. You usually select a spouse, child or family member. In general, an attorney-in-fact may perform any legal function or task, which the principal has a legal right to do for him/herself. You may wish to sign a Power of Attorney giving your spouse, children or partner the power to handle your affairs if you become ill or disabled. In the absence of a Power of Attorney or other legal arrangement to distribute property if you become disabled, your spouse, family or partner cannot pay your bills or handle your assets. The result can be lengthy and expensive delays. Have a current Power of Attorney prepared.
5. Set up a Testamentary Trust in your Will for Protection for a second spouse to protect assets for children and grandchildren
The Credit Shelter Trust (sometimes referred to as a “Bypass Trust” or an “A/B Trust”) was a popular estate planning technique used by married couples with combined assets to avoid the NJ Estate Tax. A Testamentary Trust (sometimes referred to as a Will trust or trust under will) is a trust, which arises upon the death of the testator [person who signed the Will]. A Credit Shelter Trust is a type of Testamentary Trust.
Even though NJ has eliminated the NJ Estate Tax, a Testamentary Trust within the Will is still a useful device to help ensure children and grandchildren with receive money down the road. Otherwise, the surviving spouse can spend all the money in Atlantic City. The surviving spouse could also get remarried and do a new Will leaving all assets to the new spouse. Also, if your spouse gets remarried and their new spouse has to go into a nursing home, your spouse may have to use some of your hard earned money to pay for the new spouse’s expensive nursing home. Many families want to protect at least some of the money from wasteful spending or a new spouse.
In a typical Will Testamentary 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 another trusted family member or friend.
6. Federal Health Privacy Law (HIPAA)- Have a new Living Will prepared
The federal regulation known as the Health Insurance Portability and Accountability Act (HIPAA) was adopted regarding disclosure of individually identifiable health information. This necessitated the addition of a special release and consent authority to all healthcare providers before medical information will be released to agents and interested persons of the patients.
Any old Powers of Attorney, Living Wills, Revocable Living Trusts, and certainly all Medical Directives now require HIPAA amendments. After you sign the Living Will in your attorney’s office, provide a copy to your doctor and family.
Powers of attorneys and Living Wills should be updated to reference this Federal reg.
A Living Will is your written expression of how you want to be treated in certain medical conditions. Depending on state law, this document may permit you to express whether or not you wish to be given life-sustaining treatments in the event you are terminally ill or injured, to decide in advance whether you wish to be provided food and water via intravenous devices ("tube feeding"), and to give other medical directions that impact the end of life. "Life-sustaining treatment" means the use of available medical machinery and techniques, such as heart-lung machines, ventilators, and other medical equipment and techniques that will sustain and possibly extend your life, but which will not by themselves cure your condition. In addition to terminal illness or injury situations, most states permit you to express your preferences as to treatment using life-sustaining equipment and/or tube feeding for medical conditions that leave you permanently unconscious and without detectable brain activity.
Fluids and Nutrition. I request that artificially provided fluids and nutrition, such as by feeding tube or intravenous infusion (initial one)
1. ______ shall be withheld or withdrawn as "Life Sustaining Treatment."
2. ______ shall be provided to the extent medically appropriate even if other "Life Sustaining Treatment" is withheld or withdrawn.
Directive as to Medical Treatment. I request that "Life Sustaining Treatment" be withheld or withdrawn from me in each of the following circumstances: (Initial all that apply)
1. ______ If the "life sustaining treatment" is experimental and not a proven therapy, or is likely to be ineffective or futile in prolonging my life, or is likely to merely prolong an imminent dying process;
2. ______ If I am permanently unconscious (total and irreversible loss of consciousness and capacity for interaction with the environment);
3. ______ If I am in a terminal condition (terminal stage of an irreversibly fatal illness, disease, or condition); or
4. ______ If I have a serious irreversible illness or condition, and the likely risks and burdens associated with the medical intervention to be withheld or withdrawn outweigh the likely benefits to me from such intervention.
5. ______ None of the above. I direct that all medically appropriate measures be provided to sustain my life, regardless of my physical or mental condition.
7. Always have proper Self- Proving Wills since witnesses often move or pass away, don’t rely on cheap online forms
An old New Jersey Probate law required one of the two witnesses to a Will to travel and appear in the Surrogate’s office and sign an affidavit to certify they were a witness. This often created problems when the witness was deceased, moved away, or simply could not be located. Some witnesses would require a $500 fee to simply sign a surrogate paper. My Grandmother’s Will was not self- proving, and the witness to Will extorted a $500 fee.
The New Jersey Legislature later passed a law to create a type of Will called a “Self-Proving Will.” In such a Will, the person for whom the Will is made must sign. Then two witnesses sign. Then the attorney or notary must sign; with certain statutory language to indicate the Will is self-proving. Beware of online documents not prepared by an attorney. Never use a cheap form on line. No one tries to do their own electrical work on their home anymore or change their own oil. Have a professional do it right.
When done properly, the executor does not have to locate any witnesses. This usually saves time and money. If your Will is not “self-proving” or if you are unsure, schedule an appointment with an estate planning attorney. Some law offices ignore the revised law, and fail to prepare self proving Wills. Do not use a law office that follows old methods and does not do a self-proving Will. Also make sure your Will includes a formal “no bond required” clause so the executor/ personal representative does not have to spend thousands of dollars being bonded.
Call the Law Office of Kenneth Vercammen at 732-572-0500 to schedule an in-office consultation.
Kenneth Vercammen & Associates
Attorney at Law
2053 Woodbridge Ave
Edison, NJ 08817
If you or anyone you know needs an updated Will, Power of Attorney or Living Will, please have them fill out our confidential interview from and schedule a consult.
Pope Francis blesses NJ Bar members p1
Ethics in Your Practice in Rome p2
Speakers Steven L. Menaker, Esq.
Daniel Rosner, Esq. Past NIAJ President
Kenneth A. Vercammen, Esq., Chair ABA Estate Planning & Probate Committee
Thomas H. Prol, Esq, Past NJSBA President
Top 25 Municipal Court Cases and Criminal cases in the past year-Webinar available
Speakers
Donovan Bezer, Esq.-Municipal Court Prosecutor Metuchen, Jersey City
Kenneth A. Vercammen, Esq. Past Chair, NJSBA Municipal Court Practice Section, Past NJSBA Municipal Court Practitioner of the Year
David R. Spevack, Esq. Municipal Court Prosecutor Edison and Woodbridge, Carteret, Governor Murphy Transition Team representative from Hispanic Bar Association
Francis M. Womack, III, Esq.-Municipal Court Prosecutor Edison, Piscataway and Sayreville, Carteret, Mayor- North Brunswick
Chirag Mehta, Esq. Municipal Court Prosecutor Irvington, Alternate Prosecutor Edison, North Brunswick and Morris Plains
Available online from NJ Bar
Page 4 ELDER LAW & ESTATE ADMINISTRATION BOOK
•Speakers/ Authors: KENNETH A. VERCAMMEN, ESQ., MARTIN SPIGNER ESQ., WILLIAM P. ISELE, ESQ.,
