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.

Gifting

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.

How to Create a Will When the Kids Don’t Get Along

While the last thing we want to think about is our kids fighting over our assets when we die, the truth is this isn’t an uncommon experience. This is a time of highly charged emotions where infighting can happen over even the smallest matters – never mind who inherits what. Here are some guidelines on how to create a will which will stand up to any challenge:

  1. Get professional help: The legal system is built on laws as well as loopholes and it takes a lot of work and experience to develop a will that is airtight. For a document as important as this one, no amount of DIY will stand up to a considered legal challenge, so if you want your wishes to be heard, make sure you speak to an attorney with considerable estate planning knowledge and an eye for detail. They will ensure your wishes are executed as you have requested and that your will is able to stand up to any challenges.
  2. Stay up-to-date: Your finances and assets will change as your life changes – so don’t let anything slip by the wayside. You don’t have to revise your will every week, but you should certainly do it every three to five years. If your life undergoes a significant change however, from having a new child to winning the lottery, simply book an appointment as soon as you can.
  3. Appoint a strong executor: Your executor will be responsible for dealing with your estate’s paperwork, gathering assets, ensuring debts are paid and distributing the remainder. If there is likely to be any challenges to your will, you want to have an executor who is confident, strong and able to handle this infighting effectively. If you would like them to have additional help, your attorney can draft a third party – for example, a bank trust department – to assist them with administering your will.
  4. Tell your beneficiaries: Unlike in the movies, it’s best not to leave the announcement of who gets what until after your funeral. If you think your children or beneficiaries are going to fight, it’s best to let them know what your wishes are well in advance. This is best done in a calm, unemotional way where you can explain how you got to your decision. If there are certain things very important to family members that you were unaware of, this also gives you a chance to privately consider any changes. 

Find an Estate Planning Attorney You Can Trust

In situations where you need to make difficult decisions about the distribution of your assets and the drafting of an ironclad will, it’s important your attorney is more than a legal representative – they need to be a trusted advisor. Frank Campisano is a dedicated and experienced estate planning specialist, with extensive legal expertise, on hand to assist you. By taking a personal, considered approach to all his clients, Frank is able to deliver the highest quality service while putting clients at ease. For more information on creating and managing your Last Will and Testament, please contact us today.

The Benefits of Setting up a Marital Trust

A Marital Trust, also known as an “A” Trust, is essentially a means to postpone estate taxes in the event of a spouse passing until the other spouse has also passed. This is a very important part of estate planning for married couples, as it ensures – no matter how valuable your assets are – your spouse will not be held liable for any federal estate taxes.

Marital Trust vs. Qualified Terminable Interest Property (QTIP) Trust 

While a Martial Trust is fairly simple and leaves everything to the surviving spouse, usually to dispose of as he or she wishes, a QTIP Trust includes provisions which will dictate where the remaining trust assets go after both spouses have passed. This could be a charity, your children, stepchildren or anyone you prefer rather than the state’s designated beneficiaries.

How Does a Bypass Trust Fit In? 

This is the third trust option utilized by couples and it effectively ensures that, in order to reduce taxation on an estate, the trust goes to a designated individual rather than the surviving spouse. Although the trust doesn’t go to the surviving spouse, they can still benefit from it for their lifetime and, because they are not the owner of the assets, no taxation will be imposed upon their passing.

How Do I Set Up a Marital Trust? 

Although these concepts are fairly simple on the surface, they are in fact highly complex. There are considerable IRS restrictions on these trusts and factors such as the value of your estate, exemption amounts and more, all weigh in on the trust process. For these reasons, it’s advisable that you speak to an experienced estate planning specialist who can navigate these complex legal pathways and develop a sound, comprehensive plan to protect your assets and ensure your loved ones are properly cared for. Frank Campisano is an experienced New Jersey estate planning specialist and trusted advisor who takes a personal role in meeting all of his client’s needs. Contact us today for more information on setting up a marital trust.

New Jersey Inheritance Tax

The confusion and frustration of having to deal with inheritance tax can be quite overwhelming when dealing with the loss of a loved one. Heirs can suffer quite a lengthy process and experience quite a financial loss if you have not properly planned your estate. Many people do not think of the taxes imposed and find out too late, which unfortunately can result in the heirs of the estate suffering.

In New Jersey receiving an inheritance doesn’t come without strings attached. If you take a quick overview of New Jersey inheritance tax you will find that tax is imposed on an estate when it is left to a descendant.

The state of New Jersey has a very low estate tax exemption of around $675,000.00, which would be adequate if only probate assets were considered legally part of a deceased’s estate.  Unfortunately non-probate assets are also included in a deceased’s estate and this is where inheritance tax can catch you out. Of course there are ways in which individuals can legally avoid New Jersey inheritance tax, if they take the time to implement proper measures before it’s too late.

Avoid inheritance tax with a marital trust

If you have been wondering how inheritance tax can be avoided, then marital trusts are the answer and have been for many people over the years, in New Jersey.

The allowances of a marital trust are as follows:

  • The trust makes arrangements for a portion of the deceased’s spouse’s estate to support the surviving spouse.
  • Certain assets are included in the surviving spouse’s estate.
  • The surviving spouse’s estate can avoid extensive tax liability if this trust is carefully constructed and managed.

Do I need a lawyer to assist with avoiding inheritance tax?

If you are unsure of the process and want assistance with understanding how much tax will be attached to your property and other assets then yes, you definitely need the assistance of a lawyer. An experienced lawyer can save your heirs the time and hassle of having to figure out what taxes are involved, or more distressing – losing a large chunk of their inheritance to tax. You can save time, frustration and money if you choose to hire a qualified Elder Law Attorney.

At SCC Legal, Frank Campisano is dedicated to assisting clients with their estate planning needs. He is a compassionate Elder Law attorney and will professionally advise you on the best course of action at all times. He and his team are empathetic to your needs and situation and are trusted legal advisors in the New Jersey area.

At SCC Legal we are confident we can minimize the amount of New Jersey inheritance tax imposed upon an estate by providing a professional estate planning service and drafting a marital trust fund that will protect the deceased’s estate.

Are You a Trust Fund Baby?

Well if you are, I’m jealous!  Being a trust fund baby typically means you will not need to worry about making money of your own during your life. Your wealthy parents may have set up a trust fund of some type for you which was handed over to you when you reached a certain age, or a certain incident occurs (often the death of a parent or family member).

So what does a trust fund of this type consist of? Well, it can be anything from cash and stocks to property and various other financial products. Of course the fund isn’t just paid out to a trust fund baby. In most instances strict terms are attached so that a certain amount is paid out on a monthly or annual basis to the beneficiary to ensure financial security over the long term. Usually general living expenses, education and similar are paid from this fund.

How do trust funds of this type work?

A trust fund baby is very fortunate in that the person setting up the fund has planned and prepared well in advance for their financial security. Generally the fund is set in place and a trustee, who is responsible for managing the trust fund and ensuring it is being conducted according to the terms of the trust and also in the best interests of the beneficiary, is appointed. The trustee is usually a legal entity such as the family lawyer or someone close to the family.

The trustee of the fund has certain responsibilities:

  • Ensuring tax returns are filed.
  • Compiling and presenting financial reports to the grantor.
  • Approving the withdrawal and use of funds by the beneficiary.

As a trust fund baby you will need to be in touch with your grant trustee and the legal or financial entities involved in the management of the fund in order to benefit. You will usually be advised of your fund by the grantor, or you will be informed via someone’s will after the event of their death.

How an Attorney can help you create your own Trust Fund Babies!

If you are a wealthy individual with significant assets to pass on, establishing a trust fund for your dependents is an absolutely essential part of your inheritance and estate planning. And while the common meaning of trust fund babies is sometimes equated with less than complementary characteristics, you can set up your trust fund in an infinite variety of ways so your children don’t become too spoiled.

In all scenarios involving trust fund creation or gaining access to one, hiring a estate planning attorney who is familiar with trusts is essential. For more information on how to start a trust fund or gain access to one, take the time to chat with us at SCC Legal. Your initial consultation is always free.

Back to SCC Legal

What is a Trust?

by Frank Campisano

People are often intimidated by the concept of a “trust” or trust fund because of the common perception that trusts are extremely complicated legal devices.  Although it is often true that certain trusts can indeed be intricately structured to accomplish particular purposes, the fundamental components of a trust are not that difficult to understand.

Uses of a Trust Fund

Trusts in New Jersey are commonly used when it is beneficial and legally necessary for property to be owned and managed by someone other than the Grantor, or original owner of the property.  Effective uses of trusts include estate planning, asset protection, avoidance of probate, avoidance of taxes, and protection of government entitlements such as Social Security and Medicaid.

Trust fund terminology defined

Trust Defined:  A trust is a legal device that is designed to hold legal title to or otherwise own certain property or assets.    A trust is often described as a “box” designed to own, manage and distribute property designated for certain beneficiaries.   Therefore, the essential purpose of a trust is to create an artificial person who legally owns and manages property placed into this box or trust.

The person who creates the trust is known as either the Grantor or the Settlor.  The person who owns, holds, manages and distributes the property in the trust is called the Trustee.  The person who receives the distributions of property or income from trust is called the Beneficiary.  The trustee acts in a fiduciary capacity (i.e. position of trust) to the trust.  The Grantor thus transfers his property to the Trustee who holds the property and distributes it to the Beneficiaries.

How to Create a Trust in NJ

Trusts are created by either a written contract or by a Last Will and Testament.  A written contract to create a trust is usually referred to as a Trust Agreement or Declaration of Trust.  Trusts that take effect during the Grantor’s lifetime are referred to as Intervivos Trusts.

A basic contract for an Intervivos Trust should clearly identify:

(1) the key players of the trust;
(2) the purpose of the trust;
(3) the manner of control over and disposition of the property held in the trust;
(4) the termination of the trust.

Trusts created by a Last Will and Testament are referred to as “Testamentary Trusts”.  They take effect only after the Grantor passes away.

Types of Trusts

There are two main types of trusts: Revocable Trusts and Irrevocable Trusts.  Revocable trusts are those in which the Grantor maintains a significant degree of control over during his lifetime.  The Grantor may freely change or terminate a revocable trust during his lifetime.  Conversely, once an irrevocable trust is created by the Grantor, he generally relinquishes all ownership and control over the assets placed in the irrevocable trust.  In New Jersey, an irrevocable trust may be amended or terminated by the Grantor only in limited instances, and he generally requires the consent of the other key players of the trust, such as the trustee and beneficiaries.  Irrevocable trusts are commonly used in New Jersey for income tax and estate tax avoidance, protection of assets, and for Medicaid asset protection.

Seek Expert Legal Advice when setting up Trusts:

Although the fundamental concepts of a trust can be readily understood by most people, the design, use and implementation of trusts can be extremely complicated and should be left only to skilled and experienced legal practitioners.  Frank Campisano of Sedita, Campisano & Campisano is an experienced elder law and estate attorney who can design and draft the trust that best fits your particular needs for asset protection, estate planning, estate tax avoidance and Medicaid planning.

Please contact Mr. Campisano to set up a free consultation.  

Avoidance of NJ Estate Taxes Through Marital Trusts

by Frank Campisano

New Jersey residents are generally unaware of the potential for the assessment of New Jersey estate taxes on their estates.   Although the current Federal exemption of $5,250,000.00 is more than adequate to shield most estates from Federal estate taxes, New Jersey has a relatively low estate tax exemption of $675,000.00.  At first blush, the New Jersey exemption of $675,000.00 also appears to be an adequate shield for most middle and upper middle income families until one undertakes a close examination of the assets which comprise a decedent’s gross estate.  A common misconception is that only traditional probate assets (e.g., assets passing under a Last Will & Testament) are included in one’s gross estate.  However, non-probate assets passing through beneficiary designations on contractual instruments such as investment accounts, IRAs, and Certificates of Deposits, which are termed “non-probate assets”, are also included in a decedent’s gross estate.  Moreover, all insurance proceeds or death benefits passing under life insurance policies owned by the decedent are also includable in the decedent’s gross estate even though they too pass through beneficiary designations rather than by a Will.

Although estate assets are also shielded by an unlimited spousal exemption, far too few people in New Jersey consider the impact of New Jersey estate taxes when both spouses ultimately die and leave their combined estates to the couple’s children.  For example, if the husband dies his estate will pass to the wife tax free under the marital exemption.  When the wife ultimately dies, however, her estate which is comprised of both her and her husband’s assets will then pass to the couple’s children.  If the combined estates of both spouses exceed $675,000.00, New Jersey will assess an estate tax on transfers to the couple’s heirs.   The failure to consider the tax consequences on the “second spouse to die”, coupled with the misconception regarding the inclusion of non-probate assets in the gross estate often lead to the payment of estate taxes which could have been avoided through effective estate planning.

A fundamental technique utilized by estate planning professionals to limit both Federal and New Jersey estate taxes involves the use of marital trusts.  A marital trust allows a portion of a spouse’s estate to support the surviving spouse, but exclude certain assets from being included in the surviving spouse’s estate.   A carefully crafted and funded marital trust will thus save the surviving spouse’s estate from significant estate tax liability

At Sedita, Campisano & Campisano, we provide effective estate planning to suit your family’s needs.  We are experienced in drafting and funding marital trusts which can minimize the amount of Federal and New Jersey estate tax liability.  We will review your financial situation and carefully formulate an estate plan that best suits your particular needs.

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