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Posts Tagged ‘Estate Planning’

This is just a quick note to clarify something that many of my first time clients fail to understand.  The Federal Gift Tax Exemption is $14,000 as of 2016.  This means that you can give to as many individuals as you like $14,000 without having to file a Federal Gift Tax Return.  If, however, you gift more than $14,000 to anyone this year, then you are required to file a Federal Gift Tax Return also known as a Form 709.  That return allows the IRS to keep track of those taxable gifts.  Those gifts then offset your Federal Estate Tax exemption.  So, for example, in 2016 you have a $5,450,000 Estate Tax Exemption.  If you gave $14,001 to someone – then you are required to file a Gift Tax return which will in turn reduce your $5,450,000 Estate Tax return to $5,449,999.  If you gave $5,464,000 ($5,450,000 plus 14,000) then you will have Zero (0) Estate tax exemption left, so when you die anything you leave to someone other than a spouse or charity will be taxed.  Now, this is a simplified explanation of how the gift tax and estate tax exemptions work together.

Please remember one thing however, just because you are allowed to make a $14,000 annual gift for gift tax purposes does not mean that this gift is exempt from Medicaid look-back rules.  Gift Tax/Estate Tax rules are distinct and separate from Medicaid Rules.

If you have any gift tax, estate tax or elder law matters, please do not hesitate to call us.  Remember though, reading this blog does not create an attorney client relationship and does not constitute legal advice for you to rely upon.  If you want us to become your attorney, you must sign an engagement letter.

 

The New Jersey probate code has two statutes that govern the admission of a Will for an alien.  First, the distinction must be made whether they are a non-resident alien or a resident alien.  N.J.S.A. 3B:3-24 governs situations where the decedent is a resident alien, which N.J.S.A. 3B:3-26 governs where the decedent was a non-resident alien. 

Why would you want to admit a Will to probate in New Jersey for a foreign person?  Well, often times foreigners have real property in New Jersey or a bank/brokerage account here.  In order for the Executor to marshall the assets of the decedent, they must access them and in order to access them they must have authority to do so.  By having the Will admitted to probate in New Jersey, the Executor/trix of the Estate will be able to accomplish this task.

We recently helped a client whose mother was a resident alien and whose Last Will and Testament was probated in a foreign country.  In order to get the Last Will and Testament admitted to probate in New Jersey, we had to file an Order to Show Cause to admit the Will.  In deciding in our favor, the Court relied on   In re De Buck’s Estate, 24 Backes, 80, 4 A.2d 309 , N.J. Err. & App. 1939, the Court addressed a similar situation wherein the original Will was alleged to be unavailable by the proponent of the Will.  The Court found in that case that the circumstances surrounding the inability to produce the Will were suspicious.  The Court found it was not credible that the original will could not be produced in light of the fact that the decedent owned no real property in France.   The Court was of the opinion that a Will would be admitted to probate in France (as it would in New Jersey) if there were real property located there.   The court stated, however, that had proper proof been provided, the court would have admitted a duly authenticated photostatic copy if that had been the case.  It was really interesting that we had to go all the way back to 1939 to find a case on point.  The Court also relied on N.J.S.A. 3B:3-24.  If you ever have a case like this, our firm would be more than happy to help out.

Reading this post does not constitute nor create an attorney client relationship nor does it constitute legal advice.  If you would like to hire our firm, please contact our office and we will arrange a consultation.

My Dad used to like to say that he was going to spend his last dollar on the last day of his life.  It was a fairly ambitious goal that reflected his desire to get the most out of life and enjoy the fruits of his lifetime of labor.  Alas, it wasn’t to be.  He died of an aneurism before he was even able to fully retire.  That was the bad news. The good news was that he left my Mom in very good financial shape, so she doesn’t have to worry about money (although she still does).

Working hard, saving smart and good estate planning helped my Dad to at least partially reach his goal of security in his later years, even if it was only for his wife.  Not unlike Warren Buffet, my father wanted his children to make their own way, earn their own financial security and not rely on some largesse that may or may not come from Daddy.  Hand in hand with that view was the money he earned belonged to him.  He earned it.  He sacrificed to save it, so why should the government take ANY of it?  The government didn’t earn it, he did.

All of this brings me to the point of this post.  An article in Saturday’s Wall Street Journal highlighted the importance as well as the changing nature of estate planning.  The central message of the article is that not only is estate planning crucial to avoiding estate taxes upon your death, but managing your income tax obligations while you are still alive is crucial for preserving your wealth and should be a part of every comprehensive estate plan.  Anyone with a television or an internet connection can tell you that who should be taxed and how much is a hot political topic and the trend is heading higher on both counts.  While higher taxes and newer ways for the government to put its hand into your pocket are the bad news, the good news is that there are a number of tools and strategies that you can employ to structure your financial security and legacy as you see fit.

Each individual and family is different and each requires an attorney who will listen to their wishes, and develop a customized plan that’s right for them.  At Tiboni and Tiboni, we’ll take the time to get to know you, understand your wishes and work with you to create the right plan for you.  IT’S YOUR MONEY!!  YOU worked hard, sacrificed and saved to get where you are financially.  YOU should decide where your hard-earned money goes when your time is up, not some Uncle Sam that lives in Washington, or some other creepy uncle in Trenton or Albany just waiting to get their hands on your cash.

My Dad ran out of time to see the fulfillment of his plan, but he had a plan and that plan is providing for my Mom to this day.  She will never have to worry about financial security.  Give us a call and let us help you to make your plan today!

In 1964 Bob Dylan sang “The times, they are a changin’”.  Those words ring as true today as they did back then.  This past week, the Internal Revenue Service (IRS) and the United States Department of Treasury released a joint ruling that stated:

Same sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.

Whether you currently live in a state that recognizes same-sex marriage, or one that does not makes no difference, the federal government of the United States of America will recognize your marriage for all tax purposes.

So what does that mean?  It means that all legally married same-sex couples will have clear and unambiguous tax filing guidance across the country.  So, if any same-sex married couple wants to move to another state, any state, their status for filing federal taxes won’t change.  It also provides access to all the benefits, protections and responsibilities available under federal tax law.  This policy change by the IRS and Treasury Department also means that when legally married same-sex couples file their taxes, every category that allows a distinction for being married, including; personal and dependency deductions, contributing to an IRA or other qualified plan, the earned income credit, child tax credit, employee benefits and standard deductions, the same-sex married couple can file either married, filing jointly or married, filing separately.

There’s even more good news: the IRS has a three-year “look-back” policy, so as a same-sex couple that has been legally married for any of that time, you are entitled to file amended returns for each year that qualifies.   There is no obligation to file amended returns but it may be well worth it, if it puts more money back in your pocket!

One thing to keep in mind, though, is that this ruling DOES NOT apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state laws.  Only couples legally married in one of the 50 states, the District of Columbia, any U.S. territory or a foreign country can benefit from this new rule.

This latest ruling comes on the heels of an announcement by the Department of Defense (DOD) extending benefits to same-sex spouses and civilian employees.  There is rapid change happening in how the federal government is viewing same-sex marriages and it doesn’t look as if it is going to stop here.  Important decisions await in Social Security, Medicare, Medicaid and a host of other regulatory areas that factor in one’s marital status.

The challenge will be for married same-sex couples to navigate all of these changes in the law to maximize the benefit to them and take full advantage as they manage their estate planning to ensure that their families are taken care of and their wishes are carried out.

At Tiboni & Tiboni, we can help you understand the changes, explain how they affect you and your family and help you create an estate plan that maximizes these new benefits.  The times they are a-changin’, with more changes to come.  Every family is unique. Let us assist you, in these exciting times, in crafting a custom estate plan that addresses your family’s specific needs.

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Win Win is based on the story by Tom McCarthy and Joe Tiboni. When a disheartened attorney moonlighting as a high school wrestling coach stumbles across a star athlete, things seem to be looking up. That is, until the boy's mother shows up fresh from rehab and flat broke, threatening to derail everything. Cast: Paul Giamatti, Amy Ryan, Bobby Cannavale, Jeffrey Tambor.
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