Tag: estate plan

Minimizing Elder Financial Abuse

On By Jane Fearn-Zimmer, Esq.In Elder LawLeave a comment

Sad senior woman after quarrel

It seems like every month, there is a news broadcast of a new form of elder financial abuse.  Statistically, it is very prevalent, especially among individuals with dementia who are residing alone in the community.

Unfortunately, elder financial abuse comes in many forms. One version is where a trusted advisor, family member or caregiver with whom the senior has a relationship takes the senior to an attorney to execute a new Last Will and Testament, changing the existing estate plan in favor of the trusted individual.  These are difficult cases to enforce because by the time the fraud is discovered the victim is deceased.

Another variety of elder financial fraud is tech support fraud, where there is a pop up on the senior’s computer screen that routes the victim to a bogus website to input information. Someone calls the senior and asks the person to send in money for software that doesn’t exist. The perpetrator remotes into the computer and tells the senior to log into the bank account. Then the perpetrator minimizes the window and withdraws funds without permission from the senior’s account. Some con artists may pose as representatives of well-known industry giants such as Microsoft and Google.

There are romance scams where someone pretends to be in a relationship and convinces the senior to send money. There are lottery scams and prize scams where a senior is asked to pay money to get the winnings.  But the majority of elder financial abuse the SEC sees is theft.  These cases are hard to put together due to the challenges of gathering the evidence.

In many cases, the victims may not even realize they have been victimized, or they may have had a long term relationship with their trusted advisor or family member and just convincing the senior to speak with an investigator or another attorney is problematic.  It may be easier for seniors to talk about financial abuse by emphasizing that this also happens to younger people and to focus on protecting yourself. Reassure them that their fear of compromising their appearance of competency and independence if they complain will likely not materialize.  Do not hesitate to report the incidents to the authorities. This is an area of enforcement which the Securities Exchange Commission and other federal agencies are currently focusing on and there are a lot of resources at both the state and local levels.

Questions? Let Jane know.

Jane Fearn-Zimmer is an Elder and Disability Law, Taxation, and Trusts and Estates attorney. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Choupette’s Legacy – Why Estate Planning Matters

On By Jane Fearn-Zimmer, Esq.In Estate PlanningLeave a comment

Choupette royalIt is speculated that Choupette Lagerfeld, the pampered Parisian pet of the iconic late German fashion designer, Karl Lagerfeld, may have a stake in Lagerfeld’s vast fortune.

Choupette Lagerfeld moves in the circles of the rich and famous. Ironically, her most universal legacy could be to demonstrate why estate planning matters for everyone, wealthy or not.

Choupette’s situation makes clear that a clever estate plan can transform the impossible into the possible.  With an estate plan opting into German law (which, on information and belief, may allow the use of pet trusts), even a cat living in France (the law of which apparently prohibits an animal from inheriting) can become an heir.

If Karl Lagerfeld died without any estate plan, and if Choupette had not already amassed a fortune of her own through social media and advertising, she could descend rapidly into a downward spiral from riches to rags by taking nothing from her master’s estate.

An estate plan enables anyone with property (whether a fortune or a modest estate), to literally reach back from the grave, provide for loved ones (including pets) and retain some residual control over those left behind.

An estate plan can protect an unmarried, unrelated cohabitant by allowing her to remain in your home after your death, with any inheritance tax liability paid from life insurance or liquid funds in your residuary estate.

An estate plan can protect an inheritance for a special needs child without disqualifying the child from Medicaid or Supplemental Security Income.

An estate plan can ensure that the life savings you worked hard to accumulate (and your personal affairs) will be kept private by avoiding probate with a revocable trust.

An estate plan incorporating an irrevocable trust or lifetime gifting can help reduce inheritance taxes legally.

An estate plan (using a trust) can protect your life savings or your life insurance proceeds from being blown by little Johnny on a Maserati, upon reaching age 18. An estate plan can even bring hope to beleaguered parents and grandparents everywhere.  Suppose your heart’s sole desire is for little Susie or Johnny to take medication/ finish college/ remove the tattoos/get a haircut and get a real job. Having all your post-mortem dreams ultimately come true could be as simple as leaving a conditional bequest in your last will and testament or trust. However, conditional gifts are very rarely written into wills or trusts due to the heartache and hard feelings caused.

Choupette’s legacy teaches us that even if your estate is limited, the possibilities are not.  For best results, consult an experienced and knowledgeable tax and estate planning attorney, who can help you effectuate your testamentary intentions.

Questions? Let Jane know.

Jane Fearn-Zimmer is an Elder and Disability Law, Taxation, and Trusts and Estates attorney. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Estate Planning Check Up and the New Tax Laws

On By Jane Fearn-Zimmer, Esq.In Estate Planning, Tax ReformLeave a comment

Estate planning tax reform

The Tax Cuts and Jobs Act of 2017 enacted the most sweeping changes to the federal tax code since 1986. Many people assume that due to the increase in the basic exclusion amount (BEA) to $11,180,000 per individual, only the wealthiest need now estate planning. That is just not true!

Certainly, many fewer federal estate tax returns will be required to be filed. However, it is still important to periodically review your documents and your estate plan.  Most clients should review their existing wills and trusts. Particularly where a formula bequest was incorporated, the estate plan must be reviewed to ensure consistency with the client’s legacy goals.  This is due to the increase of the BEA.  The BEA functions like a sponge to limit or prevent a decedent from any federal estate tax liability at death. The BEA soaks up the decedent’s aggregated lifetime gifts and the assets remaining in the decedent’s estate at the moment of death, allowing the donor’s wealth up to the BEA limit to be transferred free of federal estate and gift taxes. Beyond the BEA, the estate will incur federal estate transfer tax liability. When the BEA was significantly lower, it was very common for estate planners to draft formula bequests, which allocated all of the decedent’s assets up to the decedent’s basic exclusion amount, to a “credit shelter trust” for the benefit of the surviving spouse and/or the descendants of the decedent. The remaining assets would pass outright to or in trust for the surviving spouse. With the doubling of the BEA and with credit shelter trusts which do not name the surviving spouse as a trust beneficiary, those estate plans will now disinherit the surviving spouse, and the surviving spouse will then be entitled to a one-third elective share of the decedent’s augmented estate in New Jersey.  The solution is to update the estate planning now, possibly with a disclaimer formula.  The new law sunsets on December 31, 2025.

At least until the new law sunsets, under the current regime, family limited partnerships remain a viable planning strategy, with the possibility of discounts for lack of marketability and lack of control. Trusts will continue to be useful for non-tax reasons, including privacy by avoiding the probate process, creditor protection, curbing spendthrift children, centralizing asset management, fostering family harmony through controlled asset disposition, and preserving a fund for a special needs beneficiary while protecting the beneficiary’s Medicaid and SSI eligibility.

Questions? Let Jane know.