(732)572-0500. Edison, NJ.
To email Ken V, go here:
2053 Woodbridge Avenue - Edison, NJ 08817
Thursday, August 22, 2019
E566 In this issue: 1. Reasons to set up a trust to protect children and grand children with addiction issues. 2. Understanding Disinheritance. 3. Using a Spendthrift Trust for Addicts. 4. September 9 at 7pm South Brunswick Library: Wills, Estate Planning & Probate Seminar. 5. Charity Running & other Community Events. 6. Professional Space For Rent, 2045 Woodbridge Avenue.
In this issue:
1. Reasons to set up a trust to protect children and grand children with addiction issues.
2. Understanding Disinheritance.
3. Using a Spendthrift Trust for Addicts.
4. September 9 at 7pm South Brunswick Library: Wills, Estate Planning & Probate Seminar.
5. Charity Running & other Community Events.
6. Professional Space For Rent, 2045 Woodbridge Avenue.
Reasons to set up a trust to protect children and grand children with addiction issues
Given the current epidemic of addiction in our society, it's natural that many families have a child who is addicted to drugs or alcohol. Estate planning for addicts can be emotionally and mentally difficult, because a parent likely do not want to disown the child. However, as responsible parents, a parent likely want to ensure that any inheritance the child receives is not made available to them until they are clean or sober.
Taking steps to create an estate plan that considers and accounts for the child's addiction can prevent them from receiving a lump sum of funds while they are under the influence. By preventing the child from receiving too-large an inheritance at one time, a parent reduce the possibility of hard-earned family assets being wasted and protect the child from harming him or herself because of their lack of control regarding their substance and access to a large amount of money.
Fortunately, there are several steps a parent can take which can help a parent to leave the assets to the child without giving them assets they could use to harm themselves. While a parent should always discuss the situation and theirs with a professional estate planner or tax professional, the following include ways that a parent can make estate-planning work for a parent and the child.
2. Understanding Disinheritance
Disinheritance is often the first option for those considering estate planning for an addict. Depending on the situation, it may be the right decision, but a parent most likely don't want to consider it. Even if a parent are estranged from the addicted child, a parent likely still care for them deeply and want the best for them. Disinheritance is the process of cutting a person out of the will so that if a parent die, they receive nothing. While it may be tempting for some, especially if a parent believe that the child will likely never get better, this decision cannot be changed without rewriting the will, even if the child goes into rehabilitation and becomes clean or sober. If a parent choose to disinherit the child, a parent must leave specific instructions stating that they receive nothing. Should a parent choose to do this, it is crucial that a parent do so with a lawyer present, so that the child cannot contest the will.
Disinheritance is most often used when there are multiple potential beneficiaries, such as other children, and often with the intent that the sibling give some of the estate once the addict is back on his or her feet. However, this may or may not work out depending on family dynamics.
3. Using a Spendthrift Trust for Addicts
A spendthrift trust is one of the best options when estate planning for addicts. There are several forms of this trust a parent can consider, and each has pros and cons. At it's most basic, the spendthrift trust enables a parent to put spending authority in the hands of a trustee, or a trusted person who will control the reckless spending of the child. This can prevent them from wasting funds and can prevent them from using funds to purchase drugs.
Spendthrift clauses in trusts are also valuable because a parent can use them to provide necessary funds such as child support, alimony, food, and shelter to the beneficiary, without allowing them to spend anything else. This enables a parent to offer support, even after a parent are deceased.
Finally, spendthrift clauses typically protect the funds in the estate from creditors. So long as the funds are in the trust, creditors cannot reach them. This is ideal in instances where the child may have to declare bankruptcy due to poor financial decisions while under the influence of drugs or alcohol, has a large amount of debt, or is likely to accrue a large amount of debt. However, once funds are taken out of the trust, they can be garnished by creditors.
In some cases, a parent may be able to set up a discretionary spendthrift supplementary needs trust, which enables the child to qualify for needs-based government benefits (SSI, Medicaid, housing, SNAP, etc.), while offering the other benefits of the trust.
The best way to set this up is to create a Testamentary Discretionary Trust with a spendthrift clause, which will come into effect after a parent are deceased. Then, the funds will be moved into trust and spending will be controlled by the trustee for the benefit of the child (the beneficiary).
If the elderly parent transfers assets to children, rather than puts them in a trust, certain risks must be anticipated. These risks can be avoided if the assets are put in a trust. The risks of an outright transfer include:
* Claims of creditors. The claims of the creditors of the adult children could be satisfied through the assets of the parent if the parent makes outright transfers to the children.
* Matrimonial action. If a child to whom assets are transferred is subsequently divorced, the transferred assets may become subject to a claim of equitable distribution. While the law dictates that assets transferred from a parent to a child are not subject to equitable distribution, practitioners in the field of family law indicate that judges often find ways to give additional assets, other than the transferred assets, to the other spouse. In addition, the assets transferred could affect alimony or support rights or obligations.
* Bad habits. If a parent transfers assets to a child who is a gambler, a drug addict, an alcoholic, or a spendthrift, the assets may be squandered and no longer be available to the parent.
9/21/19 KeyportFest 5K Fireman's Park Saturday 8:30 am
6. Professional Space For Rent, 2045 Woodbridge Avenue
700 Sq. Ft. of Professional Space for rent with off street parking. This building was just remodeled with a new floor, freshly painted walls, new upgraded heat & air conditioning as well as recess lighting and a new bathroom as well. Your clients will be impressed with your new space! $1700 per month.
Plus small Office for rent Professional Office Space available in Edison Law Office
2053 Woodbridge Ave.
Edison, NJ 08817
Excellent space for an Attorney, Financial Planners, Accountant, Insurance Agents, and other Business Professionals as a 2nd location or location to meet clients in Edison.
The offices are located on the 1st floor of the building.
2 rooms office
office room # 6 approx 12.4 x 9.4
and front room approx 8 x 9 -office room # 5
plus use of reception room 16.6 x 7.2
and use of storage area in basement
Previously used by Robert Blackman, late former Judge and Prosecutor of Edison
$500 per month [was $600]
Owner of building is local attorney, Kenneth Vercammen who handles Municipal Court, Estate Planning & Probate, and Criminal Law.
Editor's Note and Disclaimer:
All materials Copyright 2019. You may pass along the information on the NJ Laws Newsletter and website, provided the name and address of the Law Office is included.