1.
Federal Estate Tax exemption now permanently increased so no tax for Estates
under $5,340,000, and will be adjusted annually for inflation. However, New
Jersey taxes estates over $675,000.
2.
Gifts permitted without Federal Estate & Gift tax was increased to $14,000
per person.
3.
We recommend Self- Proving Wills since witnesses often move or pass away
4.
Non-formal writings could be Wills under the New Probate Law
5.
Undue influence: Recent cases can void Will signed under suspicious
circumstances
6.
NJ Inheritance tax
7.
Power of Attorney
8.
Federal Health Privacy Law (HIPAA)
9.
Competency required to sign a Will or Power of Attorney
1.Federal
Estate Tax exemption is now permanently increased so no tax for Estates under
$5,340,000, and will be adjusted annually for inflation. However, New Jersey
taxes estates over $675,000.
Federal
Exemption Amount for Non-Citizen Spouses is $145K up from $143K.
New
Jersey has an Estate Tax on amounts over $675,000. So, even if no Federal
Estate Tax due, the estate must still file a Federal Estate Tax Return, plus NJ
Estate Tax Return.
So,
for an unmarried or widowed person with assets of $1,000,000, there is No
Federal Estate Taxes, but the Estimated State Estate Tax: $33,200.00 For an
unmarried or widowed person with assets of $1,500,000, estimated NJ Estate Tax
is over $60,000. The Federal Tax rate on estates over $5,340,000 has been
increased from 35% to 40%.
How
to avoid NJ Estate Tax- hire an attorney to set up a personal residence trust
or irrevocable trust and have the assets taken out of your name and put into a
trust or given to children and grandchildren in the trust. Minimum fees for
trust are $3,000. This is probably not something a non-attorney can do on their
own. It is illegal for a non-attorney to provide legal advice or prepare most
legal documents.
2.
Gifts permitted without Federal Estate & Gift tax was increased to $14,000
per person.
However,
the amount permitted for Medicaid transfers is zero.
3.
We recommend Self- Proving Wills since witnesses often move or pass away
An
old New Jersey Probate law required one of the two witnesses to a Will to
travel and appear in the Surrogates 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 Grandmothers 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
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 elder law 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.
4.
NJ SENATE Law No. 708 made a number of substantial changes to the NJ Probate
Law.
Non-formal
writings could be Wills under the Revised provisions governing the
administration of estates and trusts in New Jersey. So make sure you have a
Formal Will drafted by an estate attorney.
The
law expanded situations where writings that are intended as Wills would be
allowed, but requires that the burden of proof on the proponent would be by
clear and convincing evidence. Possibly a Christmas card with handwritten notes
could be presented as a Will or Codicil.
To
present a non-formal Will or writing requires an expensive Complaint and Order
to Show Cause to be filed in the Superior Court, and a hearing in front of a
Superior Court Judge.
Be
careful; have a Will done properly by an experienced attorney.
Beware
of the Elective share rights of a new spouse. Have a Prenuptial Agreement if
entering into a 2ndmarriage
The
elective share provisions of the present Code has still not been changed yet.
Currently, the new spouse who is not given money in a Will can challenge the
terms of the Will. This is called electing against the Will by a spouse. A
spouse could receive up to 1/3 of the estate, even if only married for 2 weeks.
The spouse must file a Caveat or lawsuit in Superior Court. We suggest a formal
prenuptial agreement in 2ndmarriage situations.
A
Testator now means both male and female individuals, removing the term
Testatrix. Will forms that say executrix should not be used.
The
law provides a statute of limitations with respect to creditor claims against a
decedents estate. There is no longer a need to publish a Notice Limiting
Creditors.
5.
NJ Supreme Court has held a Will could be void if signed under suspicious
circumstances
When
there is a confidential relationship coupled with suspicious circumstances,
undue influence is presumed and the burden of proof shifts to the Will
proponent to overcome the presumption.
If
there is undue influence in making of Will and transfer by Deed of a house by
persons in Confidential relationship, this could subject those persons to
punitive damages in some instances, plus voiding of the Will.In the Matter of
the Estate of Madeleine Stockdale, Deceased196 NJ 275 (2008)
A
grievance based upon undue influence may be sustained by showing that the
beneficiary had a confidential relationship with the party who established the
account.SeeEstate of DeFrank, ___N.J. Super.
Accordingly,
if the challenger can prove by a preponderance of the evidence that the
survivor had a confidential relationship with the donor who established the
account, there is a presumption of undue influence, which the surviving donee
must rebut by clear and convincing evidence.
[Estate
of Ostlund v. Ostlund,391 N.J. Super.
390, 401 (App. Div. 2007).]
Although
perhaps difficult to define, the concept encompasses all relationships whether
legal, natural or conventional in their origin, in which confidence is
naturally inspired, or, in fact, reasonably exists.Pascale v. Pascale,113 N.J. 20,
34 (1988) (internal citation omitted). And while family ties alone may not
qualify, parent-child relationships have been found to be among the most
typical of confidential relationships.DeFrank,supra, slip op. at 13
(citingOstlund,supra, 391N.J. Super.at 401).
In
the context of inter vivos gifts, a presumption of undue influence arises when
the contestant proves that the donee dominated the will of the donor or when a
confidential relationship exists between the donor and donee.Pascale,supra,
113N.J.at 30 (internal citations omitted). Where parties enjoy a relationship
in which confidence is naturally inspired or reasonably exists, the person who
has gained an advantage due to that confidence has the burden of proving that
no undue influence was used to gain that advantage,In re Estate of Penna,322 N.J. Super.
417, 423 (App. Div. 1999), and the donee has the burden of showing
by clear and convincing evidence not only that no deception was practiced
therein, no undue influence used, and that all was fair, open and voluntary,
but that it was well understood.In re Estate of Mosery,349 N.J. Super.
515, 522-23 (App. Div. 2002) (citingIn re Dodge,50 N.J. 192,
227 (1967)).
The
person receiving gifts and greater benefit had a burden to show no deception
was practiced and that all of the transactions were fair, open and voluntary,
and that they were well understood.
Wills
should be prepared without undue influence. No one other than the person who is
signing the Will should be in the room. We usually request the person who wants
the Will to fill out the interview form themselves.
6.
NJ Inheritance tax
The
NJ Inheritance Tax Return instructions and NJ Estate Tax Forms were revised.
Dont use old forms. 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.
7.
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).
8.
Federal Health Privacy Law (HIPAA) Have a New Living Will Signed.
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.
The
effects of HIPAA are far reaching, and can render previously executed estate
planning documents useless, without properly executed amendments, specifically
addressing these issues.
Any
previously executed Powers of Attorney, Living Wills, Revocable Living Trusts,
and certainly all Medical Directives now require HIPAA amendments.
Powers
of attorneys and Living Wills should be updated to reference this new law. More
information on the HIPAA law athttp://www.njlaws.com/hipaa.htm
After
you sign the Living Will in your attorneys office, provide a copy to your
doctor and family.
9.
Competency required to sign a Will or Power of Attorney
My
law office cannot prepare a Power of Attorney, Will or any other legal document
unless a person is mentally competent. If someone is unable to come into our
office, we require the client or clients family to have the treating Doctor
sign theDoctor Certification of Patient Capacity to Sign Legal Documents It
is theclient
or clients familys responsibility to contact the doctor, obtain the signed
Certification at the clients expense, and then provide the law office with the
original signed Certification. The law office cannot accept phone calls stating
someone is competent. Therefore, it is wise do have your documents drafted
while you can drive and are healthy.
For more information, go to http://njwillsprobatelaw.com/willsandestateplanningsem.html?id=4977&a=
No comments:
Post a Comment