Archive for January, 2009

Where has or will Mr. Niemann be speaking on topics of interest to you

Wednesday, January 28th, 2009

Fredrick P. Niemann, Esq. was recently the featured speaker in Colts Neck, NJ at a seminar entitled Investments & Estate Planning for Trusts and Wills for High Net Worth Individuals.  He spoke on the current state of federal and NJ tax laws and how to protect family assets from catastrophic illness.

If you would like Mr. Niemann to speak before your group or to your facility staff, please contact him at fniemann@hnlawfirm.com or 732-863-9900.  We can create an interesting, informative and customized seminar complete with PowerPoint presentation on many topics of interest to your organization.

PLEASE CONTACT FACILITY 24 HOURS IN ADVANCE TO CONFIRM.

UPCOMING SEMINARS

2009

Powers of Attorney and Advance Directives
January 26th at 6:00 pm
Open to Hospital Staff
Seminar Location: Jersey Shore A Team  
71 Davis Avenue, Neptune 07753
(732)-776-4700

Veterans Benefit Aid and Attendance
January 15th at 2:00 pm
Open to all
Seminar Location:  Sunrise at Lincroft
734 Newman Springs Road, Lincroft, NJ  07738
(732) 212-1910

Powers of Attorney and Advance Directives
February 2nd 12:00 pm to 1:30 pm
Open to all
Seminar Location:  Jersey Shore Medical Center
1945 State Highway 33, Neptune, NJ  07753
(732) 775-5500

Veterans Benefit Aid and Attendance
March 4th at 2:00 pm
Open to all
Seminar Location:  Sunrise at Wall
2600 Allaire Road, Wall, NJ  07719
(732) 282-1700

Veterans Benefit Aid and Attendance
March 12th at 6:00 pm
Open to all
Seminar Location:  Sunrise Assisted Living of Marlboro
3A South Main Street, Marlboro, NJ 07746
(732) 409-6665

Veterans Benefit Aid and Attendance
April 2nd at 2:00 pm
Open to all
Seminar Location:  Care One King James
1040 Hwy 36, Atlantic Highlands, NJ 07716
(732) 291-3400

Veterans Benefit Aid and Attendance
April 7th at 6:30 pm
Open to all
Seminar Location:  Brandywine of Brick the Gables
515 Jack Martin Boulevard, Brick, NJ 08723
(732) 836-1400

CEU Program Veterans Aid and Attendance
April 23rd at 8:30 am
Social Work Staff CEU Program
Seminar Location:  Sunrise at Wall
2600 Allaire Road, Wall, NJ  07719
(732) 282-1700

Veterans Benefit Aid and Attendance
April 30th at 4:00 pm
Open to all
Seminar Location:  Seabrook Village
3000 Essex Road, Tinton Falls, NJ  07724
(732) 643-1200

Navigating Your Senior Years
Also speaking: Care Alternatives Hospice, Synergy Home Care,
and Primerica Financial Services
May 12th at 6:00 pm
Open to all
Seminar Location:  Care One   
188 Route 34, Holmdel, NJ 07733
(732) 946-4200

Veterans Benefit Aid and Attendance
May 14th at 4:30 pm
Open to all
Seminar Location:  Brandywine Assisted Living at Governor’s Crossing   
49 LaSatta Ave., Englishtown, NJ 07726
(732) 786-1000

Hidden Secrets of VA Benefits
May 20th at 6:30 pm
Open to all
Seminar Location:  The Willows Assisted Living
713 North Beers Street, Holmdel, NJ 07733
(732) 335-6405

Estate Planning
June 2nd at 6:00 pm
Open to all
Seminar Location: Care One at Jackson
11 History Lane, Jackson, NJ 08527
(732) 367-6600

Veterans Benefit Aid and Attendance
June 9th at 6:30 pm
Open to all
Seminar Location:  Sunrise at Lincroft
734 Newman Springs Road, Lincroft, NJ 07738
(877) 605-7130

CEU Program Veterans Aid and Attendance
June 11th at 4:30 pm
Social Work Staff CEU Program
Seminar Location:  Sunrise of Jackson
390 N County Line Road, Jackson, NJ 08527
(732) 928-5600

Hidden Secrets of VA Benefits
June 18th at 2:00 pm
Open to all
Seminar Location:  Sunrise of Jackson
390 N County Line Road, Jackson, NJ 08527
(732) 928-5600

Hidden Secrets of VA Benefits
June 30th at 8:00 am
Social Work Staff CEU Program
Seminar Location:  Monmouth Medical Center
300 Second Avenue, Long Branch, NJ  07740
(732) 928-5600

Veterans Benefit Aid and Attendance
July 7th at 1:00 pm
Open to all
Seminar Location:  Bella Terra   
Two Kathleen Drive, Jackson, NJ 08527
(732) 730-9500

Veterans Benefit Aid and Attendance
July 15th at 11:15 am
Open to all
Seminar Location:  Freehold Township Senior Center
116 Jackson Mills Road, Freehold, NJ  07728
(732) 294-2029

CEU Program Veterans Aid and Attendance
July 30th at 8:00 am
Social Work Staff CEU Program
Seminar Location:  Waterford Glen Assisted Living
2021 Highway 35, Wall, NJ 07719
(732) 282-1910

Hidden Secrets of VA Benefits
September 10th from 4:30 pm – 6:00 pm
Open to all
Seminar Location:  Allaire Center Senior Day Care
1983 Route 34 South, Wall, NJ 07719
(732) 974-7666

Hidden Secrets of VA Benefits
November 11th at 8:00 am
Open to all
Seminar Location:  Wedgewood Gardens
3419 Route 9 North, Freehold, NJ 07728
(732) 677-1200

2008
Disability Trusts and Benefits
December 11, 2008 at 10:00 am to 10:45 am
For Multiple Sclerosis (MS) Support Group
CentraState Medical Center
Health Awareness Center
65 Gibson Place, Room A
Freehold, NJ 07728 
(732) 294-2505

Veterans Aid and Attendance
November 18th at 7:30 pm
Matawan VFW
Cheesquake Adult Community Recreation Center
33 Galewood Drive
Matawan, NJ  07747

Estate Planning
November 13th at 2:00 pm
Open to all – RSVP by November 10th
Brandywine Assisted Living
100 Meridian Place
Howell, NJ  07731
(732) 719-0100

Medicaid and Asset Protection When Your
Clients Get Sick and Face a Nursing Home
November 11th at 10:00 am
John Hancock Agency
2520 Highway 35, Suite 105
Manasquan, NJ  08736
(732) 528-3822

Healthcare Association of NJ Nursing Homes Annual Convention
October 28th – 29th
Open to Healthcare Association Members
1000 Boardwalk at Virginia Avenue
Atlantic City, NJ 08401
(609) 449-1000

Powers of Attorney and Advance Directives
October 23, 2008 at 9:00 am
For Multiple Sclerosis (MS) Support Group
CentraState Medical Center
Health Awareness Center
65 Gibson Place, Room A
Freehold, NJ 07728 
(732) 294-2505

VA Benefit Aid and Attendance
October 14th at 6:30 pm
Open to all
Wynnewood at Forsgate
380 Forsgate Drive
Monroe, NJ 08831
609-409-7525

Medicaid and the Changes for 2009
October 2nd at 2:00 pm
Open to all
The Chelsea at Manalapan
445 Route 9 South
Manalapan, NJ 07726
(732) 972-6200

VA Benefit Aid and Attendance
September 11th at 10:00 am
Open to all
Sunrise of Jackson
390 N County Line Road
Jackson, NJ 08527
(732) 928-5600

How to Pay For Assisted Living without Going Broke
August 14th at 7:00 pm
Open to all
Seminar Location:  Sunrise at Lincroft
734 Newman Springs Road, Lincroft, NJ  07738
(732) 212-1910

VA Benefit Aid and Attendance
June 10th at 6:30 pm   
Open to all 
Seminar Location:  Sunrise at Wall
2600 Allaire Road, Wall, NJ  07719
(732) 282-1700

VA Benefit Aid and Attendance
Apr 17th at 3:00 pm
Open to all    
Seminar Location:  Brighton Gardens
620 State Highway, 35 South, Middletown, NJ
(732) 275-0790

VA Benefit Aid and Attendance  
Mar 13th at 5:00 pm – 7:00 pm 
Open to community 
Seminar Location:  Kensington Court
864 Shrewsbury Avenue, Tinton Falls, NJ   07724
(732) 784-2400

Wills/Probate 
Feb 7th at 1:00 pm 
Open to residents 
Seminar Location:  Allaire Center Senior Day Care
1983 Route 34 South, Wall, NJ  07719
(732) 974-7666

Estate Planning and Asset Protection
Jan. 23rd at 2:00 pm
Open to community 
Seminar Location:  Chelsea Rest Home
352 Chelsea Avenue, Long Branch, NJ 07740
(732) 222-8125

VA Benefit Aid and Attendance
Jan 16th at 6:30 pm    
Seminar Location: 
Sunrise Assisted Living of Marlboro
3A South Main Street, Marlboro, NJ 07746
(732) 409-6665

2007
VA Benefit Aid and Attendance
Dec 19th at 11:00 am
Seminar Location:  The Wexford Assisted Living
2018 Highway 35, Spring Lake, NJ 07762

Mercer County Bar Association 
Topic:  Special Needs Trust,  
Guardianship, Living Wills & More
Nov 28th at 9:00 am 
Seminar Location:  Marriott Princeton Hotel
100 College Road East, Princeton, NJ 08540
RECENTLY ATTENDED PROGRAMS BY MR. NIEMANN

2008
Probate Symposium
NJSBA
Mar 13th
New Brunswick, NJ

NAELA Unprogram
Jan 25 – Jan 27
Grapevine, TX

2007
Mercer County Bar Association
Special Needs Trust, Guardianship,
Living Wills & More
Nov 28th
Princeton, NJ

NAELA Convention
Nov 1 – Nov 4
Memphis, TN

MPS Systems Boot Camp
Oct 24 – Oct 25
Orlando, FL

Veterans Benefit Institute
Sep 2007
Chicago, IL

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LLC Ruling Favors Taxpayers

Tuesday, January 27th, 2009

Anna was the mother of three children and the widow of the man who invented the heart defibrillator implant.  In 1992, she created a trust for each of her daughters and gave a portion of her substantial interests in patent licenses to the trusts. In 2001, she created a limited liability company (LLC), to which she made some large transfers. She then gave a 16% interest in the LLC to each of the trusts, keeping a 52% interest to herself. Only four days later, Anna died suddenly and unexpectedly.

The IRS claimed a deficiency of millions of dollars in estate taxes. It pointed to a part of the Internal Revenue Code that provides that all property is to be included in a decedent’s estate to the extent that the decedent has transferred an interest in the property while retaining for life the possession or enjoyment of, or income from, the property. There is an exception to this general rule in cases of a bona fide sale for full and adequate consideration in money, but the IRS argued that the exception did not apply in the case of Anna’s estate.

In a somewhat surprising decision, given a recent trend favoring the IRS in such disputes, the United States Tax Court sided with the estate and kept the LLC assets out of the gross estate for estate tax purposes. The court ruled that the bona fide sale exception applied, notwithstanding that the LLC activities were not in the nature of a “business.” It was sufficient that Anna had “legitimate and significant nontax reasons” for creating and funding the LLC, including joint management of family assets, pooling family assets to maximize investment opportunities, and providing for each of her daughters on an equal basis.

Some practical lessons for minimizing estate tax liability while using family LLCs emerge from the case of Anna’s estate. They include the following:

(1) document the legitimate and significant motivations, unrelated to estate taxes, for forming such an entity; (2) continue the entity after the decedent’s death, to avoid the appearance of an ordinary trust; (3) if, as in Anna’s case, the donor dies unexpectedly a short time after the gifts, be prepared to demonstrate that the death was unexpected; and (4) keep sufficient assets outside of the entity to cover the donor’s living expenses, to avoid the possibility that the donor will treat the assets of the entity as her own. The planning, drafting, and advice associated with a family LLC entails resolution of complex issues and requires the guiding hand of a knowledgeable professional.

Federal Estate Tax
The federal estate tax credit, currently at $2 million, is set to increase to $3.5 million in 2009.  This means that in 2009 you can leave up to $3.5 million to your heirs without any federal estate tax liability.

If Congress takes no action, the federal estate tax will be repealed altogether in 2010. While this is an unlikely scenario, it does underscore the uncertainty involved in estate planning over the next few years. Make sure to meet with a professional to review your plan.

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Your New Jersey Estate Plan Review Checklist Part 2

Tuesday, January 27th, 2009

Fredrick P. Niemann, Esq., a NJ Estate Planning Attorney

Do you own assets held in joint accounts, or where you have a named beneficiary? These assets will not be distributed in accordance with your Will. Instead, all joint assets will pass to the surviving joint owner, and all assets with a beneficiary designation will pass to that beneficiary.

Accordingly, if you have a convenience account with one of your children, the assets in that account will pass to that one child at your death, regardless of what your Will might say. You should carefully review the ownership and beneficiary designation of all of your assets to be sure that the assets will be distributed to the right people at your death. 

  • Are your residuary beneficiaries correct? Residuary beneficiaries are the people who receive the balance of your estate after (i) all the debts, expenses and taxes have been paid, (ii) any specific bequests have been made, and (iii) joint accounts or any assets with beneficiary designations have been distributed to the appropriate people. You should review this section of your estate planning documents carefully. If one of the beneficiaries were to predecease you, will that beneficiary’s share pass to his or her children, your other children, or otherwise?
     
  • Are assets being distributed to your beneficiaries outright or in trust? If assets are distributed to a beneficiary outright, the beneficiary can do whatever he or she pleases with the assets. However, those assets are at risk from the beneficiary’s creditors, spouse in a marital action, and poor judgment. It is possible to create trusts that give the Trustee (who may also be a beneficiary) great flexibility in distributing the assets to the beneficiaries, and at the same time protects those assets from a beneficiary’s immaturity, misuse, creditors, divorce, etc. Also, trusts may be used when you want to direct how assets will pass upon the beneficiary’s death. For instance, many times in a second marriage a trust will be established for the benefit of the spouse, but provide that upon the spouse’s death the assets will pass back to the decedent’s children. You should speak with your attorney about the benefits and drawbacks of using a trust to distribute your assets to your beneficiaries.
     
  • If you currently have a trust established, are the trust terms still appropriate? Many people establish trusts for young beneficiaries. You should look at the ages when the assets will be distributed outright to the beneficiaries, keeping in mind that assets distributed to somebody who is 18 are likely to be spent differently than if distributed to a person who is 25 or 30 or older.  It may be appropriate to increase or reduce the ages at which the beneficiaries will receive an outright distribution from the trust. Alternatively, it may be appropriate to give the beneficiary an income stream, or give the Trustee greater discretion to make distributions from principal. For example, a trust might say that a child will receive the income from the trust starting at age 25, and that the principal must be distributed to the child outright at age 30 and 35. Prior to age 35, the trust principal could be used for the beneficiary pursuant to the terms of the trust. By structuring a trust this way, the beneficiary has an opportunity to learn how to manage money.
     
  • Do any of your beneficiaries have special needs? If you have a beneficiary who is elderly or disabled, that beneficiary may need to qualify for public benefits in order to maintain their standard of living. If a person who is receiving public benefits receives an inheritance directly, the public benefits will cease, and the person must exhaust the inheritance to pay for the care that the public benefits would otherwise have provided for. Once the inheritance is exhausted, the person must then reapply for benefits. This can be a traumatic and expensive process. Instead, you should consider leaving assets in a purely discretionary Special Needs Trust for the person, drafted in such a way that it does not interfere with the person’s ability to receive public benefits. By using this approach, the trust becomes a security blanket for the beneficiary, not a burden.

Fredrick P. Niemann is managing partner at Hanlon Niemann located at 3499 Route 9 North, Freehold, NJ.  His practice focuses primarily in the areas of Elder Law, Asset and Estate Protection Planning, Medicare, Medicaid and Veteran’s Benefit Assistance. He can be reached at fniemann@hnlawfirm.com, or by calling 732-863-9900, Ext. 101.

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Claiming a Parent As a Dependent

Tuesday, January 27th, 2009

If you are caring for your mother or father, you may be able to claim your parent as a dependent on your income taxes. This would allow you to get an exemption ($3,300 in 2006) for him or her.

There are five tests to determine whether you can claim a parent as a dependent:

1. The person you are claiming as a dependent must be related to you. This shouldn’t be a problem if you are claiming a parent (in-laws are also allowed). Keep in mind, however, that foster parents do not count as a relative. To claim a foster parent, he or she must live with you for a year as a member of your household.

2. Your parent must be a citizen or resident of the United States or a resident of Canada or Mexico.

3. Your parent must not file a joint return. If your parent is married, he or she must file separately. There is an exception if your parent is filing jointly, but has no tax liability. If your parent files a joint tax return solely to get a refund, you can claim him or her as a dependent.

4. Your parent must not have a gross income of $3,300 (in 2006) a year or more. Gross income does not include Social Security payments or other tax-exempt income. (For those with incomes above $25,000, some portion of Social Security income may be includable in gross income; 

5. You must provide more than half of the support for your parent during the year. Support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Even if you do not pay more than half your parent’s total support for the year, you may still be able to claim your parent as a dependent if you pay more than 10 percent of your parent’s support for the year, and, with others, collectively contribute to more than half of your parent’s support. To receive the exemption, all those supporting your parent must agree on and sign the applicable Multiple Support Declaration (Form 2021).

If you cannot claim your parent as a dependent because he or she filed a joint tax return or has a gross income above $3,300 but you have been paying your parent’s medical expenses, you may be able to deduct those expenses from your taxes.

Also see our blog, “Deducing Medical Expenses from Your Taxes”.

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