What is a SLAT Trust?

A Spousal Lifetime Access Trust or SLAT trust is a facility often used to reduce estate taxation. Here’s some information on how this trust works and it’s benefits for married couples, from a top estate planning attorney in New Jersey.

How Does A SLAT Trust Work? 

Unlike other bypass trusts like the marital deduction trust and family/spousal bypass trust, this trust is created during your lifetime rather than at the point of your death. It is an irrevocable trust designed to support the surviving spouse and children/dependents and are generally treated as grantor trusts, so the grantor will be responsible for paying the income tax of the trust.

Essentially, what happens is that the grantor of the trust makes a gift for transfer tax purposes but names their spouse and dependents as the recipients of the gift. The SLAT trust allows the gift to remain untouched, allowing assets to grow free of federal or estate tax, while still making the amount available to the grantor indirectly through their spouse if needed. It is important therefore to carefully consider the legal implications of a divorce, remarriage or death of a spouse, as the SLAT is irrevocable and beneficiary interests are not going to change once the trust is in place.

Some of the most notable benefits of a SLAT trust include:

  • Avoiding probate.
  • Protection of assets from creditors or claims in the event of a divorce, etc.
  • Reduction or avoidance of estate tax.
  • Trust can grow tax-free.
  • Reduction or avoidance of capital gains on death tax.
  • Can function as life insurance trusts.

Set Up a Comprehensive Estate Plan with a NJ Estate Planning Specialist 

At Sedita, Campisano and Campisano in New Jersey, estate planning attorney Frank Campisano is ready to assist you with all your estate planning needs – whether you need to make a business succession plan, Last Will and Testament, Power of Attorney, a Living trust, SLAT trust or to minimize inheritance tax on your estate.

Contact us today and let us deliver expert estate planning advice to take care of all your wishes – whether your business is big or small. For more information, please visit our website at http://www.scclegal.com/

 

Inside Reverse Mortgage Scams

Medicaid Application

Reverse mortgages are a useful tool for seniors who often have significant equity in their homes (they have often made significant progress in paying off their homes) and want to be able to access that money to convert it into supplemental income. This is a fairly complex process, leaving the door open to scam artists and unscrupulous lenders to target seniors and mislead them – to the point where many people have lost their homes. Here’s some essential information about identifying and avoiding these dangerous scams, from a leading elder law attorney in New Jersey.

How a Legal Reverse Mortgage Works 

Essentially, this works in the reverse to a regular mortgage – instead of taking out a loan and paying it back, the lender makes payments to you. The most common reverse mortgage product is the Home Equity Conversion Mortgage (HCEM), issued by private lenders and insured by the Federal Housing Administration. To qualify, you have to meet certain criteria including being a homeowner of 62 years or older, have a certain amount of equity in your home, and that you reside in the property that you’re applying for. There is a limit on how much of your equity you can access through this loan – currently set at $636,150.

How to Spot Reverse Mortgage Scams 

Keep your eyes peeled for these warning signs:

  • High-pressure sales tactics: Some mortgage brokers use strong-arm tactics to sign people up for reverse mortgages, whether they need them or not – and they specifically target the elderly. Unsolicited visits and phone calls by mortgage brokers should be ignored. According to the FBI, other sales tactics include approaching seniors through local churches and investment seminars.
  • Misrepresenting the risk: With any loan comes risk – never trust someone who offers a reverse mortgage and tells you that there are no risks involved. All reverse mortgages become due and payable at some point and this can mean you lose your home – if the property is transferred or sold, if the borrower moves out of the home, or if the borrower doesn’t meet the mortgage obligations (insurance premiums, property tax payments etc.)
  • Misleading advertising: A reverse mortgage is not free money or free income – it is still a loan with very strict conditions, fees and structure. Any advertisement that states otherwise this is misleading and designed to take advantage of people who don’t have a clear understanding of loan structures.
  • Encouragement to take out a lump sum early: Taking out a lump sum in your early 60s often leads to the amount being used up quickly – leaving you with nothing in your later years. As a result, many seniors don’t have the money to pay the insurance and property taxes required by the lender, which forces the loan to become due and your home into foreclosure.

If you are considering a reverse mortgage, it’s always best to do a lot of research on the risks and benefits yourself and speak to your elder law attorney or a trusted financial advisor before taking on a potentially risky loan. This way, you get the right information and the best financial program for your needs.

Consult with a Leading Elder Law Attorney in NJ Today 

Experienced in elder law, compassionate and committed to his clients, you’ll receive the highest quality legal expertise and guidance you need from Frank R. Campisano. In addition, you can also prepare additional estate planning documents, such as your Last Will and Testament, Healthcare Proxy/Medical Directive, Power of Attorney documents and trusts. For more compassionate legal guidance and a free consultation, please contact us or visit our website at http://www.scclegal.com/

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