J. Jeffrey Press, P.A.Parsippany Estate Planning | Estate Administration | Taxation2023-07-17T09:08:34Zhttps://www.jpresslaw.com/feed/atom/WordPress/wp-content/uploads/sites/1402397/2020/11/cropped-Site-Identity-min-32x32.pngOn Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509742021-10-06T03:45:36Z2021-10-06T03:45:36Zestate plan. This document outlines who will receive your assets after you die and who will be responsible for carrying out the decisions dictated in your will.
1. To decide who receives your assets
Your will determines who will receive your possessions after you die, whether these include a prized classic car, a family heirloom or your life savings. If you do not outline who receives your assets by creating a will, state law will kick in and make these decisions for you.
2. To name a guardian for minor children
Your will gives you the opportunity to name a guardian for any minor children you have. If you die, this person would step in and take care of your children. Choose your children’s guardian carefully and make sure it is someone who would provide your children with loving care.
3. To leave a legacy
You can leave assets to charity and not just your friends and loved ones in your will. By naming specific charitable organizations in your will, you can ensure your assets go towards a good cause.
Losing a loved one is a difficult experience. By creating a will, your family will not have to negotiate with family members and lawyers over who will receive your assets while they grieve.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509712021-09-28T14:25:09Z2021-09-28T14:25:09Zmost favorable interests while carrying out your duties.
Timely asset distribution
You must ensure you distribute estate assets to beneficiaries promptly. States have different definitions of "promptly," so research New Jersey's timeframe. This keeps the process from slowing to a standstill because the executor stops tending to her or his obligations.
Beneficiary status notification
As an estate executor, you must contact the deceased's beneficiaries to let them know they stand to inherit assets. Inform beneficiaries sooner rather than later, so they may contest the will's contents if they want to. To reduce confusion and ambiguity, send notices to beneficiaries in writing. Once beneficiaries learn of their status, they may access information about the estate's assets, estate debt and your plan for navigating the debt.
Fair inheritance distribution
Some tasks fall outside an executor's responsibilities. For instance, you do not have to distribute assets the moment you notify heirs of their status. You may first need to clear the estate's debts or allow creditors the chance to make claims against the estate. Tending to these tasks could take several months.
Executors deserve to know the full scope of their responsibilities while tending to a friend or relative's estate. That way, they know what steps to take to honor their loved one's final wishes the way the person intended.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509682021-09-17T20:17:31Z2021-09-17T20:17:31Zcertain variables.
What determines the amount of tax imposed
Several factors determine how much inheritance tax your loved ones must pay after your death. These factors include your relationship with your beneficiary and the value of the assets you left him or her. Additional determining factors include the type of assets transferred and whether you lived in New Jersey or a different state.
What determines tax class
NJ.com reports that beneficiaries fall into different “tax classes,” and that tax class determines how much inheritance tax they must pay. There are four tax classes, Class A, Class C, Class D and Class E. The state repealed Class B in the 1960s.
Beneficiaries that fall into Class A do not have to pay inheritance taxes. Beneficiaries in Class C do not face taxes for the first $25,000 received. However, they do encounter inheritance taxes on anything received thereafter. Those in Class D must pay a 15% tax on the first $700,000 and 16% on anything over that amount. Class E beneficiaries, like Class A beneficiaries, do not have to pay inheritance taxes.
New Jersey is one of only six states nationwide to uphold an inheritance tax. The state’s inheritance tax rates fall between 11% and 16%, depending on circumstances.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509642021-09-07T15:43:34Z2021-09-08T15:43:23Zrefers to a tax presence in the state. If the trust that you administer has sufficient nexus, you have to pay taxes on its behalf. Otherwise, it is exempt.
How do you know whether the trust has sufficient tax nexus?
Whether the trust has sufficient tax nexus depends partly on its type. For example, if you administer an institutional trust from an office outside of New Jersey, it still has a tax presence if the institution has offices within the state from which it conducts business. A resident trust does not have sufficient nexus if it meets all of the following three conditions:
No executors or trustees in New Jersey
No income from New Jersey sources
No physical assets in New Jersey
What do you do if the trust does not have sufficient nexus?
If you administer a trust that meets the criteria for tax exemption on the basis of insufficient nexus, you still have to file a state income tax form on behalf of the trust. However, you can check the box indicating that the trust is not subject to tax. When you submit the form, you must also provide a statement certifying the trust's tax status.
When administering a trust, you need to learn what unfamiliar legal terms mean so you can live up to your responsibilities.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509612021-09-07T15:38:53Z2021-09-07T15:38:53Zsurviving spouse receives an individual's property, which may include business interests.
Absent a will, a surviving spouse, children or parents may find ownership of a business divided between them. New Jersey’s laws generally allow the probate court to distribute 25% of a business to an individual's surviving parents or children and the remainder to a surviving spouse.
Unplanned ownership may harm a business
Without a spouse, children or parents, a deceased individual's sibling or closest living relative may take ownership of a business. When surviving heirs control an enterprise, however, they may not have the experience required to effectively manage its operations. Positive relationships built over time with financial institutions, customers and suppliers may become compromised. A lack of instructions in an estate plan regarding a business’s management could harm an enterprise that took years to build.
Planning for a qualified successor
Owners may avoid inadvertently causing damage to their businesses by proactively selecting and training a suitable successor. As reported by Kiplinger's Small Business, a 64-year-old New Jersey small business owner sold his company to a long-term employee who was familiar with the operation. The well-chosen successor was able to make the purchase with a six-year payment arrangement.
An estate plan may include instructions for a successor who takes over a business if an owner becomes severely ill, injured or incapacitated. This may avoid potentially unqualified heirs taking control of a venture, a situation which could lead to a loss of customers, goodwill and revenue. A business succession strategy made before the owner’s death, however, may help provide for the enterprise’s longevity.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509572021-08-28T15:59:50Z2021-08-28T15:59:50Ztypes of taxes at the state and federal levels. It typically will depend on the size and value of your estate as to whether you will owe such taxes. You can prepare for taxation by learning more about the types of taxation that may occur.
Federal taxes
You will have to pay a federal estate tax as a U.S. citizen, but the rules vary on what the government considers taxable, so you may end up not owning this tax. You may also have to pay a gift tax, which covers the transfer of assets when you gift items over a certain value to someone else. You may pay this while you are still alive.
Your estate may also pay a generation-skipping transfer tax. This tax occurs when you leave items to a generation two or more below you.
State taxes
The Official Site of the State of New Jersey explains you may also have to pay state estate taxes. The state does have an inheritance tax imposed on the value of the assets you leave and to whom you leave them. The state does not have an actual estate tax.
Estate taxes may or may not impact your estate after your death. You should plan ahead to pay them in order to help ensure you do not leave your heirs with a tax bill they cannot pay.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509072021-08-07T19:53:48Z2021-08-07T19:53:48Zyou may ensure your heirs become legal owners of your main residence when you die. Learn how to use estate planning tools to reassure yourself and your loved ones.
Gift property to your trust
While drafting your trust documents, name yourself as trustee and your heirs as beneficiaries. Then, sign deeds as your home's owner to gift the residence to your trust. To successfully leave your home to heirs, it must be your primary residence, have a standard home loan attached and have no more than five units in it.
Do what you wish with your home
Do not worry about anything happening to your home once you place it in a trust. While you may use your residence as you see fit, consider establishing a successor trustee to replace you as trustee when you die.
Know that your trust endures
When you die, your home does not qualify for probate as long as it remains in your trust. You may leave instructions for your successor trustee regarding your desires for the home, such as passing it on to your beneficiaries. If you worry about your property qualifying for the estate tax, you may place it in an irrevocable trust. That way, not only do your benefactors not need to worry about the estate tax, but creditors cannot lay claim to anything in your irrevocable trust.
You likely made a lot of fond memories in your home and have more to make in the coming years. With the right trust and estate planning strategy, you protect those memories and the home you made them in.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509042021-07-23T05:18:56Z2021-07-23T05:18:56ZUnderstanding the trust
Forbes discusses the role of a beneficiary in an estate plan. As mentioned, their role serves a more passive purpose compared to other people, such as trustees. While trustees have a list of duties they must fulfill, this is not the same for beneficiaries.
However, as a beneficiary, there are several points a person can understand which can better their relationship and optimize interest in the trust. They must understand:
The objective of investment
The nature of their interest in the trust
The purpose the trust serves, as described by the grantor
On top of that, they need to understand factors that go into a trustee determining if they should make discretionary distributions. This can include resources available to them as a beneficiary, the income tax consequences of said distribution and the stated purpose of the grantor for distributions.
Building your relationship
By understanding other obligations of trustees, it can help them build a beneficial relationship as a beneficiary. This can help your beneficiaries maintain harmony and productivity, which will help keep the process of handling your estate go smoothly after your death.
You can also work with your legal team to ensure that things go as smoothly as possible, as matters involving the estate often get tricky to manage.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=509012021-07-19T14:09:17Z2021-07-19T14:09:17Zvary depending on the size and nature of the estate, in general, you can expect them to include the following:
Locating the original will
Obtaining certified copies of the death certificate
Inventorying and valuing the estate’s assets
Overseeing and managing the assets during the probate process
Paying any legitimate bills of the decedent
Paying any estate tax due
Distributing the remaining estate assets to the heirs as provided for in the will
Officially closing the estate
Estate versus inheritance taxes
Per the New Jersey Division of Taxation, the amount of federal estate tax due, if any, depends on the value of the decedent’s gross estate. The estate itself pays this tax. New Jersey has no state estate tax.
New Jersey does, however, have an inheritance tax. Individual heirs pay this tax themselves depending on the value of the assets they inherit from the decedent if they are Class C beneficiaries; i.e., siblings and children-in-law of the decedent, or Class D beneficiaries, i.e., nieces, nephews, aunts, uncles, friends and other nonrelatives.
New Jersey exempts Class A beneficiaries, i.e., the surviving spouse, children, grandchildren and parents of the decedent, from inheritance taxes, as well as Class E beneficiaries, i.e., charitable institutions. Nevertheless, you must file a New Jersey inheritance tax return if the deceased’s heirs include any Class C, D or E beneficiaries.]]>On Behalf of J. Jeffrey Press, P.A.https://www.jpresslaw.com/?p=508992021-07-15T12:05:53Z2021-07-15T12:05:53ZConcerned individuals can contest a will when they suspect the deceased person was under someone else's unwanted influence. The person challenging the estate must prove undue influence by the defendant.Review the factors that influence cases involving allegations of undue influence in New Jersey.
Definition of undue influence
The plaintiff in an undue influence case must show that the defendant exercised a substantial level of undue influence over the deceased person's decisions. They must also illustrate that this influence robbed the deceased person of free will when he or she made or changed the estate documents, directly leading to these changes.
Presumption of undue influence
The court presumes undue influence only in the presence of suspicious circumstances surrounding a confidential relationship between the deceased person and a benefactor. The confidential relationship in question could be that of a caretaker, family member, or anyone else the deceased person relied on for regular needs and companionship. Suspicious circumstances could include tension within the family, uneven bequests to children with no explanation, isolation of the deceased person during the last months of life, use of a new legal team or dramatic change in the person's estate plan documents.When a person dies in Morris County, his or her executor submits the will to the court along with a petition to begin probate. At this point, family members who suspect undue influence can challenge the will. The Surrogate Court will investigate the challenge during the probate process and determine how best to proceed with settling the person's estate and distributing his or her assets. ]]>