Author: rmorris

Your child’s transition to adulthood is an important time in life. If your child has reached age 18, particularly an adult child traveling to attend school or work, critical legal changes have occurred. At age 18, your child is an adult under New Jersey law, even if they are still living at home. Your adult child now controls their own medical and financial decisions, and a parent’s access to information is restricted. Several documents are available to address these changes and appoint agents to assist your child during this stage of life.

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This year has brought several interesting changes and important proposals that can affect many estate plans. We have held seminars covering two major issues:

1. the IRS Proposed Regulations affecting qualified retirement plans and IRAs; and
2. the Administration’s proposed changes to the Federal Estate and Gift Taxes.

Read More about Important Estate Related Proposals and Changes for 2022

The Internal Revenue Service (IRS) recently issued much anticipated proposed regulations that clarify and revise some of the required minimum distribution (RMD) rules for qualified plans (i.e. 401ks, 403bs, etc.) and individual retirement accounts (IRAs). While the proposed regulations are subject to further action in the late Spring of 2022, they contain a few important potential changes for both spouse and non-spouse beneficiaries.

Read More about The Internal Revenue Service (IRS) Issues Proposed Minimum Distribution Rules

In 2022, the annual exclusion for Federal Gift Taxes increased to $16,000 per person per year. Although there is near-universal acceptance of the importance of gifting, there are several issues you should consider before making any gifts. The manner in which gifts are made can have a major impact on your beneficiaries. This is particularly true if the recipient is under 21 years of age, and it can be an acute issue if the recipient is a minor under the age of 18. Outright gifts to children and grandchildren have their own drawbacks, including limited control over the gifts made, exposure to creditors, divorce, and other issues involving the beneficiary. For these reasons, trust options should be considered to afford greater protection and structure for your intended beneficiaries.

Read More about The Annual Exclusion for Gift Taxes has Increased to $16,000 – What Issues Should I Consider?

Throughout 2021, Congress and the Executive Branch proposed tax code changes that – had they ultimately passed – would have significantly changed various estate planning techniques. Some proposals would have sidelined a number of established estate planning strategies while other proposals could have increased the frequency of use and usefulness of others.

Some proposals would have reduced the estate and gift tax exemption amount from its current level of $12.06 million per taxpayer to $3.5 – $6.85 million per taxpayer, depending on the source. Although there is certainly no guarantee that such a proposal will not be made in the future, we can nevertheless focus for now on what we do know about the law as written today and what steps we can take to address the coming changes.

Read More about Gift and Estate Tax Changes

Gift provisions in a power of attorney can limit both agents and guardians, and restrict their ability to make gifts if a need arises. For this reason, powers of attorney should be carefully drafted to include appropriate gifting authority. A recent New Jersey Appellate Division case underscores the importance of including gift authority in a power of attorney and the impact any restrictions can have on gift planning.

Read More about Do Not Forget the Importance of Gift Provisions in a Power of Attorney

Living in the time of COVID-19 has heightened everyone’s anxiety. With all of the uncertainties in life, implementing estate planning documents that provide for you and your family can afford some level of relief. Estate planning documents allow you to designate agents to assist with your affairs, while providing structure to assist loved ones as they navigate through turbulent situations. Working with an attorney can help to address questions you will have about your estate plan and will offer personal guidance through this process.

Read More about Now is a Good Time to Make Your Estate Plan

The federal tax treatment of IRAs, ROTH IRAs, 401(k)s, and 403(b)s has been the subject of countless books, articles, seminars, and commentary. But, there is precious little regarding the New Jersey state income taxation of these accounts, which is often vastly different. Understanding New Jersey taxation rules is important, not only for distributions made to the account owner during lifetime, but also as part of the owner’s overall estate plan.

Read More about Don’t Forget New Jersey Taxation of IRAs, 401(k)s and 403(b)s

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contains significant changes to the 2020 required minimum distribution rules applicable to IRAs, 401(k)s, 403(b)s, and other similar Qualified Retirement Plans (collectively “QRPs”).

The CARES Act waives required minimum distributions from IRAs and QRPs for calendar year 2020. This change can result in income tax savings for owners of traditional IRAs and QRPs that are affected by this change.

Read More about 2020 Required Minimum Distributions from Retirement Accounts Have Been Waived

A common problem in many estates is the executor’s failure to promptly settle an estate or make distributions to the beneficiaries. Delays in settling an estate can have many causes, including inattention by an executor, failure to take action where required, and mismanagement. In some cases, the delays are a sign of more serious problems, such as self-dealing or an intent to deprive the beneficiaries of their inheritance.

If you are a beneficiary of an estate, you have a right to compel the executor to settle an estate and make distributions to you.

Read More about The Executor Won’t Distribute an Estate – What Can I Do?