Archive for the ‘Estate Administration’ Category

« Older Entries
Newer Entries »

Protection from Identity Theft…After Death, by Fredrick P. Niemann, a New Jersey Estate Administration Attorney

Tuesday, July 19th, 2011

Identity thieves can do a lot more damage than simply committing financial fraud.  Identity thieves scour obituary listings and gather personal information from genealogy websites.  Many identity thieves focus almost exclusively on stealing the identities of those who are deceased since the likelihood of detection is lower.  They can run up charges on existing accounts, open new lines of credit, steal funds from investment accounts, set up utilities accounts, get access to health care and prescription medicines, and even apply for government benefits under the deceased’s name.

What steps can you take to protect a deceased loved one’s personal information and assets?
• Immediately notify banks and creditors of the death by providing copies of the death certificate for verification.
• Close individual accounts, The surviving spouse may be asked to close any joint accounts, which also helps reduce the  chances of identity theft.
• Contact the three main credit bureaus (TransUnion- www.transunion.com, Equifax – www.equifax.com, and Experian –  www.experian.com) and ask that credit reports be flagged as “Deceased: Do Not Issue Credit”.  Also request a copy of each  credit report so that you can be sure you did not overlook any accounts.
• Notify the Social Security Administration directly.  While funeral homes do not report deaths to the Social Security  Administration, don’t assume they will do so in a timely fashion.
• Notify the Department of Motor Vehicles.

If you suspect fraud, file a police report and contact the company in question.  Provide a copy of the death certificate to make the process go more smoothly.

Do you have a question(s) not addressed here?  If so, contact Fredrick P. Niemann, Esq. toll free at (888) 800-7442 or e-mail him at fniemann@hnlawfirm.com to schedule a consultation about your particular needs.  He welcomes your calls and inquiries and you’ll find him very approachable and easy to talk to.

Tags:
Posted in Elder Law, Estate Administration, estate planning | Comments Off

Spouses Can Be Held Liable for Certain Unpaid Debts of Their Husband or Wife

Tuesday, July 12th, 2011

By Fredrick P. Niemann, an Estate Administration Attorney

 

Did you know that a creditor may be able to come after you for some of the debts that your spouse has incurred? You heard me correctly. New Jersey’s law of necessities states that certain expenses of one spouse are actually guaranteed to be paid by both spouses, even the one not involved with the transaction.

Normally, a person is not liable for the debts of another absent an agreement between the two people. However, marriage is a key exception to this rule. Since marriage involves a unique bond between two people, they share some of the debts of each other. The New Jersey Supreme Court has handed down this rule in a number of cases, but has made sure to apply strict requirements to it.

First, the debt must be incurred during the marriage. A husband and wife who are divorced are not liable for each others debts incurred after the marriage. Second, and most importantly, the debt must be “necessary”. The New Jersey Supreme Court has stated that only debts for necessary goods and services will be included in the exception.

Whether a good or service is deemed “necessary” is usually based on your specific case, as very few expenses have been determined to always fall under this category. One universally necessary expense is the hospital bills and costs associated with medical care. Legal expenses for representation of a spouse are also necessary, but only if the family’s well being is affected by the outcome of the litigation. Other necessary expenses are determined by the Courts, as they look at whether the spouse and family in general has benefitted from an expense/debt.

In order for a creditor to recover your spouse’s debts from you, a creditor cannot come to you without first trying other avenues of recovery. The creditor must first demand payment from your spouse, then attempt to recover from your spouse’s assets. Only then, if your indebted spouse is unable to satisfy the debt, can the creditor seek the expense from you.

Responsibility for the payments of debts under the law of necessities can be a complicated subject. Many aspects of the law are unclear, such as whether a debt is considered a “necessity” or not. If you have any questions pertaining to the debt’s of your spouse or the law of necessities in New Jersey, please call Fredrick P. Niemann, Esq. immediately. He can be reached at 855-376-5291 or by email at fniemann@hnlawfirm.com.

Tags:
Posted in Estate Administration | Comments Off

LEARN MORE ABOUT CHARITABLE REMAINDER TRUSTS AS PART OF YOUR N.J. ESTATE PLANNING

Wednesday, May 25th, 2011

In general, a charitable remainder trust is a trust in which the creator of the trust reserves the cash flow from the property contributed to the trust, and upon the death of the creator (and the creator’s spouse).  The property that remains is distributed to the charity.

There are two basic types of charitable remainder trusts, a  charitable remainder unitrust (CRUT) and a charitable annuity trust (CRAT).  The primary difference between the CRUT and the CRAT is how the cash flow is measured:

• In a CRUT, the non-charitable beneficiary is entitles to receive a fixed percentage (not less than 5 percent) of the annual fair market value of the trust assets.  Thus, in an inflationary economy, the payments to the non-charitable beneficiary will increase as the value of the assets increases.  However, in deflationary times, the amount paid to the non-charitable beneficiary will decrease as the value of the assets decreases.

• In a CRAT, the non-charitable beneficiary is entitled to receive a fixed percentage (not less than 5 percent of the initial fair market value of the trust assets) each year, and this amount does not fluctuate with the fluctuation of the value of the trusts assets.

As a general rule, charitable remainder trusts created for older individuals tend to be CRATS because older individuals want certainty as to the annual payments, and their life expectancies, usually are not long enough to benefit from the historical inflationary economy.  Conversely, CRUTS are generally selected by younger donors whose life expectancies are long enough to benefit form increasing asset values, therefore increasing distributions later in life.

For more information, please contact Fredrick P. Niemann, Esq. at (888) 800-7442 or email him at fniemann@hnlawfirm.com

Tags: , , , , , , , , , ,
Posted in Estate Administration | Comments Off

Residency vs. Domicile – Can NJ and NY Both Tax Your Estate?

Wednesday, January 19th, 2011

By: Fredrick P. Niemann, a NJ Estate Administration Attorney

An often overlooked issue in probate and estate administration is the determination of a decedent’s domicile.  Most times it is usually straightforward.  However sometimes, the decedent’s ties to a particular jurisdiction are unclear.

Domicile impacts several aspects of an estate plan, namely “rights concerning property, intestate distribution, and the validity of a will, the elective share or other rights of the surviving spouse and the rights of their heirs.

Determining domicile and residence also has important estate and income tax consequences.  In addition, the concept of domicile is pivotal to where a will should be probated and which law governs the disposition of the estate.

Domicile is generally defined as the place where one has his or her permanent home.  Domicile becomes particularly important for clients who are considering relocating because of retirement, job relocation or for tax considerations, especially residents of NY and NJ with an oppressive tax burden.  The reasons have become increasingly common.  In turn, the challenge of ascertaining domicile has become increasingly complex.

The requirements for a person’s domicile is sensitive and includes the physical presence at a dwelling place and the intention to make that place home.  The key facts in determining domicile may include:

• Where the decedent was living at the time of his death,
• Type of residence (ie., seasonal, permanent or temporary),
• Whether the dwelling was maintained while the decedent was physically out of the state,
• Where decedent was buried,
• Where decedent was last employed or actively engaged in business,
• When and where decedent last voted,
• Whether decedent used the state’s address for income tax, and
• Where decedent had a driver’s license.
• Where decedent had mail delivered.

The key dilemma is that, although each person may have only one domicile, more than one jurisdiction may claim domicile.  More than one state may claim domicile because neither the 14th Amendment nor the Full Faith and Credit Clause of the US Constitution requires uniformity in the decisions of different states as to domicile.

One of the most prominent, and infamous, decisions in the arena is In re Dorrance,  115  N.J. Eq. 268 (prerog. 1934), aff’d.,  116 N.J.L 362 ( E.&A. 1936), cert denied, 298 U.S. 678 (1936).  John T. Dorrance was a member of one of the wealthiest and well-known families in New Jersey.  He died in 1930.  The state tax commissioners assessed an inheritance tax of almost $17 million.  The executors of the estate alleged that the assessment was invalid because Mr. Dorrance had not been domicile in New Jersey at his death.

For several years before his death, Mr. Dorrance occupied two residences, one in New Jersey and one in Pennsylvania.  Indeed, the New Jersey Prerogative Court acknowledged that the Pennsylvania Courts had already upheld a $17 million tax assessment in favor of Pennsylvania.  The executors asserted that the ruling by the Pennsylvania courts- that Mr. Dorrance was domicile in Pennsylvania at his death-was binding on the New Jersey courts.

The New Jersey Court disagreed.  It reasoned that the courts of a sister state always have the power to inquire into the jurisdiction of the court which pronounced the judgment at issue.  In turn, the New Jersey Court held, if the sister court finds that the first court did not have jurisdiction; the judgment need not be accorded full faith and credit.

After a review of the facts bearing on domicile, the New Jersey court concluded that Mr. Dorrance had remained a domiciliary of New Jersey at his death, and that the Pennsylvania Courts had been incorrect in their contrary determination.  Consequently, the Pennsylvania holding was not binding on the New Jersey court.  Both states assessed taxes against the estate.  Such decisions now percolate regularly across the country.  People are now exposed to double taxation.  As society becomes more mobile, the issue will continue to arise more frequently.  In view of the importance of the determination of domicile, the issue must remain at the forefront of the handling of any estate.

If you would like to discuss a probate or estate administration matter, please call Fredrick P. Niemann, Esq. today.  He can be reached at (888) 800-7442 or by email at fniemann@hnlawfirm.com.

Posted in Estate Administration | Comments Off

Estate Planning: Beware of the Gift of Debt

Wednesday, April 14th, 2010

Fredrick P. Niemann, Esq., NJ Estate Administration Attorney

If you inherit property, of course you should be grateful and count your blessings. Still, consider the possibility that the gift may come with a big string attached – a debt linked to the property, such as is particularly common with real estate or a car. In that event, the question arises as to whether the debt must be satisfied from the particular asset or from the decedent’s estate more generally. How this question is answered can cause a big swing in the respective gift amounts for beneficiaries of an estate.

Historically, the law presumed that the debt was not to be paid from the property that was connected to it. The reasoning was that a true gift should not come laden with such a burden. Over time, as taking on debt became commonplace, this thinking changed and statutes flipped the conventional assumption. Increasingly, these laws start from the premise that the property left to someone includes the debt on the property, unless the decedent in his or her will clearly indicated a different intent. That is where careful estate planning, with professional guidance, comes in.

It is best to leave no doubt for the ordinary lay reader of a will. A general directive in the will to pay all debts of the testator is too nebulous. Instead, if the intent is not to keep the asset joined to the debt, language something like this should be used in a will: “If [the specific asset] is subject to a mortgage, security interest, or other lien, I direct that my executor pay the debt from other property of my estate which is not given to a specific person or entity.”

This scenario was played out recently in a case in which a farmer left to his (favored?) son three different farms, each of which was encumbered by debt. To his other son he left the residue of the estate. When the father died, the executor used part of the estate proceeds to pay off the loans to the farms, so that the first son would receive them debt-free. Not surprisingly, the second son, whose inheritance was thereby diminished, brought the matter to court.

The second son prevailed, forcing payment of the debts for the farms to come from the farms themselves. The father’s will directed in a general way that debts were to be paid from the estate. However, under the relevant state statute, that was not a sufficiently explicit indication of intent to satisfy the debts on the farms from the residu¬ary estate. In other words, the will had not clearly shown an intent that the first son was to receive the farms debt-free. As a result, the first son got the three farms, but he, not the second son, also got the responsibility for paying off the attached encumbrances, which totaled almost a quarter of a million dollars.

For further information and advice in any estate matter, do not hesitate to contact me at 888-800-7442, or info@fnlawyerinnj.com.

Tags: , , , , , , ,
Posted in Estate Administration, Wills & Trusts | Comments Off

Distribution from Self-Settled Special Needs Trusts Relating to Medical Expenses

Friday, April 9th, 2010

Fredrick P. Niemann, Esq., a NJ Special Needs Trust Attorney

One of the most pressing needs for disabled beneficiaries is medical care.

Medical Insurance
It is crucial that the disabled beneficiary obtain some form of medical insurance. Options include the following:

  • Private Medical Insurance. Typically, the only source of private medical insurance at regular rates is through the parent’s coverage with the parent’s employer. Parents of such child must make every effort not to lose their jobs.
  • COBRA. The Consolidated Omnibus Budget Reconciliation Act of 1996 (COBRA) allows former employees and their dependents to continue the employer’s coverage for a limited period of time, commonly 18 months. However, if the employee became disabled within two months of the qualifying event causing him to lose medical insurance coverage, COBRA coverage may be extended for 29 months. If the former employee died, divorced, or became entitled to Medicare, then the employee’s dependents are eligible for 36 months of coverage.
  • State-Mandated High-Risk Pools. Many states have high-risk pools to cover persons who are uninsurable in the private market. This coverage often tends to be very expensive.
  • Medicare. Medicare is only available to persons under 65 if they are disabled and have 20 quarters of coverage. If they receive SSD, then two years after the determination of disability they are entitled to Medicare. Persons receiving Medicare should obtain a Medicare supplement policy. There is usually a very limited open enrollment period to obtain this coverage after which it becomes impossible to obtain because of pre-existing conditions.
  • Medicaid. Persons receiving SSI also receive Medicaid. In non-SSI states having a Medically Needy program, persons qualify for Medicaid by spending down their income if income is above a certain amount. Some states have income caps. Other ways of obtaining Medicaid are through state Medicaid waiver programs, including various Kid Care programs available in many states. Eligibility rules vary. A Katie Beckett waiver program is very desirable, because the income and assets of the parent are not deemed to the children. Some states do not call their programs Katie Beckett, which is a specific categorically eligible group of Medicaid recipients, but the effect is the same because those state identify groups of children with disabilities and provide for Medicaid eligibility so the waiver services are available. Slots tend to be extremely limited.

Non-Covered Medical Expenses
Typically, Medicaid pays for 100 percent of covered expenses. However, very often, psychological services, certain types of testing and some special therapies are not covered. It is appropriate for a trustee to pay for these non-covered services. It is also appropriate for a trustee to pay for dental care, prescriptions, and podiatrist care.

Provider Non-Acceptance
Some providers do not accept Medicaid, because of the low reimbursement rate. It is difficult to find a dentist participating in the program. Some persons with disabilities choose physicians who do not accept Medicaid. It is appropriate for a special needs trust to pay for services from those physicians.

Out-of-Pocket
If the person with a disability receives Medicare, rather than Medicaid, there may be co-payments, deductibles and payments for services that Medicare does not cover. It is appropriate to pay for those costs from a special needs trust.

If you have any questions concerning Medicaid or a trust for a disabled or handicapped child, contact Fredrick P. Niemann, Esq. at 888-800-7442, or info@fnlawyerinnj.com.  He is happy to answer your inquiries.

Tags: , , , , , , ,
Posted in Elder Law, Estate Administration, Special Needs | Comments Off

Tips for Preventing, Detecting, and Reporting Financial Abuse of the Elderly

Wednesday, December 23rd, 2009

Fredrick P. Niemann, Esq., NJ Elder Law Attorney

As the economy worsens, incidences of elder financial abuse are reportedly on the rise. The elderly are particularly vulnerable to scams or to financial abuse by family members in need of money.

A recent study found that up to one million older Americans may be targeted yearly. Family members and caregivers are the culprits in 55 percent of cases, although financial losses are higher with investment fraud scams.

While it is impossible to guarantee that an elderly loved one is not the victim of financial abuse, there are some steps you can take to reduce the chances. One option is to have more than one family member involved in caring for the loved one. You can also encourage the elder to get involved in community activities to ensure he or she has a wide range of support. Using direct deposit as much as possible is also helpful. And of course you should always screen caregivers carefully and verify references.

Financial abuse can be very difficult to detect. The following are some signs that a loved one may be the victim of this kind of abuse:

  • The disappearance of valuable objects
  • Withdrawals of large amounts of money, checks made out to cash, or low bank balances
  •  A new “best friend” and isolation from other friends and family
  • Large credit card transactions
  •  Signatures on checks look different
  •  A name added to a bank account or newly formed joint accounts
  •  Indications of fear of caregivers

If you suspect someone of being financially abused, there are several actions you can take:

  • Make a report by calling your local or County Adult Protective Services and/or the NJ Office of the Ombudsman for the Elderly. File a police report if you believe the facts support a crime.
  • Explore legal options with a qualified attorney.  In New Jersey, the Chancery Court is available to address alleged legal abuse. The court can intervene if someone in the family is misusing a power of attorney or their role as guardian or conservator.
  • Contact advocacy organizations. The National Center on Elder Abuse offers guidance on how to investigate and seek justice for elder abuse. State laws vary, but some have people available to deal with the situation and may be able to get restitution for breach of fiduciary duties.
  • Try to get a temporary restraining order from a court while building your case.  Again, speak to a qualified elder law attorney.

If you have any questions regarding an elder law or estate planning matter, contact Fredrick P. Niemann, Esq. at (888) 800-7442, or info@fnlawyerinnj.com.  He is happy to answer your inquiries.

Tags: , , , , , , , , ,
Posted in Elder Law, Estate Administration | Comments Off

Do You Have the Right Fiduciary for Your Estate?

Friday, July 10th, 2009

Warning: Your Decision Does Matter

Fredrick P. Niemann, Esq., NJ Estate Plan Attorney

When creating an estate plan, especially in your will and/or trust, an important decision is who to name as your fiduciary. A fiduciary is a fancy legal term for the person who will take care of your property for you if you are unable to do it yourself, such as the executor of an estate, the trustee of a trust, or an attorney-in-fact under a power of attorney. Your first instinct might be to name one of your children as a fiduciary, but if you want to avoid conflict among your children, this might not be the best option.

When naming a fiduciary, it is important to be able to trust the individual, which is why people often name family members as fiduciaries. However problems can arise when a parent with two or more children names one child as a fiduciary. According to Fredrick P. Niemann, an attorney from Freehold, New Jersey, who spoke on the issue of family harmony at a recent estate planning seminar, a child is often not the best fiduciary for several reasons:

  • It is hard for a child to be completely objective. 
  • Children often disagree over many things, including how long the estate should take to complete, the selling of assets, and the division of personal property.
  • Children often don’t communicate with each other well.

An alternative is to hire a professional fiduciary. A professional fiduciary can be a bank or investment firm with trust administration experience with trust powers, a certified public accountant, or a trust company. A professional fiduciary will charge a fee, but the fee should be explained ahead of time. In addition, because a professional is experienced in managing money and property, your assets are more likely to increase under this person’s or institution’s guidance.

To ensure that your family has some input, you can include a provision that allows one or more family members to discharge the fiduciary if they feel the professional is not doing a good job. This will allow your family to make sure the fiduciary is performing properly without having the burden of acting as fiduciary.

For further information and advice in any estate planning matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

Tags: , , , , , , , , , ,
Posted in Estate Administration, Wills & Trusts, estate planning, probate | Comments Off

What Happens If You Die Without a Will?

Friday, May 1st, 2009

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

We all know we are supposed to do estate planning, but not all of us get around to it.  So what happens if you don’t have a will when you die in New Jersey? Your estate will be distributed according to New Jersey state laws, which may or may not be the way you want it to be distributed.

Dying without a will is called dying “intestate”. New Jersey has laws that determine what will happen to your estate if you don’t have a will. If you are married, New Jersey law will award a portion of your estate to your spouse, with the rest divided among your children.  If you don’t have children, then your estate will be divided among other living relatives such as your parents or siblings. If you are single, New Jersey provides that your estate will go to your children or to other living relatives if you don’t have children. If you have absolutely no living relatives, then your estate will go to the state.  This is called escheating to the state of New Jersey.

Note that any jointly held assets, such as bank accounts or real estate, will go directly to the co-owner. In addition any life insurance policies or retirement accounts will go directly to the beneficiary designated on the account. And if you have a trust, any assets in the trust will go to the beneficiary designated in the trust.

One purpose of a will is to name a guardian for your young children; if you do not have a will, the court will determine who will act as guardian of your children. The court will also appoint the person who will administer your estate. In addition, if you are unmarried but have an unregistered partner, your partner will not inherit anything from your estate without a will naming him or her as a beneficiary.

The best way to ensure your estate is distributed the way you want it is to plan your estate with a will and/or a trust attorney.

For further information and advice on NJ estate planning laws, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

Tags: , , , , , , , , , , , ,
Posted in Elder Law, Estate Administration, Wills & Trusts | Comments Off

National Report Says States Have Ability to Curb Power of Attorney (POA) Abuse

Friday, April 17th, 2009

Fredrick P. Niemann, Esq., a Power of Attorney Lawyer

The misuse of powers of attorney to exploit the elderly appears to be on the rise, but a new AARP report says that states can improve protections for older people by adopting a model law that addresses this type of abuse.

For most people, the power of attorney is the most important estate planning instrument — even more useful than a will. A power of attorney (POA) allows an individual to name a trusted person — their agent — to make financial decisions for them if they ever become incapacitated.

But while a POA avoids the costly and time-consuming process of having a court appoint a guardian or conservator, it also confers a great deal of authority on the agent. This is why advocates for the elderly often call the POA a “license to steal.” Increasingly, it seems, dishonest agents have been taking advantage of this license. AARP says that adult protective services and criminal justice professionals are reporting “an explosion” of financial exploitation cases of this type against the elderly.

Powers of attorney are regulated by state law and most states lack adequate safeguards, AARP contends; not New Jersey however. “New Jersey has strong fiduciary laws that are readily enforceable by the courts” says Fredrick P. Niemann, an elder law attorney in Freehold, Monmouth County, New Jersey.  New Jersey has laws on Powers of Attorney to offer help to protect people who execute POAs and discourage POA abuse. “There are stringent requirements for agents to exercise certain powers, as well as provisions making malfeasant agents liable for damages, attorney’s fees and costs”, says Niemann.

The AARP report, “Power of Attorney Abuse: What States Can Do About It,” compiled by the American Bar Association Commission on Law and Aging under contract to AARP.

For further information and advice on Powers of Attorney, do not hesitate to contact Fredrick P. Niemann at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

Tags: , , , , , , ,
Posted in Estate Administration | Comments Off

« Older Entries
Newer Entries »