An Agent with a general Power to Gift under a New Jersey Power of Attorney Cannot Make Unlimited Gifts or Change Retirement Beneficiaries

December 6th, 2011

By Fredrick P. Niemann, Esq. a New Jersey Power of Attorney Lawyer

A recent case in New Jersey held that a durable power of attorney that allows the agent to “make gifts” does not accord the power to change retirement plan beneficiaries or to make large gifts of personal property absent specific authorization in the document.  In this case, the document authorized the attorney-in-fact to “make gifts” but it did not contain further instructions regarding gifting powers. Before death, the agent, acting under the power of attorney, changed the beneficiary designation from her step-children to her siblings. The agent also used the document to distribute some $115,000 of the decedent’s assets to her siblings. The agent claimed that she was acting on her son’s instructions.

The decedent’s step-daughters and his estate sued claiming that the agent (his mother) lacked the proper authorization to make gifts. They argued that New Jersey law requires that a power of attorney specifically grants the authority to make unlimited gifts. The agent maintained that New Jersey law grants an attorney-in-fact broad powers to manage bank accounts and retirement plans and that the change in beneficiaries should not count as a “gift.” The trial court ruled that the agent had the power to change the beneficiary designations but not to make the large distribution to the siblings. Both sides appealed.

On appeal the Court found that the power of attorney does not grant the agent the power to make unlimited gifts or to change the beneficiaries of the retirement plan. Contact me personally today to discuss your power of attorney matter.  I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns.  You can reach me toll free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com.

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TIME TO FILE DISCLAIMERS IN NEW JERSEY IS NOT LIMITED TO NINE MONTHS

December 6th, 2011

By Fredrick P. Niemann, Esq. an Estate Administration and Probate Attorney
      
Here’s a quick post.  Disclaimers are a popular and effective tax planning tool after the death of a person.  It allows an estate to take advantage of the tax code.  The New Jersey statute was amended about a half dozen or so years ago to allow disclaimers to be file beyond 9 months after death even if the disclaimer might not be a qualified disclaimer under Section 2518 of the IRC.  It’s a big deal!
Contact me personally today to discuss your Estate Administration/ Probate matter.  I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns.  You can reach me toll free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com.

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The Future Success of Your Business May Hinge on a Proper Buy-Sell Agreement

November 21st, 2011

By Fredrick P. Niemann, Esq., a NJ Business Succession Attorney
Buy-sell agreements are invaluable agreements between owners of a business. In companies with multiple owners, buy-sell agreements outline the terms of departure for one of the owners, mainly the division of their interest in the business. Buy-sell agreements typically dictate who will receive the departing owners interest, how much will be paid to the departing owner for it, and provide the cash for funding the purchase. A properly written buy-sell agreement is key to business succession planning because it assures a smooth transition for the business when one owner retires or departs for other reasons.

There are two basic types of buy-sell agreements.  A Redemption buy-sell agreements is one in which the business, as an entity, purchases the interest of the departing owner. This effectively means that the remaining owners own a bigger share of the business. Cross-purchase buy-sell agreements are the other basic type of buy-sell agreements. These involve the remaining owner or owners individually acquiring the interest of the departing owner. In businesses with multiple owners remaining, it is possible for one owner to acquire all or most of the departing owner’s interest and own a bigger stake in the business, or all owners to acquire an equal portion or the interest, keeping the ownership proportions the same.
There are numerous benefits to buy-sell agreements for both your business and a departing owner. Guaranteeing a purchaser for the departing owner’s interest avoids the hassle of finding someone to purchase their interest. While this may not seem like a problem for successful businesses, remaining owners often have to approve any new owner purchasing an interest in the business. Certain owners may not want others to receive an increased ownership share in the business. These and other issues can be avoided by naming a buyer beforehand. 

Buy-sell agreements allow owners to agree to financing for the transaction before it occurs, which avoids the trouble of forcing the departing member and the buyer to go through unknown financing methods. They also guarantee the business will continue to operate as it has and will not be interrupted by any conflicts resulting from the transfer of the departing owner’s interest.

By establishing a fair market value of the interest prior to the departure, buy-sell agreements also assure heirs of a deceased business owner that they will receive a fair value for their loved one’s interest in the business. Many family members have no idea what the deceased owner’s interest in the business is worth and unfortunately this leaves them vulnerable to being taken advantage of by the remaining owners.  Setting a predetermined value for the business interest, which is updated frequently, assures that family members will receive fair value and their will be no argument over what the business interest is worth. This value can also be used for tax purposes as well, as the government will allow the buy-sell agreement to establish the value of the business as long as three strict requirements are followed:

1. The buy-sell agreement is a bonafied business agreement;
2. The buy-sell agreement is clearly not an attempt to transfer your business interest to a family member for less than adequate consideration; and
3. The terms of the buy-sell agreement are similar to other arrangements of the same general type in other businesses.

A proper buy-sell agreement between you and your co-owners can be critical to the future succession of your business in New Jersey. When correctly written, these agreements guarantee the successful transfer of your business while avoiding the tedious conflicts that tend to arise without such an agreement. If you have any questions regarding the benefits of a buy-sell agreement or would like to discuss the future of your business succession, please call Fredrick P. Niemann, Esq., a knowledgeable Business Attorney. He can be reached toll free at 732-863-9900 or by email at fniemann@hnlawfirm.com. You’ll be happy to know that he is very approachable and experienced in New Jersey business matters.

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MEDICAID PLANNING DESPITE TOUGHENED RULES

November 16th, 2011

By: Fredrick P. Niemann, Esq. a NJ Medicaid Attorney
         
Although the Deficit Reduction Act of 2005 tightens Medicaid eligibility in New Jersey, Medicaid continues to be the primary program to avoid impoverishment due to long-term care costs.  New Jersey Medicaid can fund long-term care in a nursing home, assisted-living facility or private residence.

Because Medicaid eligibility rules often are replete with traps, Medicaid planning should be attempted only with expert guidance.  For example, filing a Medicaid application too early can trigger expensive penalties that wouldn’t arise if the application were timed properly.

To qualify for Medicaid long term care, you must demonstrate medical eligibility and have minimal resources and income.   Resource and income limits vary depending on living arrangements and care needs.  For instance, vacation homes, gifts, Social Security and security deposits always are countable.

When one spouse applies for Medicaid to fund long-term care, the resources, savings and assets of both spouses are counted against eligibility. However, there are some exemptions for the community spouse. Spousal allowances are modest and a community spouse will face a grim financial future without effective Medicaid planning.

Early planning can generate the greatest savings, but it’s never too late – even if a loved one already has entered a facility.  Planning can help maximize the community spouse’s assets and income, convert resources into exempt income, and minimize gift penalties.  These strategies may be employed individually or jointly.
Maximize Allowance

To qualify for the maximum allowance, couples worth under $220,000 can often use properly timed loans and other techniques. 

Medicaid applicants must apply their income toward long-term care costs.  Because couples often rely on both spouses’ income to meet normal living expenses, a community spouse can suffer severe hardship if he or she loses access to her spouse’s pension and Social Security.  Fortunately, in many cases, couples can restructure finances and housing costs to dramatically increase the community spouses’ income allowance.

Once an individual qualifies for Medicaid, only the modest Medicaid resource limits will be available to supplement the basic needs Medicaid covers.  Therefore, it makes sense for families to buy items they will need with resources the family must spend down to qualify for Medicaid.  Rather than spend the community spouse’s resource allowance on clothes, the community spouse can purchase clothes with excess resources that she and her husband must spend down to qualify him or her for Medicaid.  Typical spend-downs include household goods, services, acquisition or improvements to the home and vehicle for the community spouse, travel and Medicaid-qualified prepaid funeral accounts.

If you have any questions with regard to New Jersey Medicaid planning and eligibility, contact Fredrick P. Niemann, Esq.  an experienced New Jersey Medicaid planning attorney toll-free at 888 800-7442 or e-mail him at fniemann@hnlawfirm.com today.

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Do You Have Uninsured Medical Expenses that May Qualify You For Veterans Aid & Attendance Pension Benefit in New Jersey

November 16th, 2011

By: Fredrick P. Niemann, a NJ Accredited Veterans Benefits Attorney
It’s important to learn what the VA considers “Unreimbursed Medical Expenses” – that is, what you and your loved one are paying out of your pockets- also referred to as “UME”. This is a key factor to help you determine if a veteran may qualify for a pension!

UME’s include doctors’ and dentists’ fees, Medicare premiums and copayments, insurance premiums, transportation to the doctor’s office, and the cost of assisted living facilities or in-home caretakers.  But there’s much more-take a look below to see everything that qualifies.

Listing of Possible Medical Expenses: (this is only a partial list)
• Medicare premiums deducted from Social Security
• Supplementary medical insurance (Part B) under Medicare
• Abdominal supports
• Acupuncture service
• Ambulance service
• Anesthetist
• Arch supports
• Artificial limbs
• Back supports
• Braces
• Cardiographs
• Chiropodist
• Chiropractor
• Convalescent home (for medical treatment only)
• Crutches
• Dental services
• Dentures
• Dermatologist
• Eyeglasses
• Food or Beverages described by doctor for treatment of illness
• Gynecologist
• Hearing aid and batteries
• Home health services
• Hospital expenses
• Insulin Treatment
• Insurance Premiums (medical)
• Invalid chair
• Lab tests
• Lip reading lessons (in connection with disability)
• Neurologist
• Nursing services
• Occupational therapist
• Ophthalmologist
• Optician
• Optometrist
• Oral surgery
• Osteopath
• Pediatrician
• Physical examinations
• Physicians
• Physical therapy
• Radium therapy
• Podiatrist
• Prescription and drugs
• Psychiatrist
• Psychoanalyst
• Psychologist
• Psychotherapy
• Radium therapy
• Sacroiliac belt
• Seeing-eye-dog
• Speech therapist
• Splints
• Surgeon
• Telephone/teletype for deaf
• Transportation expenses (20 cents per mile)
• Vaccines
• Vitamins prescribed by doctor
• Wheelchairs
• Whirlpool baths for medical purposes
• X-rays

Note: Most medical expenses must be prescribed by a physician to be deductible from gross income for VA benefit qualification purposes.

Depending on what your income is and what your medical expenses are, you may qualify – even if your gross monthly income seems to be too high.  If you have questions about anything in the list above or aren’t sure if an expense you incur is “unreimbursed” or not, go ahead and call us.

If you’d like us to help you figure out if, and when, to apply, or If you have any questions with regard to Veterans Benefits, contact Fredrick P. Niemann, Esq. an experienced accredited Veterans Benefits attorney toll-free at 888 800-7442 or e-mail him at fniemann@hnlawfirm.com today.

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Can Creditor’s make a Claim against Joint Account Assets in New Jersey after Death?

November 2nd, 2011

By Fredrick P. Niemann, Esq., a New Jersey Probate Attorney

Recently a New Jersey intestate estate (death without a will or trust) passed under New Jersey law to the surviving spouse.  The decedent owned several joint bank accounts with his wife. The decedent had quite a few debts, including credit card and medical bills.  The question raised is whether non-probate assets are subject to creditor claims or if the estate can be deemed insolvent. 

The answer may surprise you.  Non probate assets are not immune from creditors against an estate of a deceased party to pay debts, taxes, and expenses of administration, if other assets of the estate are insufficient.  A surviving party, P.O.D. payee, or beneficiary who receives payment from a joint-party account after the death of a deceased party shall be responsible to the extent necessary to discharge the claims and debts unpaid by the decedent’s estate.  A proceeding in the Chancery Division of the New Jersey Supreme Court to assert this liability must be commenced no later than 2 years following the death of the decedent.  Sums recovered by the estate representative are to be administered as part of the decedent’s estate. 

If you have any questions regarding New Jersey Probate Law, please contact Fredrick P. Niemann, Esq. today. He can be reached at toll free 732-863-9900 or by email at fneimann@hnlawfirm.com. Mr. Niemann would be more than happy to answer any questions you may have.

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Estate Planning in New Jersey with Premarital Agreements Involving Second Marriages and Death

November 2nd, 2011

By Fredrick P. Niemann, Esq., a New Jersey Estate Planning Lawyer

New Jersey law allows a waiver of right to inherit an estate of a deceased spouse.  A widow’s premarital waiver of an elective share to the Estate of her late husband will however be voided after lawsuits are filed when the underlying premarital contract is found unenforceable. 

Often there are conflicts between a step-parent and the children of the deceased parent.  The issues involve the enforceability of the steps-parents’ rights to inherit a portion of his/her late husband’s estate, even though she had waived her rights to the estate before marriage.

Under New Jersey Law, because of the requirements of N.J.S.A. 3B:8-10 and N.J.S.A. 37:2-30, if a premarital agreement cannot be enforced then a waiver of rights is unenforceable.

Fredrick P. Niemann, Esq. of Hanlon Niemann, a central New Jersey law firm commented that a married person needs to exercise extreme caution and adherence to both form and substance who contemplate second and/or successive marriages and who want to protect their estate for the benefit of their children.  Mr. Niemann cautions that without a carefully prepared pre-marital agreement, “Older, financially successful men and women must be aware of the significant, almost enormous risks to them should the marriage fail.  By consulting with a qualified New Jersey Estate Planning attorney, the individual can take meaningful steps to protect their life’s savings for the benefit of all who are intended to receive it.”

If you have any questions regarding Premarital Agreements and New Jersey Estate Planning, contact Fredrick P. Niemann, Esq. toll-free at (888) 800-7442 or e-mail him at fniemann@hnlawfirm.com.  He will be happy to assist you.

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New Jersey Courts Settle Construction Contract Disputes

November 2nd, 2011

By Fredrick P. Niemann, Esq. a New Jersey Contract attorney

Disputes often arise within the construction process. Sometimes contractors and subcontractors provide services that the owner either deems to be insufficient or not what they agreed upon. Other times, an owner will refuse to pay a contractor because they simply do not have the money. Whatever the reason, the construction forum provides numerous disputes between parties that need to be settled.  While negotiations and settlements between the parties are often favorable, sometimes parties simply can’t agree. In these cases, the dispute is brought to the New Jersey Courts to figure out the proper course of action. The Courts offer a solution and finality to the dispute.

One recent dispute involved construction by plaintiff, a construction company, on the hotel of the defendant to help make the hotel more adequately able to handle inclement weather. After plaintiff completed the construction, they sought payment for repairing the storm drains and weatherproofing the rooms. Defendant refused to pay, claiming that the work was improper, insufficient, and overall not what they agreed to. The trial court, citing the fact that the defendant offered no expert testimony to show that plaintiff’s methods were improper, ruled for the plaintiff and awarded them the amount agreed to in the contract. Defendant appealed, the New Jersey Appellate Division deferred to the trial court judge, stating that they found no reason to doubt the judge’s findings, stating they were supported by adequate, substantial, and credible evidence.

Construction disputes are frequent and can provide serious headaches. An experienced Construction Law attorney can help negotiate a settlement with the opposing party or defend your case when you encounter an unreasonable adversary. It is important to hire a knowledgeable attorney who is familiar with local construction laws to ensure all your rights are upheld. Please call Fredrick P. Niemann, Esq., a qualified NJ Construction Law Attorney, toll-free at 888-800-7442. He can also be emailed at fniemann@hnlawfirm.com. He would be happy to answers any questions you may have related to New Jersey construction laws.

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HOW TO AVOID FORECLOSURE IN NEW JERSEY THROUGH NEGOTIATING A SHORT SALE

November 2nd, 2011

By Fredrick P. Niemann, Esq. a New Jersey Foreclosure lawyer

The intelligent alternative to bankruptcy or to a New Jersey foreclosure action by your lender

We all want to know about the unprecedented explosion in demand for attorneys who specialize in representing homeowners who must get rid of their homes through “short sales”.

Short sales in New Jersey are generally understood to be a sale where one or more mortgage holders agree to discount their debt so that the property can be sold at its current market value to a willing buyer.  Currently, short sales account for a significant percentage of residential transactions in New Jersey and across the nation and the numbers appear to be increasing.

Short Sales a Market Force in the New Jersey Residential Market Place

More and more homeowners find themselves underwater caused by their mortgage debt.  For owners who can no longer afford to keep mortgage payments current, a short sale is the intelligent alternative to bankruptcy or to foreclosure proceedings.  Short sales can preserve a homeowner’s creditworthiness and can help homeowners avoid the harsh long-term consequence of a foreclosure.

Banks and mortgage holders have become extremely interested in offering short sale discounts in an effort to minimize their own potential losses and to avoid the protracted process of foreclosing, almost two plus years in New Jersey.  Qualified New Jersey buyers, many of whom are prepared to invest significant down payments, are holding out for the lowest possible price.  Mortgage holders agree to absorb the short sale discounts, enabling such qualified buyers to buy “discounted deals”.

For a seller in a short sale, the process tends to be both unique and complex.  It usually involves intermediation between first and second mortgagees as well as the need for extensive drafting of agreements and releases.  Real estate agents can often act most effectively as the preliminary negotiators.  They initiate the short sale process by opening communication with loss mitigation officers, which in itself, is often a cumbersome process.  Agents can provide property specific data to the lender and they can arrange for the homeowner to provide proofs of hardship which are required by mortgagees before they will consider the terms of short sale.  While it is the real estate agent’s work that positions the loan for discounting  by the lender, it is ultimately a skilled short sale attorney, representing the seller, who secures meaningful protection for his clients and who brings the short sale to a successful conclusion.

In a market where an increasing number of homes are no longer worth as much as the liens which encumber them, many consumers are no longer able to afford their scheduled monthly mortgage payments, and judicial foreclosures are taking longer and longer to complete, ultimately increasing the number of short sales transactions.

Loss mitigation officers, who negotiate short sales on behalf of the lenders, are besieged with applications for short sales, from all over the country without having adequate knowledge of the differences among applicable state laws.  As a result, bottlenecks in the negotiation process occur and negotiations extend for several months.  It is among these bottlenecks that attorneys with intimate knowledge of the “workout” process find themselves able to bring order out of chaos and to propose practical and effective short sale formats that can satisfy the needs of both the loss mitigation officer and the homeowner.

Looking Forward

The trend in short sales is expected to continue well into 2010.  This is attributable to the recent failures of major mortgagees and to the fact that more adjustable mortgagors will experience the shock of payment “resets” in the first half of 2009.  Reportedly, more such resets will occur in the first six months of 2009 than have occurred in any one full year period in American history.  These resets are expected to generate a tidal wave of short sales.  In response to the current number of defaults, and in anticipation of even more in coming months, the holders of securitized mortgages are increasingly opting for loan discounting as their alternative to protracted, and ultimately costly, judicial foreclosures.  Simply put, short sales are cheaper and faster.

The increasing willingness of residential mortgage holders to grant discounts shows a preference for short sales as a practical means to cut their losses and to quickly purge their portfolios of at-risk loans.  Homeowners and real estate agents find a shortage of attorneys who are specifically trained in the specifics of short sales – including the ability to make a case for mortgagees to discount their loan balances – enabling the homes to be sold.  Eroding home prices have left many owners with mortgage debt that far exceeds selling prices of the mortgaged properties.  While institutional mortgages have redeployed personnel into newly created, massive loss mitigation departments, there has not been a corresponding expansion among attorneys who clearly understand the protocol.

Hanlon Niemann and Fredrick P. Niemann, Esq. have developed real experience to become aggressive short sales negotiators and are currently in strong demand as residential real estate values continue to decline.  The short sale attorney’s role is pivotal to the success of most short sales.  For more information, contact our managing partner, Fredrick P. Niemann at fniemann@hnlawfirm.com. Or call him toll-free at (888) 800-7442.  For more information, go to http://www.youtube.com/user/NJBusinessLaw#p/search/1/KqQkGNkCrco to learn more.

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Factors to consider when choosing the right Trustee for Your New Jersey Living Trust

October 28th, 2011

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

Your revocable living trust is much more than just a document that says who gets what percentage of your estate or which specific items that you leave behind when you die. A living trust details how and when heirs are to receive their inheritance, which is to take over any businesses in question, and many crucial issues of your estate. A living trust should be very specific in how your estate is to be administered. Therefore, the choice of a suitable is a very important decision that should be carefully considered in your estate planning process.

How Should You Choose the Trustee of your New Jersey Living Trusts: Choosing a Trusted Friend or Family Member
When selecting a person to be the trustee of your living trust, you need to answer an important question:

 Who can and will step into my place and confidently act as I would in carrying out my wishes?
 It is critically important to select a person that you have full faith and confidence in. You should feel at ease that he or she  would carry out your requests as they are written in your estate planning documents. Some typical choices include a:
 Close family friend
 Close family member
 Child
 Professional trustee
 A licensed professional such as a CPA or attorney

While you may feel completely secure in trusting this huge responsibility for carrying out your wishes to a family member, there are several situations when that is not wise or possible. In that case, your estate planning wishes can be addressed by a trusted outsider.

Living Trusts: Choosing an Outside Trustee

If you do not have a close friend or relative that you feel comfortable with, or if by selecting one of the heirs will cause conflict, then there are other options. You can hire an outside trustee like:

 Your bank
 A trust company
 Your lawyer
 A financial advisor
These professionals are generally experienced and knowledgeable in what is required to be a trustee and can often work more expediently and effectively, which saves the heirs money and time. While there are many benefits to not having a family member involved as the trustee of your living trust; there are also some drawbacks to using a bank, trust company or professional as your trustee.

 Higher fees and expenses
 Minimal estate value of around $700,000

No matter whom you select as your trustee, you want to be sure that you have full confidence in him or her to do exactly as you want, no matter what other people say. There may be heirs who are unhappy with the terms and conditions of the living trust and will try to sway your representative to do as they want. Knowing that you have a strong, trustworthy individual protecting your wishes will provide peace of mind.

If you have any questions about New Jersey Trusts or the role of a trustee in a New Jersey Trust, contact Fredrick P. Niemann, Esq. at 732-863-9900, or fniemann@hnlawfirm.com.  He is happy to meet with you to address your inquiries.  For further information, go to http://www.youtube.com/user/NJElderLawCenter#p/search/0/RHnI7RoPYds to learn more.

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