What are the Tax Implications for a Trust?

elder law trusts nj

One of the primary goals for estate planning is to minimize taxation on your estate, ensuring that your assets got towards caring for your family and not towards the state. One of the most effective tools used in estate planning is a trust. Here’s some insight into how family trusts are taxed, from an elder law attorney in New Jersey.

Grantor vs. Non-Grantor Trusts

Trusts fall into two categories that are especially relevant when talking about taxation. A grantor trust often allows the person creating the trust the right to withdraw assets from the trust – so, most revocable trusts are grantor trusts. This means that the trust does not have to file its own tax return. Instead, the grantor much include any income from the tax in their own, individual tax return and pay accordingly.

If a trust does not allow this (an irrevocable trust, for example), then it will have to file a tax return that can mean that the trust itself pays tax and that those beneficiaries earning an income from the trust will have to pay tax as well. This can become incredibly complex – for example, if they trust has to pay out it’s income to a beneficiary, then it is entitled to certain deductions, while remaining income that stays within the trust gets taxed to the trust directly.

Always Get Expert Advice When Creating a Trust 

If you’ve looked into creating a trust for your family, then you know that there are many different trusts out there to meet a vast range of goals. These trusts can also be tailored to your specific needs, which makes them even more complex. This makes it essential that you work with an experienced professional to develop a trust that achieves your goals and that you are completely aware of how taxation will impact this trust, so that you can make the best possible informed decision.

Speak to a Leading Elder Law Attorney in NJ Today for Compassionate Advice 

If you would like assistance in understanding and accessing your Medicaid and Medicare benefits, speak to Frank R. Campisano today. Experienced in elder law, compassionate and committed to his clients, you’ll receive the highest quality legal expertise and guidance that will help you secure better care. In addition, you can also prepare additional estate planning documents, such as your Last Will and Testament, Healthcare Proxy, 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/

A Crummey Trust may benefit your estate plan

elder law trusts nj

Trusts are fast becoming a popular means of protecting assets from taxation and probate while benefitting heirs, and there are many different types of legal trusts available for achieving this. One such example is a Crummey Trust. Here is some insight into this useful tool, from a leading estate planning attorney in New Jersey.

What is a Crummey Trust? 

This is a trust that allows a parent to make gifts to his or her children that are excluded from gift or estate taxation as long as they are equal or less than the permitted value. At the moment, this is $13,000 per year, but is subject to change at any time.

What are the advantages of this type of trust? 

While gifting is a great tool for benefitting your heirs during your lifetime in a tax-free way, the problem is that for minor children, $13,000 is far too much for them to handle responsibly. Most parents would prefer that this money goes to their child at a more suitable age where they can use it well, but would also like to get the benefits of starting the tax-free gifting process as early as possible.

The Crummey Trust solves this issue by allowing parents to gift the annual amount to their children every year, tax-free, but stipulate at exactly which age their child or children are allowed to access the funds. The trustee is able to invest the money within the trust and the children will have the full benefit of the asset at an age designated by you.

In traditional trusts, the child has a “present interest” in the gifts which can mean that they can withdraw and spend funds as they wish, and the Crummey Trust negates this. This is done by giving the child 30 days in which to withdraw the money and use it (in order to maintain the “present interest” of the child), but once this time period lapses, the money can only be withdrawn when the child reaches the designated age. In addition, if the child does decide to withdraw the funds, they can only access the most recent amount deposited within that time period, not the full amount of the trust.

Find the trust that’s the right fit for your needs – Speak to your 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 Crummey Trust for your child, 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/


Does your trust have any of these problems? Speak to your NJ estate planning attorney

A trust is a very useful and practical part of an estate plan that can bring considerable benefits to you and your loved ones, including tax reductions – but only if it is created and managed properly. Here are some of the most common issues with trusts to look out for, from a leading estate planning attorney in New Jersey.

  • Missing personal details: In order to be administered effectively, your trust must be able to clearly identify beneficiaries, administrators and other important individuals. Incomplete or misspelled names and addresses can lead to confusion and misidentification of beneficiaries.
  • Forgetting to include your retirement plan: For many families, their retirement plan is often their biggest asset after their property, and yet it is often forgotten when drawing up a trust or estate plan. Such a significant asset should be prioritized within your estate planning to avoid increasing taxation.
  • Inadequate planning for your incapacity: Your trust should include clear instructions on who should control it if you become incapacitated, as well as a clear set of parameters to define what would qualify you as incapacitated. This will also have to include instructions they need to follow regarding gifting, investments and more.
  • Limiting powers of trustees: While limiting the powers of trustees seems sensible, it is important that the powers given to them are broad enough to ensure that they can properly manage your trust. Otherwise, they will have to keep returning to court in order to get legal permission to do their jobs.
  • Not updating your estate plan: Your trust and estate plan should be updated on a fairly regular basis, especially if you have added to your family with a new child or grandchild, gotten divorced or remarried, etc. This will ensure that your intentions to provide for your loved ones is in line with the trust, rather than excluding a potential beneficiary that you would have wanted to include.
  • Forgetting other estate planning documents: A trust is an important and useful estate planning tool, but it should be supplemented by other supporting documents. These can include a Last Will and Testament, medical directive, Financial Power of Attorney and other legal documents that help to protect your assets and wellbeing.

Speak to a NJ estate planning attorney today for comprehensive services 

If you would like further guidance on creating or updating your trust or creating other estate planning documents including a Last Will and Testament, Frank R. Campisano can provide you with the necessary expert legal advice and professional insight.

In addition, he can also assist you with all other aspects of your estate plan, from drawing up medical directives and Power of Attorney documents to Medicaid planning. For more information on setting up or changing an estate plan, please contact Frank at the law firm of Sedita, Campisano & Campisano, LLC in New Jersey or visit our website at http://www.scclegal.com/

Estate planning in NJ: The right way to include your home in a living trust

Estate law is fairly complex and people can quickly run into significant issues when their assets aren’t correctly included in their estate plan. Here are some tips from a leading New Jersey estate planning attorney.

If your home is incorrectly included in a living trust, then you and your beneficiaries may run into problems that include:

  • Your home going through probate because the trust fails to correctly identify the property.
  • Your wishes may not be clear, allowing the State to distribute your home according to State law rather than the rules of the trust. This can happen when your home is not listed as a trust asset even if your Last Will and Testament declares that everything should go to a certain beneficiary.

This can lead to delays on your estate as well as increased legal fees as your family and loved ones have to approach the courts to legally correct this error.

If you want to include your home in your living trust, always check: 

  • That you have signed and notarized a new deed when you create your trust.
  • That your home is listed with its full address in your trust in the schedule of assets.
  • That the name of your trust on the new deed matches the name of your trust exactly.
  • That your trust is listed as the insured on your home’s insurance policy.

Have your living trust set up by an experienced NJ estate planning attorney 

If you would like further guidance on creating a revocable living trust or a Last Will and Testament, Frank R. Campisano can provide you with the necessary expert legal advice and professional insight.

In addition, he can also assist you with all other aspects of your estate plan, from drawing up medical directives and Power of Attorney documents to Medicaid planning. For more information on setting up or changing an estate plan, please contact Frank at the law firm of Sedita, Campisano & Campisano, LLC in New Jersey or visit our website at https://www.scclegal.com/


5 benefits of an irrevocable trust

When forming a trust, you’ll start with something known as an intervivos trust. You will then get presented with two options, either to create a revocable or irrevocable trust. The main difference between these two types of trust is the ability to make changes to the trust once it is in place – a revocable trust can be altered while an irrevocable trust cannot be changed. So why would anyone choose an irrevocable trust? Here are the benefits from New Jersey estate planning attorneys:

  1. Estate tax benefits: The assets in an irrevocable trust are not subject to estate taxes, so placing assets into this trust can protect them during the probate process. Additionally, the IRS only taxes estates that are above a certain value, so you can use the trust to reduce the value of your estate. By placing assets into the trust and naming your heirs as beneficiaries, you can try to reduce your estate to an amount below the tax exemption amount. Keep in mind that this amount fluctuates each year.
  2. Life insurance benefits: Another role this trust can play in your estate planning is as the beneficiary of your life insurance. This will ensure that your life insurance payout is included in the value of your trust rather than your estate, which may otherwise put you above the tax exemption amount.
  3. Income tax benefits: Unlike a revocable trust, these trusts are viewed by the IRS in a similar way to an individual taxpayer. This means that the trust income is regarded as separate to your income, which can put you in a lower tax bracket.
  4. Medicare planning and qualification: These trusts can be a useful tool for Medicare planning. Rather than having to reduce your assets in order to qualify for Medicare, you can place assets into the trust. This way, they won’t be included in your personal assets when you are trying to qualify.
  5. Access to cash flow: An irrevocable trust doesn’t mean that your assets stop earning income or that you lose access to this income. A carefully crafted trust will ensure that your investments are kept in the ownership of the trust but that the trust is able to make payments to you on any income they generate.

Speak to an experienced estate planning attorney for advice on trust creation 

At Sedita, Campisano & Campisano, LLC, experienced estate planning attorneys can assist you with creating the trust of your choice, or drawing up other legal documents including Power of Attorney, medical directives and your Last Will and Testament. For more information or to speak to an attorney, please contact us today.

Everything you need to know about estate administration

Estate administration covers the range of legal obligations and responsibilities that are part of the role of executor. In this blog, New Jersey estate planning attorneys take you through this role to demonstrate exactly what administering an estate is all about.

In order to do this, it’s important that the probate process is also understood. Probate is a legal process that certifies the validity of the deceased’s Last Will and Testament and appoints an executor to oversee the administration of the estate. Once this is done, the executor has to ensure that the required steps are taken in compliance with New Jersey state laws regarding creditors, taxation and the distribution of assets.

Administering estate taxes 

In New Jersey, there are three different types of tax that can be levied on an estate: Federal estate tax, New Jersey Inheritance Tax, and Federal/State income taxes. A federal estate tax will only be levied if the estate is very large – for this year, 2016, the estate has to exceed $5.45 million. The NJ state tax, however, affects estates worth in excess of $675,000. The state’s inheritance tax functions on a sliding scale based on who inherits – the closer someone is to the deceased (for example, a spouse or child), the less tax is owed.

Managing the estate’s assets 

The most common method of doing this is to first open a bank account for the estate and deposit any existing cash accounts and any cash owed to the estate into that account. This account will also be used to pay any debts owed by the estate, for example, outstanding taxes, and to pay any of the estate’s expenses. The administrator will also be in charge of:

  • Collecting the deceased’s assets, recording their details and storing them safely.
  • Having any assets appraised if necessary (for example, a property that needs to be sold)
  • Distributing assets as stipulated by the Last Will and Testament

Estate administration when there is no Last Will and Testament 

If the deceased dies intestate, the distribution of their assets is taken over by the State of New Jersey – even if the deceased had different wishes. This is why estate planning is so important.

The probate court will appoint an administrator of their own choosing, often the surviving spouse or child of the deceased, who will carry out the same duties and obligations that the executor of a Will would be responsible. The real difference occurs in the distribution of the deceased’s assets. These will be distributed according to the state’s system that places the surviving spouse, civil union partner or domestic partner with the highest priority, along with the children of the deceased. The next priority goes to grandchildren of the deceased if their parent’s are deceased, each receiving an equal share.

If there is no surviving spouse, civil union partner or domestic partner, then the surviving parents inherit, and if there are no surviving parents then siblings of the deceased will inherit an equal share.

The estate is considered to be escheat if there are no immediate surviving family members  (from grandparents and aunts and uncles to parents, siblings, children and grandchildren) and the assets of the deceased are then taken by the State of New Jersey.

Speak to an estate planning attorney today and finalize your essential documents 

Legal guidance can be of great assistance when you are administering an estate, especially if you have limited knowledge of this complex legal process. At Sedita, Campisano & Campisano, we can provide you with expert legal advice and personal guidance during this process. Not only can we assist you with speeding up this lengthy process, but also in saving you the maximum amount of costs possible.

Our attorneys can also assist you with all aspects of your estate plan, from drawing up your Last Will and Testament to Living Trusts, medical directives and Power of Attorney documents. For more information on setting up or changing an estate plan, please contact us at the law firm of Sedita, Campisano & Campisano, LLC in New Jersey today.



How estate planning can ensure that your pets are cared for

For most pet owners, the wellbeing and happiness of their animals is a priority – but how can you ensure that they are cared for in the event of your passing or incapacity? This is a serious concern for many clients and, fortunately, there is a solution, say New Jersey estate planning attorneys.

What is an animal care trust? 

Similar to a trust that you’d set up to provide for your family, an animal or pet trust is designed to do the same for your beloved animals. Since 2002, U.S. laws have been modified to include ways in which people can leave money in their estate to care for their animals. One of the primary reasons for these changes is due to the increasing amount of animals landing in shelters after their owners have passed away. This is a sad and unnecessary occurrence when owners had the means and wish to keep on caring for them.

Unlike a Last Will and Testament that has to go through probate (so the money won’t be available for a fair amount of time), trusts allow your appointed trustee (or trustees) to start providing for your pet immediately.

The main benefit of the trust, however, is that it is legally enforceable – unlike a Will. At any point during your pet’s lifetime, the courts will be able to set in and enforce your stipulations if the trustee is not living up to their obligations. This prevents people who inherit a pet through a Will from simply handing it in to a shelter after the probate process is complete. If you don’t have a trustee who is able to take your pet, you can also use the trust to ensure that it is provided for in a retirement home for pets – an increasingly popular option.

Pet trusts aren’t just for the wealthy 

While pet trusts do carry a cost, especially if you want your attorney or professional representative to administer the trust, they are generally within the budget of regular pet owners. Typically, animal trust clients are older and don’t necessarily have someone to take care of their animal in the event that they are no longer able. Other clients include people with multiple pets who incur considerable costs to care for – for example, horse owners.

Speak to an estate planning attorney about creating an animal trust today 

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 Last Will and Testament, Power of Attorney, a Living trust or a pet trust, or to update your current documents.

Contact us today and let us deliver expert estate planning advice to take care of all your wishes – whether your estate is big or small.


Your guide to a Special Needs Trust

For families of people with special needs or disabilities, the need to ensure they will be supported and provided for through their whole lives is an especially important factor in their financial planning. One of the most effective ways to achieve this is through a Special Needs Trust which can be created by your estate planning attorney.

Why set up a Special Needs Trust? 

One of the primary challenges that special needs and disabled persons face when it comes to financial support is becoming eligible – and maintaining eligibility for – needs-based government benefits, including Supplemental Security Income and Medicaid. Without proper estate planning, this eligibility can be compromised. For example, leaving your home or personal effects to your loved one will not compromise their benefits, but leaving a large sum of cash will.

How does a Special Needs Trust help? 

This allows you to leave your property and other assets to the trust, rather than directly to your loved one – leaving their eligibility for benefits unaffected. You will be directed to name a trustee who will have complete discretion over the assets in the trust and will spend the money on your loved one’s behalf, ensuring the trust is ignored by SSI and Medicaid administrators. In this way, your assets can be used to purchase care services, food, medical expenses, therapy services and much more for your loved one.

In addition, trusts are kept fully accessible to trustees and are not subject to probate, ensuring your loved one’s needs can be met immediately, without having to wait out the probate process.

How do I choose a trustee? 

The trustee you select will have full access to your assets, so it’s important you choose someone who is honest, trustworthy, financially knowledgeable and has your loved one’s best interests at heart. Be sure to take into account their health and age and name successor trustees to ensure that the trust will be managed throughout your loved one’s lifetime.

You can also choose a corporate trustee who is experienced in acting in this role or appoint your attorney as co-trustee. Your attorney will draft the documents as part of your estate plan, monitor requests, prepare distributions of money or assets and invest the assets.

Speak to estate planning attorneys in New Jersey today 

At Sedita, Campisano & Campisano, LLC, experienced estate planning attorneys can assist you with creating a Special Needs Trust or drawing up other legal documents including Power of Attorney, medical directives and Wills. For more information or to speak to an attorney, please contact us today.

Is a Living Trust only for the wealthy? Estate planning specialists in New Jersey answer

If you’ve been thinking about creating a Last Will and Testament and investing in estate planning then you’ve probably come across a lot of information on Living Trusts. Despite their association with the rich and elite, Living Trusts are not just for the wealthy according to experienced estate planning attorneys in New Jersey.

What is a Living Trust?

There are many different types of Living Trusts, each suited to different needs. Essentially, it is a legal document that dictates how your assets are to be divided up in the event of your passing. It is active as soon as it is created and only becomes effective after you pass away and your Last Will and Testament enters probate.

What are the benefits of a Living Trust?

The biggest difference between a Living Trust and your Will is that the first option bypasses the often costly, tax-heavy and time-consuming probate process which often lasts longer than nine months, allowing your beneficiaries to access their inheritance, funds and assets immediately.

It is also a very comprehensive document, allowing you to be as specific about the distribution of your assets as you want, as well as choosing legal guardians for your children. Other benefits include:

  • Privacy – Unlike a Will, the contents of a Living Trust are not made public.
  • It can include Durable Power of Attorney – Allowing your named trustee to immediately make financial and medical decisions for you if required.
  • Delay distribution of assets – If you prefer, you can ensure that certain assets are held back from distribution to beneficiaries until a particular time, for example, keeping aside money for your child’s college fund or until he/she reaches a certain age.
  • Keeps your business running – If your business is included in your Living Trust, then its income will stay accessible. If it is in a Will, then income will be inaccessible until the probate process is concluded.
  • It is legal in any state and requires no modification if you move between states (although you may need to modify it in terms of updating assets), which Wills often require.

At Sedita, Campisano & Campisano, LLC, experienced estate planning attorneys can assist you with creating a Living Trust or drawing up other legal documents including Power of Attorney, medical directives and Wills. For more information or to speak to an attorney, please contact us today.

How to avoid paying too much inheritance tax

Inheritance tax is something people rarely think about until they are beneficiaries of part of a Will or trust. The government can take a large portion (up to 45%) of a deceased person’s estate. There are, however, ways to avoid paying too much inheritance tax. Estate planning attorneys in New Jersey, SCC Legal, lists a few options:

Second-to-die life insurance

When combined with an irrevocable life insurance trust, second-to-die life insurance ensures your wealth and assets are passed on to your spouse or children without the beneficiaries having to pay inheritance tax. The costs associated with this option include attorney fees (who will set up the trust) as well as insurance premiums (which will vary depending on the health and age of the owner).

Grantor retained annuity trust

The donor of a granted retained annuity trust will need to pay annual payments for this trust. After the term of this trust ends, the money remaining will be allocated to the beneficiary as a tax-free gift.


You can avoid paying inheritance tax by giving away part of your wealth during your lifetime. Gifts that are known as ‘potentially exempt transfers’ are generally made to people (not companies or trusts), charities, educational institutions and so forth.

Get affordable, current advice from a leading elder law attorney in New Jersey

If you have worked your entire life and have built up wealth and assets, it’s your duty to make sure this wealth gets passed on to the next generation without them being crushed by inheritance taxes.

Frank R. Campisano is an elder law attorney in New Jersey that specializes in all aspects relating to estate planning and inheritance tax. When you book a consultation with Frank, you will get up-to-date, affordable and uncomplicated advice. Be proactive about your estate planning in order to avoid paying too much inheritance tax. Contact us for more information today.

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