Additional State Income Tax Exemption for New Jersey Veterans

Additional State Income Tax Exemption for New Jersey Veterans

Welcome news: the State of New Jersey, Department of the Treasury, Division of Taxation has announced that veterans honorably discharged or released under honorable circumstances from active duty in the Armed Forces of the United States by the last day of the tax year will be able to claim an additional $3,000.00 exemption on their New Jersey Gross Income Tax returns commencing with tax year 2017.  The exemption applies to all such veterans not just those separating from service in 2017, and applies for tax years going forward, not just for 2017.  A copy of Form DD-214, Certificate of Release or Discharge from Active Duty, must be filed the first time the exemption is being claimed. The form does not need to be provided each year.  The United States National Archives and Records Administration can assist with obtaining a copy of the DD-214.  You can certify for the exemption by sending a copy of your DD-214 and Veteran Exemption Submission Form before you file, which may help process your return faster.  A spouse (or civil union partner) is also eligible for an exemption if he/she is a veteran who was honorably discharged or released under honorable circumstances and a joint return is being filed. This exemption is in addition to any other exemptions the veteran taxpayer is entitled to claim and is available on both resident and nonresident returns. The exemption, however, can not be claimed for a domestic partner or for dependents.

To read Division of Taxation announcement see:

http://www.state.nj.us/treasury/taxation/newexemptionveterans.shtml

For copy of Veteran Exemption Submission Form:

http://www.state.nj.us/treasury/taxation/pdf/veteransexemptionform.pdf

For obtaining copy of your Form DD-214:

https://www.archives.gov/veterans/military-service-records

Estates and Beneficiaries: Outstanding Child Support and other Obligations

Estates and Beneficiaries:  Outstanding Child Support and other Obligations

One of the duties of an Executor of an estate, before making distributions to the beneficiaries of the estate, is to conduct a child support search.  That is, a search to determine whether the beneficiary who is about to receive a distribution from the estate, owes any back child support obligation.  Our experience has been that in most instances the search comes back clean and the distribution, assuming the appropriate Receipt and Refunding Bond has been executed, may proceed.  If, however, there is an outstanding child support obligation, then it must be dealt with, which typically involves having to contact the appropriate probation department through which the child support payments were to have been made, and the inheritance being used towards satisfying the outstanding amount owing.  Should the Executor fail to conduct the search, and there be an outstanding obligation, there is personal exposure for the Executor, as well as for the attorney for the estate. 

The issue of outstanding child support obligations also arises in connection with decedent himself or herself. That is, an outstanding child support obligation may be a debt of the estate itself.  If the estate is solvent, this is going to be one of the debts to which the Executor will need to attend.  If the estate is insolvent, payment of the obligation, as well all of the other estate debts, becomes problematic, in that, by its nature, the insolvent estate has insufficient assets with which to pay all of its debts.  In the Wills which I draft, if there are any specific devises under the Will or any general pecuniary devises (i.e., dollar amount devises) in the Will, I frequently will include what is called an “abatement clause” which addresses how assets of the probate estate are to be consumed in paying debts if the estate assets are insufficient.  

The New Jersey Probate Code itself contains a statute which addresses the order of priority for the payment of estate debts. It is set out under N.J.S.A. 3B:22-2.  To be noted, reasonable funeral expenses are prioritized first, and then administration expenses of the estate are prioritized second. After that, third, are amounts, if any, which may be owing to the Office of the Public Guardian for Elderly Adults, followed fourth by debts and taxes with preference under federal and state laws.  Arguably an outstanding child support obligation would fall under the fourth category, as would a Medicaid recovery claim.  Fifth are claims for reasonable medical and hospital expenses of the last illness of the decedent, including compensation of persons attending the decedent.  Sixth are judgments entered against the decedent according to the priorities of their entries respectively. Last are all other claims.  Thus, the unsecured creditor is at the bottom of the pile, yet Executors frequently make the mistake of paying them first.

Note that N.J.S.A. 3B:22-2 further provides that,

“No preference shall be given in the payment of any claim over any other claim of the same class, and a claim due and payable shall not be entitled to a preference over claims not due. The commencement of an action against the personal representative for the recovery of a debt or claim or the entry of a judgment thereon against the personal representative shall not entitle such debt or claim to preference over others of the same class.”

If there is an outstanding child support obligation, it can be expected that the Office of Child Support Services may try to levy against, for example, bank accounts which the decedent owned.  Should that happen, the estate should timely contest the attempted levy (which would be seeking to grab the bank funds), and assert that such action would violate the aforementioned New Jersey statute on the order of priority for the payment of the estate’s debts.  We have successfully made that argument.  The funds which would have been levied against, can then, (assuming the account would pass through the estate), make their way into the pool of probate assets for use by the Executor in paying the aggregate of the estate obligations in the order of priority set out in the statute as discussed above. 

Also to be noted, the Executor should be aware of the Multiple Party Deposit Account Act, pursuant to which it may be possible for the Executor to claw back into the probate estate monies in bank accounts in which the decedent had an ownership interest but because of the titling on the account would have passed outside the probate estate directly to one or more joint owners or beneficiaries.  We have had to use that statute in a number of estates over the years. 

Note that an insolvent estate may give rise to the need for an insolvency proceeding in the Superior Court, Chancery Division – Probate Part, in the county where the Will was probated or the intestate administration commenced. 

The particular facts of any estate vary, thus the Executor should consult with legal counsel before embarking upon the payment of the estate debts, and as indicated above, the Executor must be mindful of unpaid child support obligations of the both the decedent and the beneficiaries of the estate. Very early on in the estate administration the Executor is going to need to get a handle on the estate debts and what assets are available to pay off those debts. 

New law allows disabled individuals to set up Section 1396p(d)(4)(a) self-settled disability trusts.

         On December 13, 2016 President Obama signed into law the 21^st Century Cures Act (the “Cures Act”), which included, inter alia, Section 5007 entitled “Fairness in Medicaid Supplemental Needs Trusts”[1].  Effective immediately upon the law’s signing, an individual who is disabled, but mentally competent, has now been enabled to create a disability trust for his or her own benefit, which trust will not be treated as an available resource for Medicaid eligibility purposes, and transfers to which trust will not be penalized for Medicaid eligibility date purposes.  Prior to enactment of this new law, if a disabled individual, whether or not mentally competent, had assets or received assets (for example, by an inheritance) in excess of the Medicaid eligibility ceiling, he or she generally either had to spend down those assets or the individual’s parent, grandparent, legal guardian or a court of appropriate jurisdiction, had to set up a special needs trust for that individual’s benefit. The trust in question, which is called a Section 1396p(d)(4)(a) Trust, or a Disability Trust, is irrevocable and must contain a recoupment provision whereby the state Medicaid authority will be repaid on the individual’s death or earlier termination of the trust, for appropriate lifetime governmental benefits received by the individual.  Although the recoupment provision still applies, the amendment to Section 1396p(d)(4)(a) now allows the individual himself or herself to be able to set up the trust. Thus, and in particular, an individual who is disabled but is mentally competent, but who does not have a living parent or grandparent, and who does not have a legal guardian, will no longer need to go to court to get the court to set up such a trust for his or her benefit.  This new measure should enable the disabled person to save thousands of dollars in legal and related fees that a previously required court proceeding would have engendered, as well as saving the time a court proceeding would have taken.  It is hoped that New Jersey will recognize these trusts immediately, rather than having to await state legislative/regulatory action. 

              To be noted, Section 1396p(d)(4)(a) or Disability Trusts are created with the disabled person’s own funds.  Thus, third party trusts and planning are not affected by Section 5007 of the new legislation.  That is, a parent or other person setting up a supplemental needs trust for the benefit of the disabled individual, remains separate and distinct from the requirements as to the creation of a trust for the disabled person’s own funds.

December 17, 2016                                                                        Barry M. Benson, Esq.

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[1] SEC. 5007. FAIRNESS IN MEDICAID SUPPLEMENTAL NEEDS TRUSTS.

(a) IN GENERAL.—Section 1917(d)(4)(A) of the Social Security Act (42 U.S.C. 1396p(d)(4)(A)) is amended by inserting ‘‘the individual,’’ after ‘‘for the benefit of such individual by’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to trusts established on or after the date of the enactment of this Act.

New Jersey Estate Tax phase out and repeal becomes official

New Jersey Estate Tax phase out and repeal becomes official: Governor signs new measures into law. Gas tax increase, increase in the retired income tax exclusion, decrease in sales and use tax rate, new veteran’s exemption, and increase in the earned income tax credit are also part of the legislation.

On Friday, October 14, 2016, Governor Christie signed into law New Jersey’s controversial gas tax increase (23 cents a gallon, effective November 1, 2016) in order to replenish the Transportation Trust Fund.  As part of the new legislation, the New Jersey Estate Tax, as I wrote in my October 9, 2016 blog post, is to be phased out and eliminated. Specifically, the New Jersey Estate Tax exclusion amount is going to rise from an equivalent of $675,000.00 in 2016 to a “true” exclusion amount of $2,000,000.00 on January 1, 2017 for the estates of year 2017 decedents.  The New Jersey Estate Tax is repealed for the estates of decedent’s dying on or after January 1, 2018. The New Jersey Transfer Inheritance Tax was not affected by this new legislation, and remains in place. 

Aside from the gas tax increase which motorists will encounter every time they go to the pump, retired New Jersey residents should look favorably upon the pension and retired income tax exclusion which will see an increase phased in over four years:

Filer Type        Present       2017          2018         2019          2020

Joint                 $20,000     $40,000     $60,000     $80,000    $100,000

Individual        $15,000     $30,000     $45,000     $60,000    $  75,000

Separate          $10,000      $20,000     $30,000     $40,000    $  50,000

The New Jersey sales and use tax rate will decrease from 7% to 6.875% effective on January 1, 2017 and then from 6.875% to 6.625% on January 1, 2018.

The legislation provides for a new $3,000.00 annual personal exemption under the New Jersey gross income tax for any individual New Jersey gross income taxpayer who is a veteran honorably discharged or released under honorable circumstances from active duty in the Armed Forces of the United States, a reserve component thereof, or the National Guard of New Jersey in a federal active duty status.

The New Jersey Earned Income Tax Credit (NJ EITC) under the gross income tax will increase from 30% to 35% of the federal benefit amount beginning in Tax Year 2016.

October 15, 2016                                                     Barry M. Benson, Esq.

Q-TIP Trusts and Portability: The upside of Rev. Proc. 2016-49

Q-TIP Trusts and Portability: The upside of Rev. Proc. 2016-49

Back in 2001, the IRS issued Rev. Proc. 2001-38, an important procedural announcement concerning Q-TIP elections treated as a nullity.  That Revenue Procedure, as explained below, was modified and superseded by Rev. Proc. 2016-49, effective September 27, 2016.  The specifics:

Under the federal estate tax, there is allowed what is called the “marital deduction” (a dollar for dollar deduction under IRC Section 2056) for property passing to a surviving spouse either outright or in certain types of trusts (which I will generically refer to as a “marital trust”). One particular type of marital trust, called a Qualified Terminable Interest Property Trust (“Q-TIP Trust”) basically requires that all of the net income of the trust be payable to the surviving spouse for life, and that the spouse be the sole beneficiary of the trust during his or her lifetime.  Further, it is required that an election be made on Schedule M of the federal estate tax return of the decedent spouse’s estate to qualify that trust, or the desired portion thereof, for the marital deduction.  Upon the surviving spouse’s death the trust would be included in his or her gross estate under IRC Section 2044. 

In Rev Proc 2001-38 the IRS addressed whether there could be relief for a surviving spouse when a Q-TIP election was made for a trust on the deceased spouse’s federal estate tax return, when owing to the size of the decedent’s taxable estate, and the available credit amount, no federal estate tax would be imposed on the deceased spouse’s estate regardless of whether or not a Q-TIP election was made.  In ruling that the QTIP election would be treated as a nullity, the IRS reasoned, under logic which seemed appropriate at the time, that no-one would make an unnecessary election to qualify for the marital deduction in the first spouse’s estate and cause the trust to be included in the surviving spouse’s estate, if a marital deduction was not needed to reduce the federal estate tax to $0.00. 

Fast forward to 2016. The federal exclusion amount is $5,450,000.00 and let’s say that under the decedent’s Will, his or her estate of the same size is all left in a trust for the surviving spouse who is entitled for life to all of the net income from the trust and so much of the principal as determined necessary for the spouse’s health, maintenance, support, and education.  If the executor filed a federal estate tax return, and made a QTIP election and a portability election, the executor could chose to pass on to the surviving spouse the deceased spouse’s unused exclusion amount under IRC Section 2010(c). So the executor would like to make a QTIP election for the entire trust to qualify for the marital deduction (all $5,450,000.00) so that all of the decedent’s unused $5,450,000.00 exclusion amount could be passed on to the surviving spouse, who would then have the decedent’s unused exclusion amount ($5,450,000) as well as his or her own exclusion amount ($5,450,000.00 in 2016).  And by making a Q-TIP election for the trust, that would cause the trust to be included in the surviving spouse’s gross estate at his or her death.  And that means that the assets in the trust, under current law, would receive a step up in basis equal to their value on the date of the surviving spouse’s death.  On the other hand, if Rev. Proc. 2001-38 applied and rendered the Q-TIP election in the first spouse’s estate a nullity because no portion of the trust needed to be elected to qualify for a marital deduction in order to reduce the first decedent’s federal estate tax to $0.00, then there would be no unused exclusion amount to pass on to the surviving spouse, and there would be no trust included in the surviving spouse’s estate upon his or her subsequent death. Therefore, and accordingly, the trust assets would not get a basis adjustment on the surviving spouse’s subsequent death.  Thus, the question in Rev. Proc. 2016-49 basically involved whether an executor can file an estate tax return in order to make a portability election and also make an otherwise unnecessary federal estate tax Q-TIP marital deduction election.  The bottom line answer is that yes it can be done for federal estate, gift, and generation-skipping transfer tax purposes. That is, more particularly:

Rev. Proc. 2001-38 provides a procedure by which the IRS will disregard and treat as a nullity for federal estate, gift, and generation-skipping transfer tax purposes a Q-TIP election made in cases where the election was not necessary to reduce the estate tax liability to zero.  Thus, we had a case come into the office where, in the estate of the first spouse to die, an improper QTIP election had been made on the deceased spouse’s federal estate tax return, even though no such election was needed in order to reduce the federal estate tax for the deceased spouse's estate to $0.00.  As a result, the trust in question would have been included in the surviving spouse’s estate when the survivor later died. By asserting the applicability of Rev. Proc. 2001-38, however, we were able to exclude the trust from the surviving spouse’s estate, and thereby save a significant amount of federal estate taxes which would otherwise have been due and owing on the survivor's death. 

Rev. Proc 2016-49 takes into account what happens if the executor of the first estate not only makes what would otherwise appear to be an unnecessary QTIP election, but also makes a portability election under IRS Section 2010(c).  Recall that under Rev. Proc. 2001-38 the QTIP election would be a nullity. However, under Rev. Proc. 2016-49, the procedure treats as void certain QTIP elections, while treating as valid certain others. More particularly:

Pursuant to Section 3.01, Rev. Proc. 2016-49 treats as void QTIP elections made in cases where all of the following requirements are satisfied:

(1)  The estate’s federal estate tax liability was zero, regardless of the QTIP election, based on values as finally determined for federal estate tax purposes, thus making the QTIP election unnecessary to  reduce the federal estate tax liability;

(2)  The executor of the estate neither made nor was considered to have made the portability election as provided in Section 2010(c)(5)(A) and the regulations thereunder; and

(3)  The requirements of Section 4.02 of the revenue procedure are satisfied.

Pursuant to Section 3.02, Rev. Proc. 2016-49, however, does not treat as void QTIP elections made to treat property as QTIP in cases where:

(1)  A partial QTIP election was required with respect to a trust to reduce the estate tax liability and the executor made the election with respect to more trust property than was necessary to reduce the estate tax liability to zero;

(2)  A QTIP election was stated in terms of a formula designed to reduce the estate tax to zero. See for example Section 20.2056(b)-(7)(h), Examples 7 and 8;

(3)  The QTIP election was a protective election under Section 20.2056 (b)-7(c);

(4)  The executor of the estate made a portability election in accordance with Section 2010(c)(5)(A) and the regulations thereunder, even if the decedent’s DSUE amount was zero based on values as finally determined for federal estate tax purposes; or

(5)  The requirements of Section 4.02 of the Revenue Procedure (2016-49) are not satisfied.

To be noted, QTIP elections for which relief has been granted under the procedures of Rev. Proc. 2001-38 are not within the scope of Rev. Proc. 2016-49.

In the case of a QTIP election within the scope of Section 3.01 of Rev. Proc. 2016-49, the IRS will disregard the QTIP election and treat it as null and void for purposes of IRC Sections 2044(a), 2056(b)(7), 2519(a), and 2652. The property for which the QTIP election is disregarded under the Rev. Proc. will not be includible in the gross estate of the surviving spouse under Section 2044, and the spouse will not be treated as making a gift under Section 2519 if the spouse disposes of part or all of the income interest with respect to the property. Finally, the surviving spouse will not be treated as the transferor of the property for generation-skipping transfer tax purposes under Section 2652(a). Conversely, if the QTIP election is valid, then the opposite shall apply. That is the property will be includible in the gross estate of the surviving spouse under Section 2044, and the spouse will be treated as making a gift under Section 2519 if the spouse disposes of part or all of the income interest with respect to the property, and the surviving spouse will be treated as the transferor of the property for generation-skipping transfer tax purposes under Section 2652(a) (unless as to GST, a reverse QTIP election is made under Section 2652(a)(3)).

Section 4.02 of Rev Proc 2016-49 sets out the procedural requirements for relief to treat a QTIP election as void.

Thus, an executor could in an appropriate estate administration file a federal estate tax return for the first spouse to die, making a QTIP election for marital deduction purposes and a portability election for DSUE purposes. 

Finally it should be noted that there is renewed interest amongst estate planners in utilizing general power of appointment trusts as an alternative way to cause inclusion of the marital trust in the surviving spouse’s estate, preserve unused exclusion for portability purposes, and get a step up in basis of the trust assets on the surviving spouse’s death.  With the New Jersey Estate Tax scheduled for repeal on January 1, 2018, the use of general power of appointment trusts may gain more traction in marital deduction estate planning as a basis adjustment mechanism where a trust is desired. 

Should you wish to discuss the impact of Rev. Proc. 2016-49 upon an estate you may be administering, or the import of the procedure on your estate planning, please do not hesitate to call me at the office, (908) 359-8000, or to send me an email at bmblaw@ymail.com.

October 12, 2016                                                        Barry M. Benson, Esq.

A few words about: Elimination of the New Jersey Estate Tax

Phaseout and Elimination of the New Jersey Estate Tax

          As many of you know, New Jersey has two death taxes that are imposed at the time of a resident decedent’s death.  One is the New Jersey Transfer Inheritance Tax; the other is the New Jersey Estate Tax.  As discussed below, the New Jersey Estate Tax is being phased out and eliminated assuming Governor Christie signs the State Senate and Assembly passed legislation; the New Jersey Transfer Inheritance Tax remains.

          At present, (2016), the excludable amount for New Jersey Estate Tax purposes is $675,000.00. I contrast that with the applicable exclusion amount for federal estate tax purposes which for a year 2016 decedent is $5,450,000.00 (to the extent not offset by lifetime gifts in excess of the annual exclusion, and excluding any Deceased Spouse Unused Exclusion amount (where applicable) received from a deceased spouse).  New Jersey’s $675,000.00 amount has historical ties to the federal estate tax credit amount which was in place back on December 31, 2001. But that is about to change. Thus, assuming Governor Christie signs the legislation:  

          Effective January 1, 2017, the New Jersey Estate Tax excludable amount is going to increase to $2,000,000.00.  That figure, of course, still pales in comparison to the federal exclusion.  However, come January 1, 2018, the New Jersey Estate Tax will be eliminated, repealed.  That will leave just the New Jersey Transfer Inheritance Tax in place, which often results in a $0.00 tax in many instances (where, for example, the assets are passing to a spouse, or children or grandchildren, or certain trusts for their benefit, or to charities).

          From a planning standpoint, for a married couple, the format of the estate plan most frequently centers on (i) whether to set up the estate plan so that the entire residuary estate passes to the surviving spouse subject to the spouse being able to disclaim assets into what we call a contingent Disclaimer Trust, or (ii) whether to devise to the surviving spouse an optimum amount or portion of the estate designed to reduce the federal estate tax to $0.00, with the balance then going into a Family Trust (or Credit Shelter Trust or By-Pass Trust as it is also frequently called). In both cases, the Disclaimer Trust or the Family Trust are typically set up for the sole benefit of the surviving spouse, designed to provide the spouse with all of the net income from the trust assets, and so much of the principal as needed for the spouse’s health, maintenance, support, or education (which are considered to be what are referred to as “ascertainable standards”).  In both cases, the two types of Trusts are designed to keep the assets in the subject trust out of the estate of the surviving spouse for death tax purposes when he or she later dies.  Thus, this type of planning is most often utilized to provide for the surviving spouse in a tax advantageous manner.

          For those couples who live in New Jersey, and who utilized the optimum marital deduction, balance to the Family Trust approach in their Wills, we would frequently also include language which basically said that if the decedent spouse was a New Jersey resident and if the New Jersey Estate Tax was decoupled from the federal estate tax, which it has been since 2002, that in such event, the optimization of the marital deduction amount to pass to the surviving spouse, and conversely the balance to pass to the Family Trust, would be optimized for New Jersey Estate Tax purposes rather than for federal estate tax purposes. Previously this would mean that, in effect, the Family Trust would be funded with upwards of $675,000.00 (with an eye on the above mentioned New Jersey Estate Tax excludable amount), and the balance of the estate would pass to the surviving spouse either outright or in a type of trust designed to qualify for the marital deduction (a “Marital Trust”).

          With the upcoming changes to the New Jersey Estate Tax, for a year 2017 decedent, however, a New Jersey optimized Family Trust would be funded with upwards of $2,000,000.00 rather than just $675,000.00. But then starting in 2018, with repeal of the New Jersey Estate Tax, there would be no New Jersey optimization, and the language optimizing for federal purposes would once again rule.  In a Will where the entire residuary estate was devised to the surviving spouse, but with the inclusion of a contingent Disclaimer Trust in the document, the amount the surviving spouse might disclaim in year 2017 would increase to upwards of $2,000,000 with an eye on New Jersey Estate Tax, (and again that being up from $675,000.00 under present law).  In year 2018 the surviving spouse might disclaim upwards of the full federal exclusion amount (which in tax year 2016 would be $5,450,000.00 and increases with inflation).  The surviving spouse in 2018 would not have to worry about disclaiming an amount permissible for federal estate tax purposes, but too large for New Jersey Estate tax purposes and thereby trigger the imposition of New Jersey Estate Tax. For example: in year 2016 if the surviving spouse disclaimed $5,450,000.00 the amount he/she disclaimed over $675,000.00 would be subject to New Jersey Estate tax.  But as I said, come year 2018, this type of problem for a New Jersey resident should be eliminated. 

          From a planning standpoint, for a married couple, depending upon the couple’s estate size, the planning choice going forward will still come down to, in many instances, whether (i) to choose to optimize the marital deduction with the balance going into the Family Trust versus (ii) whether to leave the entire residuary estate to the surviving spouse with a contingent Disclaimer Trust in place. In the latter scenario the surviving spouse would determine whether he/she wants to keep the entire residuary estate or whether to disclaim some of it and have it go into the Disclaimer Trust and thereby keep the assets in the Disclaimer Trust out of his/her subsequent estate for federal estate tax purposes. The decision would be made by the surviving spouse basically within the first 9 months after the death of the first spouse to die.  In contrast, under a Will that utilizes a formula optimization approach, the funding of the Family Trust will occur because of the terms of the Will itself – it will not require the surviving spouse to disclaim assets.  However, in the optimization situation, unless the deceased spouse’s estate is large (say over $5,450,000.00), the surviving spouse would not receive any portion of the probate estate outright (assume assets passing under the Will, aside from, for purposes of this discussion, tangible personal property).  Rather, the entire estate (below the federal exclusion amount) would pass into the Family Trust. 

          Over the past 15 years since the changes made to the federal estate tax laws in 2001, it has been my observation that more and more married couples are utilizing Disclaimer Trust wills, other than in the largest estates.  I do not think, looking forward, that the upcoming repeal of the New Jersey Estate Tax, will mark a change in that trend.  With that said, however, non-tax factors still need to be considered: for example, the health of the surviving spouse; is this a second marriage with children by prior marriages; is the surviving spouse comfortable with managing the investments; and are there assets located in another state. Two tax factors in particular should also be considered in making the formatting decision: that is, (i) is it desired that the assets be included in the surviving spouse’s estate at his/her subsequent death in order to get a step up in basis for those assets at the surviving spouse’s death, and (ii) is generation-skipping planning important or not.  Further, I note that even in a Will designed to create a Family Trust, it is not unusual to also include a contingent Disclaimer Trust in case insufficient assets are passing through the Will to enable full funding of the Family Trust, and thereby make likely the need to possibly disclaim non-probate assets, that is, assets passing outside the Will.

          As with all major changes in the estate tax laws, the passing of new legislation, federal or state, is often an appropriate time to review your estate plan and see what impact the new legislation may have on your plan and whether an update to your documents is advisable. Assuming Governor Christie signs the new law into effect, this is one of those appropriate times. If we may be of assistance to you in this regard, please do not hesitate to call us at (908) 359-8000 or email us at:  bmblaw@ymail.com.

October 13, 2016                                                         Barry M. Benson, Esq.