2015 Update Wills and Estate Planning by Kenneth Vercammen

2015 update Wills and Estate Planning Seminar
By Kenneth Vercammen
1. Federal Estate Tax exemption increased to $5,430,000 in 2015 so no Federal Estate Tax. However, New Jersey taxes estates over $675,000

2. Gifts permitted without Federal Estate & Gift tax remains at $14,000 per person.

3. We recommend Self- Proving Wills since witnesses to Will often move or pass away

4. Non-formal writings could be Wills under the 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
10. Taxpayer relief act
1. Federal Estate Tax exemption increased to $5,430,000 in 2015 so no Federal Estate Tax. However, New Jersey taxes estates over $675,000.
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 was 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 remained at $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 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 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 2nd marriage
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 2nd marriage situations. A Testator now means both male and female individuals, removing the term “Testatrix”. Will forms that say executrix should not be used. Materials athttp://www.njlaws.com/probateupdate.htm