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What if I am not clear on my legal needs?
Visit me and find out! Often times, clients meet with me for a one or two hour consultation, paid for at the time, just for purposes of gathering accurate information as to the options that they have. Some clients then retain me to do additional work for them, but others come just for the consultation. Many of my clients are referred by attorneys, bank trust officers, accountants, and financial planners and managers, and social workers who have already identified a client’s need for estate planning.
What’s included in a “comprehensive” estate plan? Why do I need one?
Wills, Trusts, and Living Wills are an integral part of almost every estate plan. A Durable Power of Attorney is a powerful business tool that should be a part of every comprehensive estate plan. Many people believe that because their total assets are under the federal exemption amount they do not need an estate plan. Nothing could be further from the truth. Everyone needs to plan for the orderly distribution of their assets after death and the appointment of executors, guardians, and trustees. This can best be done in a Will, created in the context of a comprehensive estate plan.
Now that the Federal Estate and Gift Tax Exemption is $12,920,000, do I still need to do estate planning?
Yes. Estate planning is not strictly tax planning. Despite what you may have read in the press or heard on radio or television, you still need to plan your estate and it still may need tax planning. Don’t fall prey to the belief that because there is now a $12,920,000 federal estate and gift tax exemption that you don’t need to do any planning. Now, in fact, is an excellent time to plan your estate with the maximum flexibility built into your documents. The more than $12,920,000 exemption is indexed for inflation, the tax rate has been raised to 40%, and portability is now available.
The generous exemption amount is scheduled to sunset in 2025 back to the former $5,000,000 amount. Stay tuned!
What about other death taxes?
In the past, New Jersey had its own version of a death tax called the New Jersey Estate Tax which was enacted in 2002. At that time, the exemption was a paltry $675,000.00 per person. On November 1, 2016, in a political deal to raise the gasoline tax, the New Jersey legislature modified the New Jersey Estate Tax. On January 1, 2017, the exemption amount increased to $2,000,000.00 per person. The next change took place on January 1, 2018, at which time the New Jersey Estate tax was repealed in its entirety. Stay tuned for newer information now that New Jersey has a new governor. The repeal could be permanent, or a new estate tax could be imposed. There is also the possibility that if the estate tax were re-enacted the exemption amount could be changed yet again. This sense of uncertainty alone is a compelling reason to keep your estate plan up to date.
There exists a New Jersey Inheritance Tax from which only your spouse, civil union partner, and lineal descendants are exempt. All other beneficiaries are subject to an inheritance tax ranging from 11% to 15%. There are no plans to repeal the Inheritance Tax at this time.
What are the fee arrangements?
I offer a basic set of estate planning documents for a flat fee. Payment in full for consultations is due at the end of your visit. All other legal work is done on a retainer basis meaning that I ask that you deposit a retainer against which I can bill as services are provided. I provide my clients with a retainer agreement that spells out all terms and conditions of representation before commencement of an undertaking.
How do my retirement plans fit into estate planning?
Today, significant portions of my clients’ asset mix include company-managed 401(k) plans and self-directed funds known as Individual Retirement Accounts. These tax-deferred retirement plans present challenging issues in the estate planning process. Since the passage of the SECURE Act at the end of 2019, the ability to do generational planning with retirement accounts has been negatively impacted.
How often should I review my estate plan?
Depending on their age, I advise my clients to review their estate plan every one, two, or three years and to advise me of any personal, business, or financial changes that may affect their own estate plans. Estate planning is an on-going process and not something you do once and then forget about.
How is life insurance used in estate planning?
Holding life insurance in an irrevocable life insurance trust could help keep your heirs’ inheritance from being reduced by estate taxes. That’s one good reason to carefully consider the role of life insurance in your estate plan, either to plan for the liquidity to pay estate taxes or for asset value replacement. Remember, life insurance proceeds are not subject to income tax, but without appropriate planning for their ownership, they are included as part of your gross estate for federal and New Jersey estate tax purposes.
How is probate and administration of decedents’ estates accomplished?
From the first appointment with the Surrogate, through the final accounting and distribution of the estate to the beneficiaries, my staff and I offer compassionate attention to the bereaved family while providing efficient and timely service, working hand-in-hand with executors and trustees. Because I encourage executors to perform as many of the tasks of administration as they are comfortable handling, the cost of administration may be reduced. My staff also stands ready to assist with those tasks which the executor or administrator may not be comfortable handling.
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