Wills and Estate Planning for Physical Therapists
By Kenneth Vercammen, Esq.
Where there’s No Will …
If you do not write a Will, the State has already written one for you. Your assets go to whoever a state law says receives the assets, or to the government itself! A Will should be a statement to the things you truly care about: your spouse, your children, your parents, your friends, your Church and charities.
It is important to do secession planning. Also, if you have partners in your business, a signed partnership agreement is valuable. Make sure you also have a Power of Attorney signed to plan for temporary disability. If your business is the primary support of family, how will your business continue to operate? How can your business be sold? It’s time for a call to action.
If You Have No Will:
If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:
1. People you dislike or people who dislike and ignore you may get your assets.
2. State law determines who gets assets, not you
3. Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs and legal fees
4. You lose the opportunity to try to reduce Estate Tax, State inheritance taxes and Federal estate taxes
5. A Judge determines who gets custody of children. A greedy brother or crazy mother in law could ask the court for custody.
6. If you have no spouse or close relatives the State may take your property
7. The procedure to distribute assets becomes more complicated
8. It probably will cause fights and lawsuits within your family
9. If no partnership agreement or procedure to transfer patient files your business good will could be lost.
When loved ones are grieving and dealing with death, they shouldn’t be overwhelmed with Financial concerns.
Think- Who don’t you want to receive your assets? Without a Will, they could receive your assets and request custody of children.
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?
Business assets
It is important to prepare a Will which sets forth distribution of a valuable property such as the good will of your business, the phone number of your business and equipment you own.
A Will must not only be prepared within the legal requirements of the state Statutes but should also be prepared so it leaves no questions regarding your intentions.
THE FOLLOWING IS A SAMPLE OF A VARIETY OF CLAUSES AND ITEMS WHICH KENNETH VERCAMMEN’S LAW OFFICE OFTEN INCLUDES 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
14TH: PRINCIPAL AND INCOME
15TH: NO ASSIGNMENT OF BEQUESTS
16TH: GENDER
17TH: CONSTRUCTION OF WILL
18TH: NO CONTEST CLAUSE
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
MAY I CHANGE MY CURRENT 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.
A portion of your Will and Estate Planning can be deducted on your income tax return when it deals with tax planning. Thus, part of the fee is tax deductible for income tax purposes.
Under the law in New Jersey, if a person dies without a Will and without children, their spouse will inherit all assets, even if they are separated from the spouse. In addition, if you have children from a previous marriage, but no Will, your separated spouse will get half your estate. Therefore, you may wish to do the following:
1) Have an Elder Law attorney prepare a Will to distribute your assets to the people you care the most about. If you already have a Will, prepare a new Will and have the old Will revoked. ( Your estate planning attorney will explain this to you.)
2) Prepare a Power of Attorney to select someone to handle your finances if you become disabled. Have your old power of attorney revoked.
3) Prepare a Living Will prepared
4) Change your beneficiary on assets you may own, such as stocks, bank accounts, IRA, and other financial assets. Change your beneficiary under your own life insurance, whether whole life insurance or term insurance.
5) Contact your human resources person and change the beneficiary on life insurance, pension, stock options or other employee benefits. Note that your spouse must sign a written waiver permitting you to change beneficiaries.
6) Keep your personal papers at a location where family can find them.
7) Have your attorney prepare a prenuptial agreement if you decide to get re-married.
8) Make sure the trustee for any funds designated for your children is the "right" trustee.
9) In New Jersey, if you are married and living with your spouse, under certain instances the surviving spouse has a right to "elect against the Will" The disinherited spouse may like to elect against the Will and try to obtain one third of the estate. Your attorney can explain how you can protect yourself and your children.
10) If you have minor children, nominate someone under a Will to serve as guardian to the children. Although the surviving parent obviously has first right of custody of children, they may not even want custody.
SAVE MONEY- Have your attorney prepare a self- proving Will with a No bond clause
Your estate will be subject to probate whether or not you have a Will and in most cases, a Will reduces the cost by eliminating the requirements of a bond. With a well-drawn Will, you may also reduce death taxes and other expenses. Don’t pinch pennies now to the detriment of your beneficiaries
The proper preparation of a Will should involve a careful analysis of the your assets, family and desires.
Estate Planning is the process of examining what will happen to your property when you die and arranging for its distribution in such a manner as will accomplish your objectives.
The cost of a Will depends on the size and the complexity of the estate and the plans of the person who makes the Will.
Be sure your Will takes into account the 2009 Federal Tax changes and any Inheritance Tax changes. Also, ascertain if your Will is “self-proving”, which would dispense with having to find the Will’s witnesses after death.
OTHER DOCUMENTS TO BE PREPARED BY YOUR ATTORNEY
-Power of Attorney- to allow a trusted person to administer your assets during your lifetime, either upon disability or now
-Living Wills- to state your wishes concerning medical care in the event of your serious illness
-Trusts (and Medicaid Trusts)
CONCLUSION
Planning can only be done if someone is competent and/or alive. Make sure your assets can be passed directly to your loved ones. Kenneth A. Vercammen is a Middlesex County trial attorney who has published 125 articles in national and New Jersey publications on litigation topics. He has been selected to lecture to trial lawyers by the American Bar Association, New Jersey State Bar Association and Middlesex County Bar Association.
Call our office to schedule a confidential appointment 732-572-0500
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com
Showing posts with label ABA ELDER LAW COMMITTEE Newsletter April. Show all posts
Showing posts with label ABA ELDER LAW COMMITTEE Newsletter April. Show all posts
Wednesday, January 13, 2010
Tuesday, January 12, 2010
Wills and Estate Planning for Dermatologists
Where there’s No Will
If you do not write a Will, the State has already written one for you. Your assets go to whoever a state law says receives the assets, or to the government itself! A Will should be a statement to the things you truly care about: your spouse, your children, your parents, your friends, your Church and charities.
If You Have No Will:
If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:
1. People you dislike or people who dislike and ignore you may get your assets.
2. State law determines who gets assets, not you
3. Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs and legal fees
4. You Lose the opportunity to try to reduce NJ Estate Tax, State inheritance taxes and Federal estate taxes
5. A Judge determines who gets custody of children. A greedy brother or crazy mother in law could ask the court for custody.
6. If you have no spouse or close relatives the State may take your property
7. The procedure to distribute assets becomes more complicated
8. It probably will cause fights and lawsuits within your family
9. If no partnership agreement or procedure to transfer patient files your medical practice “good will” could be lost.
When loved ones are grieving and dealing with death, they shouldn’t be overwhelmed with Financial concerns.
Think- Who don’t you want to receive your assets? Without a Will, they could receive your assets and request custody of children.
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? It is important to set forth distribution of a valuable property such as the “good will” of your medical practice, the phone number of a business and medical equipment you own.
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
MAY I CHANGE MY CURRENT 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.
A portion of your Will and Estate Planning can be deducted on your income tax return when it deals with tax planning. Thus, part of the fee is tax deductible for income tax purposes.
THE FOLLOWING IS A SAMPLE OF A VARIETY OF CLAUSES AND ITEMS WHICH KENNETH VERCAMMEN’S LAW OFFICE OFTEN INCLUDES 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
14TH: PRINCIPAL AND INCOME
15TH: NO ASSIGNMENT OF BEQUESTS
16TH: GENDER
17TH: CONSTRUCTION OF WILL
18TH: NO CONTEST CLAUSE
Under the law in New Jersey, if a person dies without a Will and without children, their spouse will inherit all assets, even if they are separated from the spouse. In addition, if you have children from a previous marriage, but no Will, your separated spouse will get half your estate. In planning, make sure your assets go to your loved ones or favorite charity. Therefore, you may wish to do the following:
1) Have an Elder Law attorney prepare a Will to distribute your assets to the people you care the most about. Also set forth provisions regarding receiving
the assets of your medical practice. If you already have a Will, prepare a new Will and have the old Will revoked. ( Your estate planning attorney will explain this to you.)
2) Prepare a Power of Attorney to select someone to handle your finances if you become disabled. Have your old power of attorney revoked.
3) Prepare a Living Will prepared
4) Change your beneficiary on assets you may own, such as stocks, bank accounts, IRA, and other financial assets. Change your beneficiary under your own life insurance, whether whole life insurance or term insurance.
5) Contact your employer's human resources and change the beneficiary on life insurance, pension, stock options or other employee benefits. Note that your spouse must sign a written waiver permitting you to change beneficiaries.
6) Keep your personal papers at a location where family can find them.
7) Have your attorney prepare a prenuptial agreement if you decide to get married.
8) Make sure the trustee for any funds designated for your children is the "right" trustee.
9) In New Jersey, if you are married and living with your spouse, under certain instances the surviving spouse has a right to "elect against the Will" The disinherited spouse may like to elect against the Will and try to obtain one third of the estate. Your attorney can explain how you can protect yourself and your children.
10) If you have minor children, nominate someone under a Will to serve as guardian to the children. Although the surviving parent obviously has first right of custody of children, they may not even want custody.
SAVE MONEY- Have your attorney prepare a self- proving Will with a No bond clause
Your estate will be subject to probate whether or not you have a Will and in most cases, a Will reduces the cost by eliminating the requirements of a bond. With a well-drawn Will, you may also reduce death taxes and other expenses. Don’t pinch pennies now to the detriment of your beneficiaries
The proper preparation of a Will should involve a careful analysis of the your assets, family and desires. Estate Planning is the process of examining what will happen to your property when you die and arranging for its distribution in such a manner as will accomplish your objectives.
The cost of a Will depends on the size and the complexity of the estate and the plans of the person who makes the Will.
Be sure your Will takes into account the 2009 Federal Tax changes and all New Jersey Inheritance Tax changes. Also, ascertain if your Will is “self-proving”, which would dispense with having to find the Will’s witnesses after death.
Everyone who has any assets or minor children should have a Will. You do not have to be wealthy, married, or near death to do some serious thinking about your Will.
ADMINISTRATION OF AN ESTATE
If you are named the executor or executrix, you must visit the County Surrogate to probate the Will. You will need the following items:
1. The Death Certificate
2. The Original Will
3. Names and Addresses of decedent's, next of kin and will beneficiaries
4. Minimum of $110.00 for Surrogate fees
A state inheritance tax return must be filed and the tax paid on the transfer of real or personal property within eight months after death.
CONCLUSION
Planning can only be done if someone is competent and/or alive. Make sure your assets can be passed directly to your loved ones.
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com
If you do not write a Will, the State has already written one for you. Your assets go to whoever a state law says receives the assets, or to the government itself! A Will should be a statement to the things you truly care about: your spouse, your children, your parents, your friends, your Church and charities.
If You Have No Will:
If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:
1. People you dislike or people who dislike and ignore you may get your assets.
2. State law determines who gets assets, not you
3. Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs and legal fees
4. You Lose the opportunity to try to reduce NJ Estate Tax, State inheritance taxes and Federal estate taxes
5. A Judge determines who gets custody of children. A greedy brother or crazy mother in law could ask the court for custody.
6. If you have no spouse or close relatives the State may take your property
7. The procedure to distribute assets becomes more complicated
8. It probably will cause fights and lawsuits within your family
9. If no partnership agreement or procedure to transfer patient files your medical practice “good will” could be lost.
When loved ones are grieving and dealing with death, they shouldn’t be overwhelmed with Financial concerns.
Think- Who don’t you want to receive your assets? Without a Will, they could receive your assets and request custody of children.
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? It is important to set forth distribution of a valuable property such as the “good will” of your medical practice, the phone number of a business and medical equipment you own.
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
MAY I CHANGE MY CURRENT 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.
A portion of your Will and Estate Planning can be deducted on your income tax return when it deals with tax planning. Thus, part of the fee is tax deductible for income tax purposes.
THE FOLLOWING IS A SAMPLE OF A VARIETY OF CLAUSES AND ITEMS WHICH KENNETH VERCAMMEN’S LAW OFFICE OFTEN INCLUDES 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
14TH: PRINCIPAL AND INCOME
15TH: NO ASSIGNMENT OF BEQUESTS
16TH: GENDER
17TH: CONSTRUCTION OF WILL
18TH: NO CONTEST CLAUSE
Under the law in New Jersey, if a person dies without a Will and without children, their spouse will inherit all assets, even if they are separated from the spouse. In addition, if you have children from a previous marriage, but no Will, your separated spouse will get half your estate. In planning, make sure your assets go to your loved ones or favorite charity. Therefore, you may wish to do the following:
1) Have an Elder Law attorney prepare a Will to distribute your assets to the people you care the most about. Also set forth provisions regarding receiving
the assets of your medical practice. If you already have a Will, prepare a new Will and have the old Will revoked. ( Your estate planning attorney will explain this to you.)
2) Prepare a Power of Attorney to select someone to handle your finances if you become disabled. Have your old power of attorney revoked.
3) Prepare a Living Will prepared
4) Change your beneficiary on assets you may own, such as stocks, bank accounts, IRA, and other financial assets. Change your beneficiary under your own life insurance, whether whole life insurance or term insurance.
5) Contact your employer's human resources and change the beneficiary on life insurance, pension, stock options or other employee benefits. Note that your spouse must sign a written waiver permitting you to change beneficiaries.
6) Keep your personal papers at a location where family can find them.
7) Have your attorney prepare a prenuptial agreement if you decide to get married.
8) Make sure the trustee for any funds designated for your children is the "right" trustee.
9) In New Jersey, if you are married and living with your spouse, under certain instances the surviving spouse has a right to "elect against the Will" The disinherited spouse may like to elect against the Will and try to obtain one third of the estate. Your attorney can explain how you can protect yourself and your children.
10) If you have minor children, nominate someone under a Will to serve as guardian to the children. Although the surviving parent obviously has first right of custody of children, they may not even want custody.
SAVE MONEY- Have your attorney prepare a self- proving Will with a No bond clause
Your estate will be subject to probate whether or not you have a Will and in most cases, a Will reduces the cost by eliminating the requirements of a bond. With a well-drawn Will, you may also reduce death taxes and other expenses. Don’t pinch pennies now to the detriment of your beneficiaries
The proper preparation of a Will should involve a careful analysis of the your assets, family and desires. Estate Planning is the process of examining what will happen to your property when you die and arranging for its distribution in such a manner as will accomplish your objectives.
The cost of a Will depends on the size and the complexity of the estate and the plans of the person who makes the Will.
Be sure your Will takes into account the 2009 Federal Tax changes and all New Jersey Inheritance Tax changes. Also, ascertain if your Will is “self-proving”, which would dispense with having to find the Will’s witnesses after death.
Everyone who has any assets or minor children should have a Will. You do not have to be wealthy, married, or near death to do some serious thinking about your Will.
ADMINISTRATION OF AN ESTATE
If you are named the executor or executrix, you must visit the County Surrogate to probate the Will. You will need the following items:
1. The Death Certificate
2. The Original Will
3. Names and Addresses of decedent's, next of kin and will beneficiaries
4. Minimum of $110.00 for Surrogate fees
A state inheritance tax return must be filed and the tax paid on the transfer of real or personal property within eight months after death.
CONCLUSION
Planning can only be done if someone is competent and/or alive. Make sure your assets can be passed directly to your loved ones.
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com
Wills and Estate Planning for Dermatologists
Where there’s No Will
If you do not write a Will, the State has already written one for you. Your assets go to whoever a state law says receives the assets, or to the government itself! A Will should be a statement to the things you truly care about: your spouse, your children, your parents, your friends, your Church and charities.
If You Have No Will:
If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:
1. People you dislike or people who dislike and ignore you may get your assets.
2. State law determines who gets assets, not you
3. Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs and legal fees
4. You Lose the opportunity to try to reduce NJ Estate Tax, State inheritance taxes and Federal estate taxes
5. A Judge determines who gets custody of children. A greedy brother or crazy mother in law could ask the court for custody.
6. If you have no spouse or close relatives the State may take your property
7. The procedure to distribute assets becomes more complicated
8. It probably will cause fights and lawsuits within your family
9. If no partnership agreement or procedure to transfer patient files your medical practice “good will” could be lost.
When loved ones are grieving and dealing with death, they shouldn’t be overwhelmed with Financial concerns.
Think- Who don’t you want to receive your assets? Without a Will, they could receive your assets and request custody of children.
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? It is important to set forth distribution of a valuable property such as the “good will” of your medical practice, the phone number of a business and medical equipment you own.
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
MAY I CHANGE MY CURRENT 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.
A portion of your Will and Estate Planning can be deducted on your income tax return when it deals with tax planning. Thus, part of the fee is tax deductible for income tax purposes.
THE FOLLOWING IS A SAMPLE OF A VARIETY OF CLAUSES AND ITEMS WHICH KENNETH VERCAMMEN’S LAW OFFICE OFTEN INCLUDES 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
14TH: PRINCIPAL AND INCOME
15TH: NO ASSIGNMENT OF BEQUESTS
16TH: GENDER
17TH: CONSTRUCTION OF WILL
18TH: NO CONTEST CLAUSE
Under the law in New Jersey, if a person dies without a Will and without children, their spouse will inherit all assets, even if they are separated from the spouse. In addition, if you have children from a previous marriage, but no Will, your separated spouse will get half your estate. In planning, make sure your assets go to your loved ones or favorite charity. Therefore, you may wish to do the following:
1) Have an Elder Law attorney prepare a Will to distribute your assets to the people you care the most about. Also set forth provisions regarding receiving
the assets of your medical practice. If you already have a Will, prepare a new Will and have the old Will revoked. ( Your estate planning attorney will explain this to you.)
2) Prepare a Power of Attorney to select someone to handle your finances if you become disabled. Have your old power of attorney revoked.
3) Prepare a Living Will prepared
4) Change your beneficiary on assets you may own, such as stocks, bank accounts, IRA, and other financial assets. Change your beneficiary under your own life insurance, whether whole life insurance or term insurance.
5) Contact your employer's human resources and change the beneficiary on life insurance, pension, stock options or other employee benefits. Note that your spouse must sign a written waiver permitting you to change beneficiaries.
6) Keep your personal papers at a location where family can find them.
7) Have your attorney prepare a prenuptial agreement if you decide to get married.
8) Make sure the trustee for any funds designated for your children is the "right" trustee.
9) In New Jersey, if you are married and living with your spouse, under certain instances the surviving spouse has a right to "elect against the Will" The disinherited spouse may like to elect against the Will and try to obtain one third of the estate. Your attorney can explain how you can protect yourself and your children.
10) If you have minor children, nominate someone under a Will to serve as guardian to the children. Although the surviving parent obviously has first right of custody of children, they may not even want custody.
SAVE MONEY- Have your attorney prepare a self- proving Will with a No bond clause
Your estate will be subject to probate whether or not you have a Will and in most cases, a Will reduces the cost by eliminating the requirements of a bond. With a well-drawn Will, you may also reduce death taxes and other expenses. Don’t pinch pennies now to the detriment of your beneficiaries
The proper preparation of a Will should involve a careful analysis of the your assets, family and desires. Estate Planning is the process of examining what will happen to your property when you die and arranging for its distribution in such a manner as will accomplish your objectives.
The cost of a Will depends on the size and the complexity of the estate and the plans of the person who makes the Will.
Be sure your Will takes into account the 2009 Federal Tax changes and all New Jersey Inheritance Tax changes. Also, ascertain if your Will is “self-proving”, which would dispense with having to find the Will’s witnesses after death.
Everyone who has any assets or minor children should have a Will. You do not have to be wealthy, married, or near death to do some serious thinking about your Will.
ADMINISTRATION OF AN ESTATE
If you are named the executor or executrix, you must visit the County Surrogate to probate the Will. You will need the following items:
1. The Death Certificate
2. The Original Will
3. Names and Addresses of decedent's, next of kin and will beneficiaries
4. Minimum of $110.00 for Surrogate fees
A state inheritance tax return must be filed and the tax paid on the transfer of real or personal property within eight months after death.
CONCLUSION
Planning can only be done if someone is competent and/or alive. Make sure your assets can be passed directly to your loved ones.
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com
Wednesday, April 25, 2007
ABA ELDER LAW COMMITTEE Newsletter April, 2007
ABA General Practice, Solo and Small Firm Division
Chairs - Kenneth Vercammen, Edison, NJ and Jay Foonberg, Beverly
Hills, CA
In this issue:
ABA Elder Law Committee meeting
Friday, May 11, 2007 12:10- 1pm
Washington Court Hotel, Chair's Suite
1. ESTATE RECOVERY IN MEDICAID
2. Yearly Insurance Review
3. Effective Business Succession Planning
_____________________________
ABA Elder Law Committee meeting
Friday, May 11, 2007 12:10- 1pm
Washington Court Hotel, Chair's Suite
Topic: Elder Law Practice- Changes in the law and ideas to Improve
Your Practice by Giving Clients What They Want and Need, plus
Marketing and Expanding an Elder Law Practice
American Bar Association General Practice Section, Elder Law
Committee
Chairs/ Speakers:
Jay Foonberg, Beverly Hills, CA
-Kenneth A. Vercammen, Esq. , Edison, NJ Chair- Elder Law
Committee
If you are attending, email Kenneth Vercammen, Esq. at
Kenv@njlaws.com
Elder Law may be the biggest practice area of your career. 50,000
baby boomers/ day turning 60 and soon to be on Medicaid and
needing your help.
Topics:
New Medicaid Law 2006- Protect yourself from inaccurate advice and
malpractice
Getting referrals from other professionals
The aftermath of the Terry Schiavo case.
Email newsletters
How to get more referrals and repeat business
How to manage telephone conversations with your clients
Marketing with written fee agreements
-Networking the Internet without backlash
-Ethics and marketing without violating the Rules of Professional
Conduct
[Contact Kenneth Vercammen, Esq. for program information
732-572-0500]
1. ESTATE RECOVERY IN MEDICAID
By: Thomas. D. Begley, Jr., Esquire
A state is entitled to recover for Medicaid payments correctly paid on
behalf of the individual by use or real or personal property liens and
recovery from decedents’ estates. 42 U.S.C. § 1396p(b)(1)(B); HCFA
Transmittal 63; N.J.S.A. 30:4D-7.2 et seq.; N.J.A.C. 10:49-1 et seq.
The state is required to seek reimbursement from an individual’s
estate for the cost of nursing facility services. 42 U.S.C. §
1396p(b)(1)(B). However, no recovery may be made until after the
death of the recipient’s surviving spouse, and only when there are no
surviving children who are under age 21 or blind or permanently
disabled.
A. Definition of Estate. New Jersey seeks recovery from estates of
deceased individuals. While federal law only requires that states
recover from the probate estate of the deceased Medicaid recipient,
New Jersey has elected to expand the definition of an estate as
follows:
“Estate includes all real and personal property and other assets
included in the recipient’s estate as defined at N.J.S. 3B:1-1, as well
as any other real or personal property and other assets in which the
recipient had any legal title or interest at the time of death, to the extent
of that interest, including assets conveyed to a survivor, heir or assign
of the recipient through joint tenancy, tenancy in common,
survivorship, life estate, living trust or other arrangement.”
B. Age 55. With respect to an institutional level of care, estate
recovery applies to all Medicaid payments made or services received
after an individual is 55 years of age or older. N.J.A.C. 10:49-14.1(c).
Under federal and state law, in the case of a recipient who became
deceased on or after April 1, 1995 for whom a Medicaid payment was
made on or after October 1, 1993, a lien may be filed against, and
recovery sought, from the estate of a deceased recipient for
assistance correctly paid or to be paid on his behalf for all services
received when he was 55 years of age or older. 42 U.S.C. § 1396p(b);
N.J.A.C. 10:49-14.1(c).
C. De minimus Amounts. Under N.J.A.C. 30:4D-7.2a, recovery
cannot be made against the estate of a deceased recipient if the
amount sought is less than $500 or the gross estate of the deceased
recipient is less than $3,000.
D. Surviving Spouse or Child under 21 or Blind or Disabled. No
recovery shall be made if there is a surviving spouse or a surviving
child who is under the age of 21 or is blind or permanently and totally
disabled, except for assistance incorrectly or illegally paid or for third
party liability recovery. These exceptions to estate recovery are also
incorporated in N.J.A.C. 10:49-14.1(a).
E. PAAD. No estate recovery shall be made under the
Pharmaceutical Assistance to the Aged and Disabled program
(PAAD), unless the assistance was incorrectly or illegally paid.
F. Life Estates/Trusts.
• Life Estate. Life estates that expire upon the Medicaid beneficiary’s
death are exempt from estate recovery. N.J.A.C. 10:49-14.1(n)(1).
• Inter Vivos Trust. An inter vivos trust established by a third party for
the benefit of a deceased Medicaid recipient is not subject to estate
recovery provided that the Medicaid recipient could not compel
distributions from the trust and the trust contains no assets in which
the Medicaid beneficiary held any interest within either five (5) years
prior to applying for Medicaid benefits or five (5) years prior to the
Medicaid recipient’s death. N.J.A.C. 10:49-14.1(n)(2).
• Testamentary Trust. Testamentary trusts are exempt from estate
recovery provided that the Medicaid recipient could not compel
distribution and the trust contains no assets in which the Medicaid
recipient held an interest within either five (5) years prior to applying for
Medicaid benefits or five (5) years prior to the recipient’s death.
Assets of the community spouse which formed a part of the
Community Spouse Resource Allowance shall not be considered
assets of the Medicaid recipient. Any assets of the community spouse
other than those that formed part of the CSRA allowance are
considered assets of the Medicaid recipient if acquired from the
Medicaid recipient with five (5) years prior to the date of application for
the Medicaid benefits or five (5) years prior to the date of the death of
the Medicaid beneficiary. It is believed that the reference to assets
acquired from the Medicaid recipient means assets acquired from the
Medicaid recipient’s spouse.
G. Tracing. N.J.A.C. 10:49-14.1(l) makes clear that estate recovery
may be sought from trusts and annuities, even if established by a third
party. This applies to living trusts and testamentary trusts if the assets
in the trust belonged to the Medicaid beneficiary as of five years prior
to the beneficiary’s death. N.J.A.C. 10:49-14.1(n). This provision may
be invalid since it appears to be more restrictive than either the federal
or state statute, which limits recovery to “living trusts.” However, in
DeMartino v. Division of Medical Assistance and Health Services, 373
N.J. Super. 210 (App. Div. 2004), the court held that such a trust was
subject to Medicaid estate recovery.
H. Spouse. New Jersey’s current regulations exempt the estate of
the spouse from recovery. N.J.A.C. 10:49-14.1(n).
An issue arises as to whether a state may recover from the estate of a
spouse of a deceased Medicaid recipient. In the case of Wisconsin v.
Estate of Budney, 197 NW 2d 245 (Wis. Ct. App. 1995), the court held
that the Wisconsin statute authorizing recovery from the spouse of a
deceased Medicaid recipient is invalid. In a California case, Demille v.
Bleshe, 1995 WL 23636 (N.D. Cal. 1995), the court held that the state
was free to impose liens on property of the deceased Medicaid
recipient, after the recipient is dead, and that those liens become
payable upon the death of the surviving spouse or upon sale of the
property.
New Jersey has a policy of not forcing a sale while any family
member is still living in the house. This is documented in N.J.A.C.
10:49-14.1(j). Recoveries will not be pursued against property held by
bona fide purchasers. N.J.A.C. 10:49-14.1(k).
There may be an issue as to whether Medicaid can recover for
payments made on behalf of the deceased Medicaid recipient prior to
December 23, 1995, which is the effective date of the New Jersey
statute.
New Jersey will exempt assets from estate recovery on a hardship
basis only if the asset is the sole income-producing asset of the
survivor, and recovery by the state would result in the survivor
becoming a beneficiary of public benefits himself or herself. Thus,
New Jersey’s tentative definition of “hardship” is very rigid. There is
also a rebuttable presumption in New Jersey that there is no hardship
if Medicaid planning was effected. N.J.A.C. 10:49-14.1(h). The
representative of the estate of the Medicaid recipient has 20 days from
the date of receipt of the notice of the State’s lien to file a request for a
waiver or compromise of the claim.
Begley & Bookbinder, P.C. is an Elder & Disability Law Firm with
offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey
and can be contacted at 800-533-7227. The firm services southern
and central New Jersey and eastern Pennsylvania.
______________________
2. Yearly Insurance Review
By Ray Pavese & Mike McCormick
Every year you should review your insurance policies to make sure
you still have a policy that
meets your needs, as well as the needs of your family members and
loved ones.
One of the policies that most often gets overlooked is the life
insurance policy. Since this is often a long-term policy, most
insured individuals assume they are stuck with the same policy,
no matter what. Usually this is not the case, although it will
depend on your policy and company as to whether you receive
penalties when changing your insurance.
Even if penalties occur, changing your life insurance policy may
be essential to keeping up with your family's financial needs for
the future.
If you don't review your life insurance policy every year, you
should at least review your policy under these circumstances:
* Marriage/Divorce - Needs change depending on your marital
status. Keep this in mind as things change in your life. Even if
you don't want to change the value of your policy, you probably
want to change the beneficiary.
* Children - If you ask the majority of life insurance agents,
the major reason for changing a life insurance policy is because
of children. This is because many adults never believe they will
need extra money after death until they realize that they will
have someone preceding them in death. Children will need money
for basic food and shelter until they are 18 and possibly for a
future college fund as well. Keep that in mind, and tell others
you know that may be affected.
* An Illness - Although waiting to change your insurance policy
until you have a long-term illness will mean paying higher
premiums, it is best to at least review your policy limitations
and make necessary changes if you find out you have a potentially
life threatening illness.
If you have questions regarding a change you would like to make
on your life insurance policy, feel free to contact me anytime.
Sincerely,
Ray Pavese & Mike McCormick
Pavese-McCormick Agency, Inc.
mikem@pavesemccormick.com
______________________________
3. Effective Business Succession Planning
By Saul Simon
Business owners invest significant amounts of time and financial
resources to make their enterprises successful. Quite often, due to
the quick pace of day-to-day operations, planning for succession of
ownership is relegated to a low-priority task. But there comes a point
in the life cycle of any business when the owner is no longer able to
manage the firm that he or she founded.
Because the timing of death or disability is difficult to predict, it’s
prudent to have a succession plan in place now to safeguard your
family’s financial well being, and to provide your business with
leadership during a transition period.
A Family Affair?
One logical solution—and one that most entrepreneurs may want to
choose—is to turn the reins over to their children. However, despite its
emotional and intuitive appeal, the odds are stacked squarely against
a business surviving a transfer down the bloodline.
According to the U.S. Small Business Administration, two-thirds of
family-run enterprises fail to make the successful transition to a
second generation of ownership, and less than 15% survive into the
third generation. Making a successful transition even trickier are
issues brought on by divorce, blended families, or rivalries among
children.
The best course of action may be either to identify strong candidates
within your company who can continue to run the business and
provide a source of financial security for your family, or to look at the
potential for selling the business to an outside party.
“You have to be realistic,” says Jack Kaewpalug, Certified Financial
PlannerTM Practitioner with Lincoln Financial Advisors Corp. in Irvine,
Calif. “If you’re the person who is responsible for 80% of the firm’s
sales, you’ll need to identify somebody who can assume that role if
you want to keep the operation going.”
Transitional Steps
Whichever course you eventually decide is right for your business,
there are steps you can take now that will ease the transition.
* Groom new management. Who is best able to run the business in
your absence? Perhaps your children have spent years growing up in
the business and have become capable managers in their own right.
If not, look to your existing management team, and make your
intentions known. Be sure that candidates are capable and interested
in taking over.
* Determine a value. Work with a valuation specialist to get a fair
assessment of what your business might be worth. While valuation
analysis may be an art as much as it is a science, you should place a
value on your business in the event you decide to sell. There are
several valuation methods, including book value, discounted cash
flow, or you could hire a professional appraiser. If you decide to
transfer the business to your children, a professional appraisal is
generally required to withstand IRS scrutiny.
* Draft a buy-sell agreement. Depending on the structure of
ownership, this document will be a binding agreement detailing the
terms of ownership transfer between you and your offspring, you and a
non-family successor, or you and your partners. Be sure to specify
how the agreement will be funded. “Proceeds from a life insurance
policy are frequently used as a way to fund a buy-sell arrangement,”
says Kaewpalug, “Other options include loans from a bank or
company earnings that are paid back through an ‘earn-out’
arrangement with your successor, whereby the loan is paid back in
regular installments.
* ESOPs. If you have a large number of employees, another option is
an Employee Stock Ownership Plan (ESOP), whereby a bank lends
money to the ESOP to purchase your interest in the business, and the
employees then buy the shares through regular payroll deductions.
Planning for succession can be an unpleasant task, although the
outcome can be even more unpleasant if you fail to plan. “You’ll have a
lot more options if you start to plan when things are going great,” says
Kaewpalug. “What you don’t want is a situation where your family is
scrambling to salvage some value from the business after you’re
gone.”
Simon Financial Group
399 Thornall Street, 12th Floor
Edison, NJ 08837
Phone: (732)623.2078
Fax: (732)623.2088
www.saulsimon.com
Your Editor Kenneth Vercammen, Edison Attorney was selected a
2007 NJ Super Lawyer in the Criminal Law- DWI section for the
second year in a row. Of over 79,00 attorneys in New Jersey, only three
were selected as Super Lawyers in the Criminal Law- DWI category.
HOW SUPER LAWYERS ARE SELECTED
Law & Politics performs the polling, research and selection of
Super Lawyers in a process designed to identify lawyers who have
attained a high degree of peer recognition and professional
achievement. Super Lawyers is a comprehensive and diverse listing
of outstanding attorneys, representing a wide range of practice areas,
firm sizes and geographic locations. Only 5 percent of the lawyers in
each state or region are named Super Lawyers
http://www.njlaws.com/superlawyer.htm
_____________________________
Send us your articles & ideas
To help your practice, we feature in this newsletter edition a few
articles and tips on marketing and improving service to clients. But
your Editor and chairs can't do it all. Please send articles, suggestions
or ideas you wish to share with others.
General Practice, Solo and Small Firm Division:
Elder Law Committee and the ESTATE PLANNING, PROBATE &
TRUST COMMITTEE
Who We Are
This committee focuses on improving estate planning skills,
substantive law knowledge and office procedures for the attorney who
practices estate planning, probate and trust law. This committee also
serves as a network resource in educating attorneys regarding Elder
Law situations.
To help your practice, we feature in this newsletter edition a few
articles and tips on marketing and improving service to clients. But
your Editor and chairs can't do it all. Please send articles, suggestions
or ideas you wish to share with others.
Let us know if you are finding any useful information or anything
you can share with the other members. You will receive written credit
as the source and thus you can advise your clients and friends you
were published in an ABA publication. We will try to meet you needs.
We also seek articles on Elder Law, Probate, Wills, Medicaid and
Marketing. Please send your marketing ideas and articles to us. You
can become a published ABA author.
________________________________________
The Elder Law Committee of the ABA General Practice Division is
directed towards general practitioners and more experienced elder
law attorneys. The committee consistently sponsors programs at the
Annual Meeting, the focus of which is shifting to advanced topics for
the more experienced elder lawyer.
This committee also focuses on improving estate planning skills,
substantive law knowledge and office procedures for the attorney who
practices estate planning, probate and trust law. This committee also
serves as a network resource in educating attorneys regarding Elder
Law situations.
Kenneth Vercammen, Esq. co-Chair
Jay Foonberg, Beverly Hills Co-chair, Author of Best Sellers "How to
Start and Build a Law Practice" and "How to get and keep good
clients', Beverly Hills, CA jayfoonberg@aol.com>
Jay Foonberg
Please Note New Mailing Address:
9461 Charleville Blvd., #416
Beverly Hills, CA. 90212-3017
Same Tel: 310-652-5010
Same Fax: 310-652-5019
We will also provide tips on how to promote your law office, your
practice and Personal Marketing Skills in general. It does not deal with
government funded "legal services" for indigent, welfare cases.
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
Kenv@njlaws.com
ABA General Practice, Solo and Small Firm Division
Chairs - Kenneth Vercammen, Edison, NJ and Jay Foonberg, Beverly
Hills, CA
In this issue:
ABA Elder Law Committee meeting
Friday, May 11, 2007 12:10- 1pm
Washington Court Hotel, Chair's Suite
1. ESTATE RECOVERY IN MEDICAID
2. Yearly Insurance Review
3. Effective Business Succession Planning
_____________________________
ABA Elder Law Committee meeting
Friday, May 11, 2007 12:10- 1pm
Washington Court Hotel, Chair's Suite
Topic: Elder Law Practice- Changes in the law and ideas to Improve
Your Practice by Giving Clients What They Want and Need, plus
Marketing and Expanding an Elder Law Practice
American Bar Association General Practice Section, Elder Law
Committee
Chairs/ Speakers:
Jay Foonberg, Beverly Hills, CA
-Kenneth A. Vercammen, Esq. , Edison, NJ Chair- Elder Law
Committee
If you are attending, email Kenneth Vercammen, Esq. at
Kenv@njlaws.com
Elder Law may be the biggest practice area of your career. 50,000
baby boomers/ day turning 60 and soon to be on Medicaid and
needing your help.
Topics:
New Medicaid Law 2006- Protect yourself from inaccurate advice and
malpractice
Getting referrals from other professionals
The aftermath of the Terry Schiavo case.
Email newsletters
How to get more referrals and repeat business
How to manage telephone conversations with your clients
Marketing with written fee agreements
-Networking the Internet without backlash
-Ethics and marketing without violating the Rules of Professional
Conduct
[Contact Kenneth Vercammen, Esq. for program information
732-572-0500]
1. ESTATE RECOVERY IN MEDICAID
By: Thomas. D. Begley, Jr., Esquire
A state is entitled to recover for Medicaid payments correctly paid on
behalf of the individual by use or real or personal property liens and
recovery from decedents’ estates. 42 U.S.C. § 1396p(b)(1)(B); HCFA
Transmittal 63; N.J.S.A. 30:4D-7.2 et seq.; N.J.A.C. 10:49-1 et seq.
The state is required to seek reimbursement from an individual’s
estate for the cost of nursing facility services. 42 U.S.C. §
1396p(b)(1)(B). However, no recovery may be made until after the
death of the recipient’s surviving spouse, and only when there are no
surviving children who are under age 21 or blind or permanently
disabled.
A. Definition of Estate. New Jersey seeks recovery from estates of
deceased individuals. While federal law only requires that states
recover from the probate estate of the deceased Medicaid recipient,
New Jersey has elected to expand the definition of an estate as
follows:
“Estate includes all real and personal property and other assets
included in the recipient’s estate as defined at N.J.S. 3B:1-1, as well
as any other real or personal property and other assets in which the
recipient had any legal title or interest at the time of death, to the extent
of that interest, including assets conveyed to a survivor, heir or assign
of the recipient through joint tenancy, tenancy in common,
survivorship, life estate, living trust or other arrangement.”
B. Age 55. With respect to an institutional level of care, estate
recovery applies to all Medicaid payments made or services received
after an individual is 55 years of age or older. N.J.A.C. 10:49-14.1(c).
Under federal and state law, in the case of a recipient who became
deceased on or after April 1, 1995 for whom a Medicaid payment was
made on or after October 1, 1993, a lien may be filed against, and
recovery sought, from the estate of a deceased recipient for
assistance correctly paid or to be paid on his behalf for all services
received when he was 55 years of age or older. 42 U.S.C. § 1396p(b);
N.J.A.C. 10:49-14.1(c).
C. De minimus Amounts. Under N.J.A.C. 30:4D-7.2a, recovery
cannot be made against the estate of a deceased recipient if the
amount sought is less than $500 or the gross estate of the deceased
recipient is less than $3,000.
D. Surviving Spouse or Child under 21 or Blind or Disabled. No
recovery shall be made if there is a surviving spouse or a surviving
child who is under the age of 21 or is blind or permanently and totally
disabled, except for assistance incorrectly or illegally paid or for third
party liability recovery. These exceptions to estate recovery are also
incorporated in N.J.A.C. 10:49-14.1(a).
E. PAAD. No estate recovery shall be made under the
Pharmaceutical Assistance to the Aged and Disabled program
(PAAD), unless the assistance was incorrectly or illegally paid.
F. Life Estates/Trusts.
• Life Estate. Life estates that expire upon the Medicaid beneficiary’s
death are exempt from estate recovery. N.J.A.C. 10:49-14.1(n)(1).
• Inter Vivos Trust. An inter vivos trust established by a third party for
the benefit of a deceased Medicaid recipient is not subject to estate
recovery provided that the Medicaid recipient could not compel
distributions from the trust and the trust contains no assets in which
the Medicaid beneficiary held any interest within either five (5) years
prior to applying for Medicaid benefits or five (5) years prior to the
Medicaid recipient’s death. N.J.A.C. 10:49-14.1(n)(2).
• Testamentary Trust. Testamentary trusts are exempt from estate
recovery provided that the Medicaid recipient could not compel
distribution and the trust contains no assets in which the Medicaid
recipient held an interest within either five (5) years prior to applying for
Medicaid benefits or five (5) years prior to the recipient’s death.
Assets of the community spouse which formed a part of the
Community Spouse Resource Allowance shall not be considered
assets of the Medicaid recipient. Any assets of the community spouse
other than those that formed part of the CSRA allowance are
considered assets of the Medicaid recipient if acquired from the
Medicaid recipient with five (5) years prior to the date of application for
the Medicaid benefits or five (5) years prior to the date of the death of
the Medicaid beneficiary. It is believed that the reference to assets
acquired from the Medicaid recipient means assets acquired from the
Medicaid recipient’s spouse.
G. Tracing. N.J.A.C. 10:49-14.1(l) makes clear that estate recovery
may be sought from trusts and annuities, even if established by a third
party. This applies to living trusts and testamentary trusts if the assets
in the trust belonged to the Medicaid beneficiary as of five years prior
to the beneficiary’s death. N.J.A.C. 10:49-14.1(n). This provision may
be invalid since it appears to be more restrictive than either the federal
or state statute, which limits recovery to “living trusts.” However, in
DeMartino v. Division of Medical Assistance and Health Services, 373
N.J. Super. 210 (App. Div. 2004), the court held that such a trust was
subject to Medicaid estate recovery.
H. Spouse. New Jersey’s current regulations exempt the estate of
the spouse from recovery. N.J.A.C. 10:49-14.1(n).
An issue arises as to whether a state may recover from the estate of a
spouse of a deceased Medicaid recipient. In the case of Wisconsin v.
Estate of Budney, 197 NW 2d 245 (Wis. Ct. App. 1995), the court held
that the Wisconsin statute authorizing recovery from the spouse of a
deceased Medicaid recipient is invalid. In a California case, Demille v.
Bleshe, 1995 WL 23636 (N.D. Cal. 1995), the court held that the state
was free to impose liens on property of the deceased Medicaid
recipient, after the recipient is dead, and that those liens become
payable upon the death of the surviving spouse or upon sale of the
property.
New Jersey has a policy of not forcing a sale while any family
member is still living in the house. This is documented in N.J.A.C.
10:49-14.1(j). Recoveries will not be pursued against property held by
bona fide purchasers. N.J.A.C. 10:49-14.1(k).
There may be an issue as to whether Medicaid can recover for
payments made on behalf of the deceased Medicaid recipient prior to
December 23, 1995, which is the effective date of the New Jersey
statute.
New Jersey will exempt assets from estate recovery on a hardship
basis only if the asset is the sole income-producing asset of the
survivor, and recovery by the state would result in the survivor
becoming a beneficiary of public benefits himself or herself. Thus,
New Jersey’s tentative definition of “hardship” is very rigid. There is
also a rebuttable presumption in New Jersey that there is no hardship
if Medicaid planning was effected. N.J.A.C. 10:49-14.1(h). The
representative of the estate of the Medicaid recipient has 20 days from
the date of receipt of the notice of the State’s lien to file a request for a
waiver or compromise of the claim.
Begley & Bookbinder, P.C. is an Elder & Disability Law Firm with
offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey
and can be contacted at 800-533-7227. The firm services southern
and central New Jersey and eastern Pennsylvania.
______________________
2. Yearly Insurance Review
By Ray Pavese & Mike McCormick
Every year you should review your insurance policies to make sure
you still have a policy that
meets your needs, as well as the needs of your family members and
loved ones.
One of the policies that most often gets overlooked is the life
insurance policy. Since this is often a long-term policy, most
insured individuals assume they are stuck with the same policy,
no matter what. Usually this is not the case, although it will
depend on your policy and company as to whether you receive
penalties when changing your insurance.
Even if penalties occur, changing your life insurance policy may
be essential to keeping up with your family's financial needs for
the future.
If you don't review your life insurance policy every year, you
should at least review your policy under these circumstances:
* Marriage/Divorce - Needs change depending on your marital
status. Keep this in mind as things change in your life. Even if
you don't want to change the value of your policy, you probably
want to change the beneficiary.
* Children - If you ask the majority of life insurance agents,
the major reason for changing a life insurance policy is because
of children. This is because many adults never believe they will
need extra money after death until they realize that they will
have someone preceding them in death. Children will need money
for basic food and shelter until they are 18 and possibly for a
future college fund as well. Keep that in mind, and tell others
you know that may be affected.
* An Illness - Although waiting to change your insurance policy
until you have a long-term illness will mean paying higher
premiums, it is best to at least review your policy limitations
and make necessary changes if you find out you have a potentially
life threatening illness.
If you have questions regarding a change you would like to make
on your life insurance policy, feel free to contact me anytime.
Sincerely,
Ray Pavese & Mike McCormick
Pavese-McCormick Agency, Inc.
mikem@pavesemccormick.com
______________________________
3. Effective Business Succession Planning
By Saul Simon
Business owners invest significant amounts of time and financial
resources to make their enterprises successful. Quite often, due to
the quick pace of day-to-day operations, planning for succession of
ownership is relegated to a low-priority task. But there comes a point
in the life cycle of any business when the owner is no longer able to
manage the firm that he or she founded.
Because the timing of death or disability is difficult to predict, it’s
prudent to have a succession plan in place now to safeguard your
family’s financial well being, and to provide your business with
leadership during a transition period.
A Family Affair?
One logical solution—and one that most entrepreneurs may want to
choose—is to turn the reins over to their children. However, despite its
emotional and intuitive appeal, the odds are stacked squarely against
a business surviving a transfer down the bloodline.
According to the U.S. Small Business Administration, two-thirds of
family-run enterprises fail to make the successful transition to a
second generation of ownership, and less than 15% survive into the
third generation. Making a successful transition even trickier are
issues brought on by divorce, blended families, or rivalries among
children.
The best course of action may be either to identify strong candidates
within your company who can continue to run the business and
provide a source of financial security for your family, or to look at the
potential for selling the business to an outside party.
“You have to be realistic,” says Jack Kaewpalug, Certified Financial
PlannerTM Practitioner with Lincoln Financial Advisors Corp. in Irvine,
Calif. “If you’re the person who is responsible for 80% of the firm’s
sales, you’ll need to identify somebody who can assume that role if
you want to keep the operation going.”
Transitional Steps
Whichever course you eventually decide is right for your business,
there are steps you can take now that will ease the transition.
* Groom new management. Who is best able to run the business in
your absence? Perhaps your children have spent years growing up in
the business and have become capable managers in their own right.
If not, look to your existing management team, and make your
intentions known. Be sure that candidates are capable and interested
in taking over.
* Determine a value. Work with a valuation specialist to get a fair
assessment of what your business might be worth. While valuation
analysis may be an art as much as it is a science, you should place a
value on your business in the event you decide to sell. There are
several valuation methods, including book value, discounted cash
flow, or you could hire a professional appraiser. If you decide to
transfer the business to your children, a professional appraisal is
generally required to withstand IRS scrutiny.
* Draft a buy-sell agreement. Depending on the structure of
ownership, this document will be a binding agreement detailing the
terms of ownership transfer between you and your offspring, you and a
non-family successor, or you and your partners. Be sure to specify
how the agreement will be funded. “Proceeds from a life insurance
policy are frequently used as a way to fund a buy-sell arrangement,”
says Kaewpalug, “Other options include loans from a bank or
company earnings that are paid back through an ‘earn-out’
arrangement with your successor, whereby the loan is paid back in
regular installments.
* ESOPs. If you have a large number of employees, another option is
an Employee Stock Ownership Plan (ESOP), whereby a bank lends
money to the ESOP to purchase your interest in the business, and the
employees then buy the shares through regular payroll deductions.
Planning for succession can be an unpleasant task, although the
outcome can be even more unpleasant if you fail to plan. “You’ll have a
lot more options if you start to plan when things are going great,” says
Kaewpalug. “What you don’t want is a situation where your family is
scrambling to salvage some value from the business after you’re
gone.”
Simon Financial Group
399 Thornall Street, 12th Floor
Edison, NJ 08837
Phone: (732)623.2078
Fax: (732)623.2088
www.saulsimon.com
Your Editor Kenneth Vercammen, Edison Attorney was selected a
2007 NJ Super Lawyer in the Criminal Law- DWI section for the
second year in a row. Of over 79,00 attorneys in New Jersey, only three
were selected as Super Lawyers in the Criminal Law- DWI category.
HOW SUPER LAWYERS ARE SELECTED
Law & Politics performs the polling, research and selection of
Super Lawyers in a process designed to identify lawyers who have
attained a high degree of peer recognition and professional
achievement. Super Lawyers is a comprehensive and diverse listing
of outstanding attorneys, representing a wide range of practice areas,
firm sizes and geographic locations. Only 5 percent of the lawyers in
each state or region are named Super Lawyers
http://www.njlaws.com/superlawyer.htm
_____________________________
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To help your practice, we feature in this newsletter edition a few
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your Editor and chairs can't do it all. Please send articles, suggestions
or ideas you wish to share with others.
General Practice, Solo and Small Firm Division:
Elder Law Committee and the ESTATE PLANNING, PROBATE &
TRUST COMMITTEE
Who We Are
This committee focuses on improving estate planning skills,
substantive law knowledge and office procedures for the attorney who
practices estate planning, probate and trust law. This committee also
serves as a network resource in educating attorneys regarding Elder
Law situations.
To help your practice, we feature in this newsletter edition a few
articles and tips on marketing and improving service to clients. But
your Editor and chairs can't do it all. Please send articles, suggestions
or ideas you wish to share with others.
Let us know if you are finding any useful information or anything
you can share with the other members. You will receive written credit
as the source and thus you can advise your clients and friends you
were published in an ABA publication. We will try to meet you needs.
We also seek articles on Elder Law, Probate, Wills, Medicaid and
Marketing. Please send your marketing ideas and articles to us. You
can become a published ABA author.
________________________________________
The Elder Law Committee of the ABA General Practice Division is
directed towards general practitioners and more experienced elder
law attorneys. The committee consistently sponsors programs at the
Annual Meeting, the focus of which is shifting to advanced topics for
the more experienced elder lawyer.
This committee also focuses on improving estate planning skills,
substantive law knowledge and office procedures for the attorney who
practices estate planning, probate and trust law. This committee also
serves as a network resource in educating attorneys regarding Elder
Law situations.
Kenneth Vercammen, Esq. co-Chair
Jay Foonberg, Beverly Hills Co-chair, Author of Best Sellers "How to
Start and Build a Law Practice" and "How to get and keep good
clients', Beverly Hills, CA jayfoonberg@aol.com>
Jay Foonberg
Please Note New Mailing Address:
9461 Charleville Blvd., #416
Beverly Hills, CA. 90212-3017
Same Tel: 310-652-5010
Same Fax: 310-652-5019
We will also provide tips on how to promote your law office, your
practice and Personal Marketing Skills in general. It does not deal with
government funded "legal services" for indigent, welfare cases.
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
Kenv@njlaws.com
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