What is a 529 Plan and Should it be Part of Your Estate Planning Strategy?

There are many savings options available that can be used as part of your estate plan, and a 529 plan is one of these options. Here are some insights from your estate planning attorney in New Jersey.

What is a 529 Plan?

This is a college savings plan that is exempt from federal taxes. Introduced in 1996, they are designed to help taxpayers to save more effectively for college expenses. Anyone over the age of 18 can open a 529 plan, whether it’s to save for your child or grandchild’s education, or for your own.

There are two types of 529 plan – a prepaid tuition plan and a college savings investment plan. The one plan is locked to current tuition costs, while the investment plan allows your savings to be invested in widely-held mutual funds to be managed by an investment firm, giving your money the best chance to grow and cover the optimal amount of college costs.

Federal and State Policies on 529 Plans

Each state has its own policies regarding these plans, but they are all subject to federal policies regardless of where you opened the plan or how your account is managed. This means that the account can only be held by one person and can only benefit one person (the beneficiary can be a different person to the account holder). There are no income restrictions on who can own or pay into a 529 plan, and they are not subject to gift taxation.

There are no federal income tax benefits for contributing to a 529 plan, but the benefit comes in the form of the growth of your investment, which is tax-deferred. You also won’t pay state or federal taxes on money that is withdrawn from the account to be used for qualified college expenses.

What if My Child Does Not Go to College or Require the Funds?

If your beneficiary is unable to go to college, chooses not to go or wins a full ride through a scholarship program, what happens to the money in a 529 plan? In these situations, you have a few options. Firstly, you can change the beneficiary of the plan to someone who does need it or hold onto the plan until you have a grandchild. Secondly, you can combine your plan with another plan once a year, giving another child greater coverage of their college expenses. Thirdly, you can use it for non-educational purposes. This last option does mean that you’ll have to pay income tax on the money the investment earned (not the full amount) along with a 10% penalty.

NJ Estate Planning Helps Put Education Savings First 

Frank R. Campisano is an experienced estate planning attorney with a long history of service and loyalty to his New Jersey clients. In addition to assisting you with creating, storing or updating your Last Will and Testament, he can assist you with 529 plans, college savings strategies, developing trusts, healthcare proxies, Power of Attorney documentation and much more.

For a free consultation, please contact us today and speak to Frank R. Campisano or visit our website at http://www.scclegal.com/

Incentive Trusts – Giving You Greater Control Over Your Estate

If you want to have the advantages of a trust but greater control over the assets within it, an incentive trust may be the right tool for your estate plan. Here is a quick guide to how these trusts work and the different benefits they offer, from an estate planning attorney in New Jersey.

What is an Incentive Trust? 

This is a legally binding trust where the trustee holds and manages the assets granted to the trust by the grantor. Unlike other trusts, the trustee must adhere to specific requirements and meet certain conditions that the grantor sets out in the formation of the trust in order to receive funds.

These trusts are therefore useful as a means of the grantor to provide funds for a specific purpose for a trustee. For example, a grandparent may want to leave an inheritance to a grandchild but not want them to become reliant on the funds for their living. The trust can then be set up to only provide funds when the grandchild has achieved a certain level of education.

Another good use of this type of trust is to ensure that your children or grandchildren are ready to handle their inheritance before they receive it. This can mean portioning it out at different stages of their life according to their age or life events (graduation, marriage, first child) and specifying different uses for it (buying a property, funding education or healthcare, or even funding their retirement).

Passing on Family Values and Responsibility, Not Ruling from the Grave 

Because an incentive trust gives the grantor very specific control over the distribution of the trust’s assets, it can be used to rule from the grave – which is understandable but not advisable. After all, it is difficult to know or understand the personal challenges and economic conditions facing the generations that come after us.

However, if done with careful thought and input from trusted advisors, these trusts can support your heirs rather than control them. By aligning your conditions with your values and allowing trustees to develop their own sense of financial responsibility, your heirs can be guided to their own success.

Develop an Estate Plan that Supports and Cares for Loved Ones with Your Estate planning attorney in New Jersey 

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, a personal estate plan, Last Will and Testament, Power of Attorney, a Living trust or to minimize inheritance tax on your estate.

Let us deliver expert estate planning advice to take care of all your wishes – whether your needs are big or small. For more information, contact us today.

Your IRA is a Powerful Estate Planning Tool

When we first think of estate planning tools, we tend to think of Wills, trusts and financial directives – but we forget about one very useful tool that’s often just sitting on the back-burner: your Individual Retirement Annuity (IRA).

As a retirement planning tool, IRAs are well-known for their benefits, including IRA assets being compounded on a tax-deferred or even tax-free basis (Roth IRAs). For those of us who are fortunate enough not to require their IRA to fund their retirement, however, it can be used to the benefit of your heirs by changing it into a so-called “stretch IRA”.

How Can I Change My IRA into a Stretch IRA? 

This is simply a matter of naming a beneficiary who will take many years before they qualify for the benefits – a much younger spouse, a child or even a grandchild. For minors, it’s best to speak to your estate planning attorney about developing a trust that allows this strategy, as it gives you more control over the use and distribution of the IRA funds). Your spouse is able to roll the funds over to their own IRA after they inherit, which enables the funds to keep growing (tax-deferred or tax-free) until they decide to utilize them. As a result of the compound growth on these accounts, the longer the benefits are deferred, the more substantial they will become. This could form a significant lump sum for your loved one, allowing them to:

  • Fund their eventual retirement
  • Take a lump sum distribution of the IRA’s balance
  • Withdraw the funds by the end of the year of the 5th anniversary of your death
  • Withdraw the funds over your “remaining” life expectancy as cucullated by the IRS
  • Or hold the funds in an inherited IRA to spread the required monthly distributions over their own life expectancy. (Often the choice that maximizes the benefits of this strategy).

Is this the Right Estate Planning Strategy for You? Speak to Your Estate Planning Attorney in New Jersey 

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 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 needs are big or small. For more information, please visit our website at http://www.scclegal.com/

5 Mistakes to Avoid When Creating and Managing a Trust

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A trust can be a highly functional and useful estate planning tool, helping you provide for dependents more effectively, avoid probate and even reduce taxation on your estate. However, according to your estate planning attorney in New Jersey, a trust is only effective when it is set up and managed properly – and this means avoiding these common mistakes.

  1. Not funding your trust: In order to deliver the above benefits, you have to fund the trust by moving assets into it. Without assets, there will be nothing to deliver to the beneficiaries. All assets outside the trust will be subject to standard legal, probate and taxation procedures.
  2. Not having clear instructions: Trusts are fairly complex legal structures and clear instructions are necessary to ensure that it functions in line with your wishes. You need to create instructions around the function of the trust, who you would like to benefit from the trust, how you would like your assets to be divided, and so forth.
  3. Setting up the wrong type of trust: There are quite a few different types of trusts available when you’re creating your estate plan, and each type suits a different goal. For example, one type of trust has different tax implications to another, some can be changed while others cannot be modified at all, and some are better for providing funds to special needs children than others. It’s vital that you work with your estate planning attorney to evaluate different trust options and commit to one that will actually achieve your goals.
  4. Choosing the wrong trustee: Choosing a trustee is an incredibly important choice that deserves serious thought, as appointing the wrong person into this position could destroy your trust. Not only could this lead to abuse of your trust and legal problems, it could destroy relationships as well.
  5. Failing to update your trust: Like any estate planning document, your trust shouldn’t be ignored for your lifetime after you’ve set it up. As your circumstances change and evolve, your trust should be reviewed and adjusted to ensure that it still aligns with your wishes. Significant life events like marriage, divorce, and children are all going times to review your trust, Last Will and Testament and other estate planning documents.

Create or Review Your Trust Today – Speak to Your Estate Planning Attorney in NJ 

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 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 needs are big or small. For more information, please visit our website at http://www.scclegal.com/

When Should I Revise My Will?

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We’re all aware that having a Last Will and Testament is a good idea – after all, it protects assets from taxation and ensures our dependents are properly cared for. But when should your existing Will be revised?

Update Your Last Will and Testament When These Major Life Changes Happen

There are certain life events that have a significant impact on your financial wellbeing or responsibilities, and the changes they bring mean it’s time to update or re-write your Will. Here are a few:

  • Getting married.
  • Getting divorced – ex-spouses are entitled to any inheritance named in your most recent, legal Will.
  • Developing health complications – you or your spouse or your child.
  • Caring for a special needs child.
  • Having children, blending your family or having grandchildren – including providing financial care for a child, inheritance, and naming legal guardians.
  • Moving into another state or country, as you’ll have to comply with different estate and probate laws.
  • Receiving an inheritance.
  • Getting involved with charitable organizations.
  • Significant changes in law (especially regarding estate taxation, etc.).

Other Legal Documents to Update Simultaneously

To ensure that your estate is fully in line with your new Will, your Living Will should also be created or updated. This is a legal document that outlines your desires regarding future medical treatment and care in the event that you are unable to express informed consent, including an advanced directive to ensure that your wishes regarding advanced life-saving care are respected.

Similarly, you should take this opportunity to also create or update your durable Power of Attorney. This is another essential tool that ensures that certain decisions, including financial decisions, are made in line with your wishes in the event that you are incapacitated

Speak to Your Estate Planning Attorney in New Jersey today

Frank R. Campisano is an experienced estate planning attorney with a long history of service and loyalty to his New Jersey clients. In addition to assisting you with creating, storing or updating your Last Will and Testament, he can assist you with developing trusts, healthcare proxies, Power of Attorney documentation and much more.

For a free consultation, please contact us today and speak to Frank R. Campisano or visit our website at http://www.scclegal.com/

Can I Create a Trust While in Debt?

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If you’re in debt, you’re not alone. In fact, 2017 statistics showed that the total debt for American households reached a massive $12.84 trillion, with 4 out of 5 people living in the red. For most people, their debt is usually in the form of mortgages and student loan debt, but credit card, auto and medical debt are also common – with medical debt being the leading cause of personal bankruptcy filings in the USA. Being in debt makes smart financial planning even more critical – so how to trusts work into this plan?

Will a Trust Protect My Assets? 

The most popular reason for creating a trust is to protect assets from taxation and lengthy probate processes, ensuring that beneficiaries are provided for. However, a trust cannot protect your assets from creditors. If you or one of your beneficiaries file for bankruptcy, for example, the trust could be seized by creditors to pay off debts. However, there are types of trusts that can offer asset protection in these circumstances.

Irrevocable Trusts for Asset Protection 

Unlike a revocable trust, an irrevocable trust can offer the type of asset protection you may be looking for. Once someone has created an irrevocable trust, they no longer legally own the assets within the trust and cannot control the distribution of those assets. The trust also cannot be modified by the creator of the trust. This means that future creditors cannot access these assets to settle a claim against your debt.

However, it is important to remember that a court can overturn the transfer of assets into a trust if it determines that the purpose of the transfer was to defraud creditors. This means that the transfer of the assets was fraudulent, and this can carry serious legal penalties. This makes it essential that you work with an experienced estate planning attorney to ensure that you have effective, legal asset protection.

Plan for Asset Protection with a Leading NJ Estate Planning Attorney 

You deserve a legal solution that is uniquely tailored to your needs, so speak to New Jersey estate planning attorney Frank R. Campisano today. Whether you want to create a trust to reduce estate taxes or provide for your dependents, require a Last Will and Testament or are interested in updating more complex estate planning documents such as Medical Directives and Powers of Attorney documents, he can ensure that the right legal documentation is developed in order to meet your specific wishes.

For peace of mind estate planning or advice on creating your Last Will and Testament, please contact Frank R. Campisano or visit our website today at http://www.scclegal.com/

Is it Enough to Just Have a Will?

Did you know that according to research by the AARP (formerly known as the American Association for Retired Persons), 6 in 10 American adults don’t have a Last Will and Testament? The statistics get worse in the younger segments of society, with a massive 78% of Millennials (adults between 18-36) and 64% of Generation Xers (age 37-52) without a Will or any form of estate plan. So, it’s easy to think that if you do have a Last Will and Testament, you’re doing really well in terms of planning for the future.

A Last Will and Testament is the Foundation of Your Estate Plan 

While a Last Will and Testament is an important document that every single adult should have, it’s a very simple and limited tool in many ways. This means that if you have anything other than very basic planning needs, it’s not enough to accomplish what you want to do with your estate. For this, you need estate planning – a comprehensive strategy for determining:

  • The distribution of your assets
  • How your assets should be managed in the event of disability or you become unable to manage your own financial decisions
  • How your healthcare should be managed in the event that you become unable to manage these decisions yourself
  • How best to manage your financial assets to save you and your heirs substantial legal fees and taxation
  • How to minimize the probate process (which can be lengthy even in the event of an uncontested Will)

In this way, an estate plan is also an estate plan. It allows you to set up specific trusts that work for your particular needs (for example, a trust that minimizes taxation on your estate or provides specific care for a loved one with special needs or provides for minor children) and manage your finances in a way that ensures your heirs receive your hard-earned assets – not the state.

This doesn’t mean that estate plans are only for the wealthy – no matter the size or complexity of your assets, the most important thing is to develop a plan that suits you and provides for your loved ones.

Regularly Review Your Will and Estate Plan with Your Estate Planning Attorney in New Jersey 

Estate plans need to be kept up-to-date as our lives change and evolve, whether you’re starting a new business, buying investment property, or expanding your family. 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, set up Trusts 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. For more information, please visit our website at http://www.scclegal.com/

 

Important Changes to Veteran Care Legislation

Recently, the US Senate passed new legislation that impacts on veteran care. The bill, known as S2373 or the VA Mission Act of 2018, expands on long-term care and post-acute care (LT/PAC) options. Here are some insights into what this bill means, and the changes veterans can expect, from a leading elder law attorney in New Jersey.

New Care Program and Reimbursement Process for Veterans 

Having been passed by both Houses of Congress, it will be signed into law to create the Veterans Community Care program and set in place a new claim reimbursement process that will come into action in 2019.

Currently, there is a disparity between Medicare Parts A and B or Medicaid providers who were not considered to be federal contractors. Current providers with VA patients are considered to be federal contractors and as such, have to comply with regulations in the Service Contract Act which are more complex and rigorous than those required by Medicare and Medicaid regulations. The VA Mission Act of 2018 will aim to solve this issue, removing excessive relations, red tape and legal issues to ensure that there are more LT/PAC options like nursing home care, home and community-based care/services available to providers and veterans that meet Medicare and Medicaid compliance.

Other key provisions of the proposed law include increasing access to long-term care options for veterans in their home communities, ensuring better access to friends and family. Caregiver benefits are also going be expanded to include all veterans regardless of when they served their country, where previously it only included post 9/11 veterans. The 30-day/40-mile rule which often required veterans to travel long distances to access their care benefits will also be removed.

Care-related services through the VA will also be streamlined, ensuring that currently enrolled vets who have accessed the VA healthcare system in the last 2 years will automatically gain access to community clinics, that VA providers who do not treat veterans are removed from the system, and that the VA will be required to schedule appointments in a timely manner.

Want to Find Out More? Speak to a Leading Elder Law Attorney in New Jersey 

This bill is an attempt to simplify and streamline a system that has long been criticized for being overly complicated, helping to ensure that veterans receive the care they need in a way that is timely, easier and based within local communities. To find out more about how these changes will affect you or a loved one, speak to your elder law attorney.

Frank R. Campisano is highly experienced and compassionate elder law attorney in New Jersey with considerable knowledge of veterans’ benefits, including assisting with applications, appeals and other Veterans and elder law issues. In addition to this assistance, he can help you with navigating issues around estate planning, as well as drawing up other legal documents including a Power of Attorney, Last Will and Testament, Medical Directive and more.

For a free consultation, please contact us today and speak to Frank R. Campisano or visit our website at http://www.scclegal.com/

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/

 

What is Legacy Planning All About?

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Legacy planning is a term that’s increasingly associated with estate planning – but what is it really all about and should you consider it? Here’s some insight from an estate planning attorney in NJ.

What is Legacy Planning? 

Essentially, this is a more comprehensive estate planning and financial strategy that focuses on ensuring a smooth transition of wealth and/or assets over multiple generations to come. It is especially important for people with small businesses or other assets that require maintenance that they would like to keep in the family for as long as possible. While ensuring those assets are legally protected through the decades to come is a main focus of these strategies, many people also view it as a way of reducing potential conflict and passing on family values – a way of protecting their family relationships as well as preserving their wealth.

Who Can Benefit from Legacy Planning?

“Legacy” is a word most often associated with the famous and wealthy, but the truth is that most families can benefit from these strategies – we all have a legacy. Here are some of the main goals of legacy planning – if they resonate with you, then it’s a good idea to investigate this option further with your estate planning attorney.

  • Deliver financial security: Legacy planning is about caring for those you leave behind and ensuring they have financial security. The strategy is to firstly develop your own financial security as far as possible to ensure that your wealth is growing as much as possible, then to establish goals for how you would like your assets to be distributed and how you would like your heirs to benefit. It’s about making your hard-earned money work hard for you, your heirs, and future generations.
  • Creating continuity and longevity: This plan is all about ensuring that something important to you is passed down properly through the generations. It’s not only about who will inherit the asset or wealth, it’s about how to protect it and manage it properly so that it continues to grow and pass on to new generations – and not dwindle away. This is especially important for family businesses.
  • Address taxation: Estate and other taxes are always a concern when you have assets or wealth and want to ensure it goes to your loved ones rather than the government. Legacy planning ensures that the tax burden is minimized and addressed from the start, to ensure you know exactly what will happen and have the peace of mind that comes from knowing you r heirs will benefit as much as possible.

Want to Find Out More About Legacy Planning? Speak to Your Estate Planning Attorney in NJ 

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 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/

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