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Don’t forget the Tried-And-True Gifting Strategies in 2012

Posted on Thu Sep 20, 2012, on Estate Planning

Rightfully so, much emphasis is being put on utilizing Gift Giving strategies that are scheduled to disappear on January 1, 2013. But when considering these strategies, don’t forget gift strategies that have worked in the past and continue to be cornerstones of most estate plans.

Take Advantage of The Annual Gift Exemption: When congress created the Gift Tax to plug loopholes that existed in the Federal Estate Tax, they created several categories of gifts that were considered “good gifts”, not subject to the gift tax. One of these exemptions is an annual gift to any number of persons. That rate is now adjusted for inflation, and for 2013 is a maximum of $13,000. Couples can lend each other the exemption so together can give $26,000 to any number of individuals. These gifts are then excluded from the estate and pass Gift and Estate Tax free to the recipient.¹

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Maximizing Charitable Income Tax Deductions When Donating Art

Posted on Thu Sep 20, 2012, on Estate Planning

If you are an art collector interested in giving a piece of art to a charity, what factors should you consider in order to maximize your income tax deduction?

Short Answer: If a person as a collector contributes highly appreciated art purchased and held over one year to a qualified public charity and reports the contribution along with a supporting appraisal (if the art exceeds $5,000.00 in value) the person will avoid recognizing the built in capital gains, avoid paying inheritance and estate taxes and the person will be able to deduct the full fair market value of the donation as of the date of the contribution.

Long Answer: The Tax Code encourages the contribution of art to tax exempt organizations by allowing deductions against income for the gift. The size of the deduction will depend on several factors.

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Benefits of a QDOT for a Non-Citizen Spouse.

Posted on Wed Sep 19, 2012, on QDOT Trust

Any transfer of assets at death involves a variety of tax consequences, but estate planning for a married couple where one spouse is not a United States citizen involves unique taxation issues and planning. Couples who find themselves in this unique circumstance should consider the benefits of an estate plan that includes a Qualified Domestic Trust (QDOT).

In 2012, the federal estate tax provides a credit of $5,120,000, meaning that the first $5,120,000 of any estate not diminished by taxable lifetime gifts will pass free of the federal estate tax.¹ This exemption is scheduled to fall to $1,00,000.00 in 2013². Further, Section 2056 of the Internal Revenue Code contains the “marital deduction,” which provides that any property left to a surviving spouse following a decedent’s death is not taxed until the surviving spouse’s death. These provisions give married couples options for deferring estate tax payments until after the surviving spouse’s death.

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Estate Administration in a Digital Age

Posted on Wed Sep 19, 2012, on Probate and Estate Administration

Today, people utilize the Internet and social media more than ever before, raising new issues for estate administration. Many people receive bank, credit card, and utility statements electronically, and practically everyone has a Facebook account. Electronic mail and Facebook may hold important information for a personal representative seeking to administer an estate.¹ Obtaining access to that information, however, is a brand new area in probate law.

In some cases, the personal representative may know the password to the decedent’s email, Facebook, and Twitter accounts. In these cases, accessing bills and statements as they come in is relatively easy. But is a personal representative² authorized to access these accounts? In situations where the personal representative does not know the password, how can they obtain it?

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Estate Planning Opportunities; Use Them or Lose Them!

Posted on Mon Sep 17, 2012, on Estate Planning

Only a little over three months remain to maximize estate tax and gift tax opportunities that are scheduled to disappear in 2013. There is still time, but if you are going to act you need to start working with your estate planning lawyer soon.

Never have the Gift Tax and Estate Tax exemptions been higher than they are currently. The Federal Estate and Gift Tax Exemptions are currently $5,120,000.00. If congress takes no actions, these exemptions fall to $1,000,000.00 in 2013. This change exposes to taxation an additional $4,120,000 to those who die or gift in 2013 vs. 2012, increasing the tax due by hundreds if not millions of dollars.¹

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What Are the Tax Advantages of Revocable Trusts?

Posted on Mon Aug 20, 2012, on Revocable Trusts and Living Trusts

A revocable trust, or its more popular name a “Living Trust”, is an increasingly popular estate planning tool. The Living Trust serves many useful purposes, but many people are told that one purpose is to reduce taxes. This is not true. A Revocable Trust does not reduce income taxes, estate taxes, gift taxes, generation skipping taxes or inheritance taxes. In short, there is no tax advantage gained by a Living Trust. If someone is trying to sell you on the idea of forming a Revocable Trust based on tax savings, run away!

Some trusts do create various tax benefits. So why does a Living Trust provide no tax benefit?

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New Jersey Will Contests

Posted on Mon Aug 13, 2012, on Will Contests and Will Challenges

Any number of reasons may cause a contest. Sometimes a will contest stems from the deceased’s discomfort with death and taxes, so issues that should have been addressed during lifetime are left unresolved and can only be settled in the Surrogate’s Court. Some Will contests are due to bad drafting by attorneys not trained and experienced in wills, trusts and estate planning. Sometimes dishonest actions by dishonest people cause will contests. As veteran Will Contest Attorneys we get to see the good, the bad and the ugly side of people. From Sussex County in the North, to Cape May County in the south, greed will often raise its ugly head when a person with assets is in a weakened state and susceptible to undue influence.

The parties to a will contest may vary. Our will contest lawyers have represented heirs, descendants, family members who were excluded or received reduced amounts in the Will and charities or other non-profits who the deceased promised a share of the estate. If charities are involved, the attorney general may also become a party to the contest.

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Camden County Will Challenges, Explained for the Non-Lawyer.

Posted on Thu Aug 9, 2012, on Will Contests and Will Challenges

Most people are honest, but some people are not.

As New Jersey Challenge Attorneys, we focus our litigation practice exclusively on Will Challenges, Will Contests and other estate disputes. Over our many years as Will Challenge Lawyers we have seen the dishonest things that some people will do; including forging wills and using undue influence on people to sign wills.

Time Limits, 4 months or 6 months: If you feel a Will Challenge need be made, act quickly or you may lose your chance for challenging the Will. If you are a New Jersey resident, you only have four months to file your petition or if you are a non-New Jersey resident you have only six months. If you delay, you are bared from filing your Will Challenge and a wrong might go undiscovered. It would be even better if you contact us prior to the Will being filed, as our Will Challenge Lawyers might be able to prevent the Will’s even be filed with the Surrogate.

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Dying Without a Will in New Jersey

Posted on Mon Aug 6, 2012, on Intestacy, Dying Without a Will

Many New Jersey residents will die without a Will. Many will die unexpectedly before they can prepare a Will, but most people simply just don’t get around to writing a Will. If you die without a Will in New Jersey, you are said to die “Intestate”, or without testamentary documents. It is not true that if you die without a Will in New Jersey that your assets pass to the state. Instead, a set of rules decide who is in charge of your estate and to whom your assets pass.

Surrogate’s Court: If a New Jersey relative of yours dies without a Will (“Intestate”), and you wish to represent that person’s estate, you must get permission though the Surrogate’s Court. Each county has a Surrogate’s Court, so the first step is to determine which Surrogate’s Court has jurisdiction over the estate. For example, if the deceased was a resident of Camden County but died in a Berks County hospital, it is the Camden County Surrogate’s Court that has jurisdiction over the case. At times a person becomes ill and moves just prior to death. For example, if a person lived her entire life in Gloucester County, but became ill and moved to her daughter’s house in Atlantic County two months before she died and she would have never moved but for the illness, the Gloucester County Surrogate’s Court has jurisdiction over the estate.

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What is the Generation Skipping Tax? (Part II)

Posted on Tue Jul 17, 2012, on Estate Planning

In my previous article I introduced you to the basic understanding of Generation Skipping Tax; its origins, purpose and theory. This Article will take you a little deeper into the actual tax terms and how it is applied. My hope is that after reading these articles my clients will have a working knowledge of the Generation Skipping Tax and, with as much enthusiasm a non-tax geek can have, embrace planning techniques that help reduce or even avoid the Generation Skipping Tax.

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I have had Peter Klenk prepare and revise my will. Always professional, knowledgeable and offers great advice. Highly recommend

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Great firm. Great people. Happy to refer folks in need to estate planning to Peter and his team. They do great work.

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Peter was excellent. He explained everything very clearly and is super friendly. My wife and I originally tried using a lawyer through group legal coverage, but unfortunately the old adage - "you get what you pay for" - applied to the other lawyer, and we decided to go with a real professional.

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Andrea Wilson

Peter is excellent. I had a very complicated situation with my parents' estate planning and potential Medicaid needs. Peter was very knowledgeable in estate planning matters, able to define the best solution for the situation. Additionally, he was congenial and able to communicate effectively to my senior citizen parents the benefits of estate planning. He earned my trust, and more importantly, my parents' trust in a 45 mins consultation period. Highly recommend Peter. He is very easy to work with.

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