Tag Archives: Estate Planning

Trustees of Special Needs Trusts: What You Need to Know When Selecting Your Trustees!

Aug 12,2015

Do you have a special needs individual in your immediate or extended family? If so, consider setting up a third party Supplemental Needs Trust for the benefit of this individual so that any money coming to him or her can be deposited into this trust. The trust money can then supplement government benefits without jeopardizing or impacting the same.  Important as they are, special needs trusts are also complicated to administer and it is extremely important that the Trustee or Trustees you have appointed have the following characteristics[1]:

  1. They are willing to commit to the long term
  2. They have a special sensitivity to the beneficiary-individual’s disabilities
  3. They are actively involved in monitoring the individual’s services being received
  4. They have the ability to be an advocate for medical and financial entitlements
  5. They have the ability to be a prudent investor and distributor of trust funds

Having one or more of the above traits can be invaluable for those serving as Trustees even if they are not professional or corporate trustees.

And finally, on a related note, make sure you establish these trusts as soon as possible especially before the individual turns 65 as his or her planning options for receipt of monies in his or her name become extremely limited after turning age 65.  Give us a call if you would like to set up a special needs trust for one or more of your family members.

[1] Excerpt summarized from Representing the Elderly Client by Thomas D Begley, Jr. and Joanne Herina Jeffries.


General Durable Power of Attorney: What Is It And Why Should You Have One?

Aug 10,2015

A general durable power of attorney is a legal document authorizing someone (called your Agent or Attorney-in-Fact) to manage your financial affairs on your behalf. This individual can perform any actions that you could do for yourself, such as signing checks, buying or selling real estate, depositing or withdrawing funds, even run a business! The bonus of a properly drafted general durable power of attorney as opposed to a regular power of attorney is that the authorization to act continues even upon incapacity. That way, the person to whom you have granted power of attorney can maintain your financial activity (among other important matters that need to be taken care of expediently) until you are well enough to do so for yourself again. With a general durable power of attorney, all of this is possible without any involvement from the court.

Without this important document, you run the risk of facing far more difficulties than you would otherwise. If there is no general durable power of attorney and you become incompetent or incapacitated, no one will have the authority to act on your behalf. In such cases, your loved ones will have to petition the court for the establishment of a guardianship. Guardianships are not only expensive, but are time consuming and can cause a strain on your family. Furthermore, if there are assets in your estate, a guardian will be required to post a bond in order to protect himself or herself from liability. Guardians must also present an accounting every year with the court to show how and where the assets were used. But the process does not necessarily stop there. Once you have a guardian appointed to act in your stead, the guardian may need to apply for court relief again if he or she thinks that you might need to engage in Medicaid planning to plan for you’re the payment of long term care.

Additionally, in New Jersey, after a guardian is appointed, he or she becomes your fiduciary, and must comply with the Prudent Investor Rule when it comes to investing your assets. Compliance with the Prudent Investor Rule requires the guardian to show proof of the following:

(1)diversification of assets; (2) avoidance of unnecessary costs; (3) duty of impartiality to various beneficiaries; (4) delegation, where necessary; and (5) preservation of assets.

All of the above difficulties, however, can be avoided if a General Durable Power of Attorney has been established in advance, before you become incompetent. This will avoid the long, drawn out court process and provide your loved ones with a simpler, more cost-effective way of managing your assets.

Is a Roth IRA the “Cadillac” of Assets to Leave for Heirs?

Jan 15,2015

If you’re looking down the road to retirement, you may be wondering which of your accounts you should tap into first, and which you should leave possibly set aside to pass on to beneficiaries. Those individuals with traditional retirement accounts, brokerage accounts, Roth IRAs, and a 401k may feel overwhelmed by the options, but it all depends on your estate planning goals.



For the most part, Roth IRAs seem to be good accounts to leave behind for others. Since the distributions can be taken out tax-free and can be stretched over the course of a lifetime, the majority of the original investment can continue growing tax free during that same period. Since the federal estate tax exemption for a married couple is more than $10 million, Roth IRAs may be more likely to be free of estate taxes and income taxes. For that reason, it could be worth your time to convert other traditional retirement accounts into a Roth for the ultimate benefit or heirs.

Doing so, however, requires understanding that you’re probably going to have to leave that money alone for at least ten years, so don’t make a decision without careful consideration of your own cash flow situation. If you convert and begin taking income out, the potential growth for that IRA is halted. To learn more about estate planning strategies that leave a legacy behind for family, call us at 732-521-9455.

Auld Lang Syne: Talk Estate Planning This New Year

Jan 07,2015

While it is not the first item on everyone’s resolution list, the New Year is a great time to discuss your estate plan with your family. As a recent article explains, the benefits of having the estate planning discussion far outweigh the problems that may otherwise arise out of the desire to avoid a sometimes awkward or difficult conversation.feat5

First, discussing estate planning provides your family with a sense of empowerment because it allows your family members to take control of your family’s collective future. Without this element of control, many aspects of your estate plan are inevitably left to chance.

Additionally, through discussing estate planning, you can pass on your family values. For example, discussing charitable giving is a great way to talk about the causes you are passionate about. Additionally, you can discuss the stories behind sentimental objects and why you are distributing them as you have selected.

Finally, discussing your estate plan with your family helps to prepare the family, should you become incapacitated. Your family will be better able to carry out your wishes and tend to your affairs if they know what your plan for incapacity is and how you would like them to implement it.