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October 2012 Archives

Ways to avoid probate in estate planning, P.1

Because probate can be an expensive and time-consuming process, one of the goals of estate planning may be finding ways to keep one's estate out of the probate process. Probate, as our New Jersey readers may know, is a court supervised legal proceeding in which a will is validated and its terms carried out.

Estate Planning Awareness Week encourages thought about life goals and values

Our readers may or may not be aware, but October 15 through October 22 is Estate Planning Awareness week. Admittedly, estate planning awareness is something lawyers like because it highlights the services they can offer. But the reality is that everyone can benefit from engaging in estate planning at an appropriate level.

End of life conversations: the other half of end of life planning

End of life issues are very personal and can be difficult decisions for families to make on a number of levels. Because these issues are so serious, it is important to address them as part of one's estate planning, and well ahead of time. One good reason for this is to avoid a situation where the family cannot agree about how to care for you.

Nursing home planning can preserve estate assets

With the rising costs of nursing homes and long-term care, it is critical that everybody engaging in estate planning look at how they plan to fund their own care. The reality is that the average cost for care is around $73,000 per year and is on the increase. It doesn't take long, then for nursing home costs to eat away at one's wealth.

Mitt Romney to Iowa farmers: I would abolish estate tax

Mitt Romney, in an effort to garner support from farmers in the Midwest, promised to abolish the estate tax earlier this week during a campaign in Iowa. As our New Jersey readers may know, the Bush-era tax cuts are set to expire at the end of the year, and there has been a bit of a scramble to take advantage of the unusually high exemption amount, which is currently at $5.2 million. In 2013, the exemption amount is set to drop to $1 million.

It pays to be savvy when setting up a trust

Even as we age, we never stop filling out paperwork. This is especially true for parents of children with disabilities seeking to set up a trust for their child. Decisions about this process may affect the parent's own eligibility for Medicaid. To qualify for Medicaid benefits for a nursing home, an unmarried individual is only permitted to retain $2,000 or $4,000 depending on the Medicaid program. Transferring assets at less than what is considered fair market value comes with a penalty enacted by Congress, which results in the person who transferred those benefits being denied Medicaid for a period of time. This is something for older parents to bear in mind to protect themselves for when they may need those services.

Is there a payoff to establishing a living trust?

Establishing a living trust has its benefits, but not necessarily all those typically hoped for. While some people may want to avoid probate court by having a living will in place, this may not be the best reason. In New Jersey, the costs of probate relate directly to the length of the will, specifically the number of pages, and have no connection to the value of the estate. This is something to keep in mind when doing estate planning, as is the fact that spending money to establish a revocable trust does nothing to save on death taxes.