Disclaiming Your NJ Inheritance to Avoid Creditors

The news that you have been named a beneficiary in someone’s will is generally considered a positive thing; although you (hopefully) aren’t looking forward to the passing of your loved one, it usually feels good to know that they cared enough to bequeath part of their estate to you. There are times, however, when you may not wish to receive your New Jersey inheritance. Do you have the ability to say “thanks but no thanks?”

In New Jersey, estate law says that you can refuse to accept a gift, which in this case is your inheritance. This right to refusal is known as a disclaimer.

While it may seem strange that someone would choose to turn away inheritance money or life insurance proceeds, there are a few reasons for doing so. One of these reasons is avoiding creditors.

Do you have a lot of debt? Are creditors constantly calling? If so, you may worry that all of your inheritance money will go directly to paying off your debts. This is a very valid worry, because that is precisely what would happen if you accepted any kind of windfall while swimming in debt.

If you are attempting to disclaim your inheritance so that your creditors don’t have access to it, you may be hoping to divert that money to your children or other beneficiaries. Unfortunately, in New Jersey, it is illegal to use a disclaimer to get out of paying your creditors. If you choose to disclaim your inheritance under these circumstances, it is highly likely that your creditors will still be able to access the funds due to the Uniform Fraudulent Transfer Act.

Discussing your situation ahead of time with your loved one will give them a chance to protect the money that you are hoping to avoid giving directly over to your creditors. One way to do this is to set up a protective trust or to simply leave you out of the will altogether and instead name your children or other family members as beneficiaries. Your creditors have zero claims to any money that is inherited directly by your children.

Going to these lengths to avoid paying your creditors signals that you are significantly deep in debt. While we understand the desire to keep from handing a large windfall directly to creditors, we also must note that there are steps you should take to get out of debt, and the sooner, the better.

Your options for debt relief in New Jersey depend a lot on the specific details of your situation.

  • How much debt are you carrying in comparison to your income?
  • Are you living beyond your means?
  • What is your credit score?
  • Do you own a home that you wish to keep?
  • How many different kinds of debt are you carrying?

NJ debt negotiation and relief is available to you. Beyond refusing windfalls, disclaiming your inheritance and any other steps you’re taking to avoid paying your creditors, imagine if you didn’t have to worry about those creditors at all anymore. Ridding yourself of a large chunk (or potentially all) of your debt is very possible; your financial future can look anyway you want it to as long as you take the right steps, now.

 

 

Fear of Death: The Newest American Epidemic

As medical advances began to rapidly increase several decades ago in the United States, the concept of death has become “optional” to a large percentage of Americans. Treatments, cures and therapies all have put a giant safety net under our lives; if one doctor can’t fix you, there is almost always one who is willing to try.

While progress in the medical field has allowed millions of people to live healthier, more fulfilling lives – the most notable change has been the rise in life expectancy rates. Over the past century, the average American has tacked on almost 20 years to their expected life span.

Americans who lived a century ago were not scared of death because of how common it was. Today’s Americans view medicine, science, diet and exercise as a cure for the problem of dying. Now that death has become something that typically occurs in old age, growing old feels like the ultimate failure to many. Denial of death has become the newest American epidemic.

Why is this a problem?

The intense fear of death in our country has put blinders on a large portion of the population, making it impossible to talk about or plan for the inevitable.

As the Baby Boomer generation now edges into old age, many of them are “fighting” growing old with facelifts, hair transplants, fillers, implants and a staunchly oblivious attitude toward their chronological age.

Denial of the eventuality of death has led to a stifled community who cannot even think about dying without breaking into a cold sweat. What this means is that no one wants to talk about their own mortality, or that of their parents (who may be Baby Boomers).

Depending on your own spiritual/religious/personal beliefs, you may not agree that death is something to fear. There are groups of Americans who welcome death as a part of life – a passage into a new beginning.

However, statistics show that most Americans are of the mindset that death is something that can be avoided. Many people in this group simply refuse to plan for their own demise, which leaves a whole new set of problems for those who are left behind.

Overcoming your fear of dying is imperative in that you simply must make plans for your children, your assets, your funeral – even your organs. Prior to dying, you may become ill or unable to care for yourself. Without an Advance Care Directive, no one will know your wishes in such a scenario.

Talking to a therapist about your fear of dying can be immensely helpful. You can learn how to make your life matter so that you develop an acceptance of your mortality. These are important steps for your own mental health, and they will allow you to make decisions about the end of your life – decisions that no one should make but you.

Start here. We’ll help gently guide you through setting up a proper estate plan.

 

Image: “No Fear” by Thomas Leuthard – licensed under CC 2.0

Can I Disinherit My Child in My NJ Will?

In New Jersey, as in most other states, a parent is permitted to legally disinherit a child, provided this intention is clearly stated in a valid will. What follows are the steps you must take to ensure that your wishes are fulfilled with regards to your estate, as well as a few caveats you should be aware of.
In New Jersey, if a person dies without having created a will, any property not disposed of in life will be governed by intestate succession rules. These rules are laid out in N.J.S.3B:5-3 through N.J.S.3B:5-14.

Can I choose to simply leave my child out of my will?
Though it might seem to be the most tactful way to handle this delicate matter, you must clearly state that you wish to disinherit your child in a valid will. Otherwise, the child will be protected by Section 3B:5-16 of New Jersey’s statutes, which protects children from accidentally being left out of a parent’s will.

Include a clause that mentions your child by their full name; this will attest to your having been of a sound mind when the will was drafted. You may keep it simple, saying only, “I have intentionally made no provision for my youngest child, John Doe.”

Do I have to state the reason I wish to disinherit my child?

The reason for disinheritance does not need to be included in your will, though whether or not to do so depends on the circumstances. If no ill will is intended, and there is no acrimony in the parent-child relationship, it is probably advisable to include a clause saying so. “I have adequately provided for my beloved son, John Doe, throughout his life; he is now a successful, independent man. I have therefore made no provision for him.”
There may, however, be good reason to remain silent on the cause for disinheritance. If including the motivation could give the child ammunition for challenging the will, or questioning your state of mind, it would be prudent to refrain from doing so. For similar reasons, it is advised that parents do not speak harshly of their child in a will. The disinheritance is most likely an adequately sharp gesture; there is no need to further attack the child after you have passed away.

Keep in mind that a disinherited child will likely attempt to contest the will. However, if you’ve followed the advice laid out here, your assets will be protected.
The Takeaway:

Here are the steps you must follow to protect your assets:

1. You must create a legally binding will.

2. Update this will any time there is a change in the family: birth, marriage, adoption, or death.

3. Clearly state your intention to disinherit your child in your NJ will, and use your child’s full name when you do so.

4. Include the reason if it will help your child feel more positively about the omission, but exclude it if it will give a hostile child more ammunition to contest your will.
Image: “footsteps” by Catrin Austin – licensed under CC 2.0

Asset Planning for Seniors in New Jersey

Seniors today are remaining spry, exceedingly physically fit, and overtly healthier than our predecessors of decades and centuries past. Although extended life expectancies mean more time to make memories with family members and loved ones, they can also mean that your finances have the potential to expire before you do.

While you may have created an estate plan in your 30s or 40s, it is important to reevaluate the details and all components of that plan if/when you live so long that parts of your plan become null, void, irrelevant or outdated.

At Veitengruber Law, we can provide you with long-term planning guidance for all stages of your life. Even if your current estate plan (Last Will and Testament) was drafted by someone other than our firm, we are more than happy to help you protect your assets.

Medicaid rules are numerous and complex. As you approach age 65 (or if you are currently receiving SSDI and are younger than age 65), we will make sure that you understand all of the rules and eligibility requirements.

Medicaid is associated with something called the “five-year look back period,” which can often be confusing and problematic without the help of an experienced New Jersey asset protection attorney. Although we cannot predict the future (yet!), we do have extensive experience in all of the necessary legal areas that relate to the five-year look back period. These areas include: real estate law, foreclosure law, estate planning and credit repair.

You have undoubtedly worked for many years to support your family and to develop a savings/retirement plan that is very important to you. Whether or not your finances will be enough to support you with an extended life expectancy is something we can help you plan for.

As you age, you may need to address potential for long-term care. While this certainly isn’t something that anyone wishes to contemplate, the necessity for nursing home care is a reality as you age. This need may double if your spouse is also still living. We will help you estimate your potential longevity based on your family history and your individual health history in order to come up with the best plan to protect your assets in the event that long-term care is in your future.

If your original estate plan was completed several decades ago, you may need to revisit the designee for executor of your estate. It is possible that your original designee is no longer living, is in poor health, or is no longer part of your life due to divorce, relocation, death, or other circumstances.

In addition to reviewing your estate executor, we will help you to re-evaluate the beneficiaries named in your will. We will also help you assess all components of your estate plan (and determine if they need to be updated based on your current health and that of your spouse) including: your living will, advanced medical directive, power of attorney, your will and any trusts that you have set up.

To find out how we can protect your property and other assets from potential future events, sit down with our professional asset protection team today for a free consultation.

 

Image: “Application Denied” by GotCredit – licensed under CC by 2.0

Estate Planning for Blended Families

As of 2016, blended families outnumbered traditional families in the United States. In fact, the very definition of what constitutes a family has expanded so exponentially that we may wonder what a “traditional” family even looks like anymore. For our purposes in this article, a blended family is one wherein at least one spouse has previously been married. We will also focus on those spouses who bring children of their own to a new marriage.

Blended families are increasing in number due to several factors. Higher divorce rates mean there are more opportunities for single parents to remarry someone who may potentially also be a single parent. Although rising divorce rates may seem like a bad thing, the good news is that less people are staying in unhappy marriages – choosing instead to strive for happiness, which ultimately should have a positive effect on any children in the family.

With the expanded definition of what makes up a family in today’s society, any number of homes contain a new mixture of children – both hers, his, and “theirs.” Additionally, more and more divorces are amicable, with ex-spouses remaining friendly in order to co-parent. With the addition of a step-parent into the equation, the ex-spouse may wonder if their biological child(ren) will continue to be provided for in the other parent’s will.

Estate planning becomes more challenging with the addition of more family members, regardless of how happy everyone is at the time of the wedding. The hard truth about estate planning for blended (or “step”) families is that planning for the well-being of two sets of children can easily escalate into an argument between the new spouses.

It’s critical to remind clients who have recently become part of a blended family to make sure that they make the necessary changes to the beneficiaries listed on their insurance policies and retirement accounts. No matter what a will says, the named beneficiary will take precedence over the will. Failure to remove a former spouse as beneficiary can prove quickly disastrous to a new marriage. Arguments aside, if you pass away while your ex-spouse is still named as beneficiary on your retirement account(s), guess who’s going to get all of that money?

In order to ensure that you’re not missing any crucial components of a solid estate plan after you’ve grown into a blended family, you’ll need to work with a New Jersey attorney who has significant experience working with complex estate plans. Your attorney will be able to advise you on:

  • Reciprocal wills (and how they can be problematic for blended families)
  • Non-reciprocal wills
  • Life insurance in addition to a will to provide for everyone in question
  • Testamentary trusts
  • QTIP trusts
  • Pre-marital agreements
  • Health care power of attorney
  • Living wills
  • Support obligations
  • Real property

The ultimate goal when working to set up an estate plan as a blended family is open communication between everyone involved. By maintaining open conversations about the details of your estate plan, no one will be left with an unexpected outcome.

 

Image: “Mike & Carla’s Wedding” by Jason Meredith – licensed under CC by 2.0

Veitengruber Law: Working with Elder Lawyers

 

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Elder law is the legal practice that focuses on representing senior citizens in regards to age-specific issues like: estate planning, Medicaid, disability, long-term care, administration of wills, guardianship, commitment, elder abuse protection, end-of-life planning, nursing home care and contracts, and many other issues that may arise in the aging population.

Essentially, elder law attorneys have a loaded job description: representing older Americans in just about any legal area you can think of. As you can imagine, it can be a bit overwhelming if a client (or couple) has a lot of needs at the same time.

Attorneys who get the best results for their clients are those who have a narrow area of focus. This allows them to become experts in their practice area(s) in order to both expedite the processes required by their clients and to get reliable, high quality results. Elder law attorneys who concentrate solely on elder law are consistently great at what they do.

Even so, the elder law attorney may still find himself overloaded with work from time to time, when, as mentioned above, a particular client requires a lot of attention. Additionally, any attorney can get overwhelmed if they have a sudden rush of new clients.

Elder law attorneys assist a specific type of client (the aging) in a variety of areas. This makes them the perfect partner for an attorney who specializes in specific areas rather than type of client.

Example: Elderly clients Fay and John come to your elder law practice wanting to set up their estate plans. They have a lot of assets (but not a lot of money), numerous beneficiaries and stipulations, and present a rather challenging and time consuming case. In addition to estate planning, Fay is also having issues with Medicaid that need attention, and John’s sister has just entered a nursing home wherein they suspect she is being neglected and/or abused.

On top of all of that, Fay and John stopped paying their mortgage six months ago and are about to lose their home to foreclosure. Although they knew foreclosure was inevitable, they’ve now realized that renting or buying another home will cost more than they were already paying their mortgage company each month. They want to know how they can save their home, which is scheduled for Sheriff’s Sale in two weeks.

The best option for their elder law attorney in this situation would be to connect them with a local foreclosure defense attorney who has significant experience in “last minute” foreclosure saves. By working together, both attorneys can provide everything Fay and John need so that they can continue living comfortably in retirement.

Other reasons to consider taking a “tag team” approach to an elder law practice include: clients who need to file for bankruptcy, real estate contract review, landlord/tenant disputes, credit repair, debt resolution and elder fraud.

Veitengruber Law is a full-service real estate and debt relief solutions law firm in New Jersey helping clients with foreclosure defense, bankruptcy, credit repair and other debt relief problems. We welcome any elder law attorneys who’d like to collaborate in order to give our joint clients the best results possible through retirement and beyond. We have offices in Monmouth, Burlington and Camden Counties and also serve Ocean, Mercer and Gloucester county clients.

Connect with us on LinkedIn, shoot us an email or give us a call. Monmouth, Ocean and Mercer Counties – (732) 852-7295; Camden, Burlington and Gloucester Counties – (609) 297-5226 or (856) 318-2759.

Image credit: C.Performa

Bankruptcy Law and Family Law: How They’re Connected

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Anyone who has been through a divorce knows that, second only to your love life, your finances are often the hardest hit area during a split. Many people continue to have financial difficulties long after their divorce is finalized, as well. Family lawyers who handle divorce cases know from experience that financial strife can be a huge contention between divorcing couples.

While your family law attorney will assist you in creating a Property Settlement Agreement that settles some of your money troubles (you may begin receiving child support or alimony payments after the divorce is finalized), oftentimes divorced couples will struggle with things like losing their family home to foreclosure, credit card debt, and potential bankruptcy.

As much as your divorce attorney may want to assist you with all of the above money matters, they have to focus their attention on everything within their own wheelhouse to ensure that you (and their other clients) achieve the desired outcome from your divorce. Their duties are many, and include drafting your PSA, attending court dates, negotiating and corresponding with counsel for your soon-to-be ex-spouse, handling domestic violence matters, and much more.

Frequently, family law attorneys find it very beneficial to work in tandem with an attorney who specializes in bankruptcy, real estate and/or debt relief. Because financial strain is a given in most divorces, it can be helpful for everyone involved to work as a team. Your divorce (family law) attorney will walk you through all of the steps of your divorce. With your permission, ideally he would then discuss your case with his tandem bankruptcy attorney, whom you would then work with to clean up your finances.

Of course, family law attorneys attend to matters other than divorce, like name changes, parenting time, grandparents’ rights, pre-nuptial agreements, child custody (unrelated to divorce), adoption, restraining orders, and domestic violence. Some of these matters can also be made easier by working with an attorney who specializes in finances. For example, the financial aspect of adoption matters can be quite intense. While your family law attorney will handle much of the adoption paperwork, he can refer you to a financial specialist like Veitengruber Law if you need more help organizing the necessary finances.

Every attorney has a lot on their plate every single day, regardless of their practice area(s). The best attorneys limit their focus to a limited number of practice areas so as not to get overwhelmed and spread too thin. If your family law attorney attempts to do it all himself, you may find that he’s too busy to set aside time to keep you updated on your case. On the other hand, a smart divorce lawyer will say, “Hey, while I’m working on negotiating your child visitation schedule, why don’t you go see George Veitengruber to start sorting out the fact that you can’t afford your mortgage payment?”

When attorneys work together, their clients always have a better result. Mutually beneficial relationships between experienced professionals give clients a well-rounded experience and optimal outcome. Veitengruber Law welcomes family lawyers in New Jersey (Monmouth, Ocean, Mercer, Burlington, Camden, and Gloucester Counties) to reach out to our firm if and when your clients need our services. We will gladly return the favor so that our mutual clients are well-cared for and happy with our services.

Image credit: Kamaljith KV

Multi-Generational Living Arrangements & Home Ownership Rights

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Today’s modern families are ever-shifting in a multitude of directions, some of which were made possible by the evolution of our nation’s legal system. Still other present-day families form when an adult “child” returns to live at home after attending college, job loss, divorce, or simply by choice. Additionally, many older parents live with a daughter or son and their family in order to cut costs and to share child-rearing duties of the next generation.

Regardless of the reason, the changing structure of the typical American family can raise some questions about ownership of the family home. When other adults outside of the original home owner live together, what are their rights if that homeowner passes away?

Example: Single mom Nicole and her mother decide the best course of action after Nicole’s divorce is for the two of them to move in together. Nicole’s husband kept the marital home, so Nicole and her two children move into her mother’s more-than-ample house. As Nicole’s father passed away several years ago, this decision will allow companionship for Nicole’s mother, and will relieve the financial burden on both women.

Something important for Nicole and her mother to think about is what will happen to the home when Nicole’s mom passes away? Assuming the current living situation continues until such a time, what will Nicole’s rights be?

In New Jersey, Nicole and her mother can modify the home mortgage paperwork to include special language that will protect Nicole and her children from losing the home upon the death of her mom. The deed to the home must say that Nicole and her mother are joint tenants with right of survivorship.

Joint tenancy means that both parties named own the property equally, and upon the death of one of them, the deed to the home will automatically transfer to the other, superseding anything that is stated in the decedent’s will.

If Nicole’s mother had previously created a will indicating that upon her death, her home should be divided equally between all three of her children (Nicole and her two siblings), as long as the proper language was added onto the title documentation, Nicole should have no problem being granted full ownership of the home.

While in theory this is a relatively simple concept, it must be handled with the utmost seriousness and attention to detail.  As has happened in the past, if the joint tenancy language is not used precisely as required, legal disputes can and likely will arise.

Do you have questions about your rights to real property that you shared with another family member or unrelated roommate who has now passed away? If you were not joint tenants, you may still have some recourse, but you will have to act swiftly and with the aid of a very experienced NJ estate planning/real estate attorney.

If you’re currently in a situation like Nicole’s, be proactive and make sure that your living arrangements are solidified for the future by taking title of the home in joint tenancy.

Image credit: Bryan Anthony

For SSI Recipients, Does Inheritance Spell Disaster?

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What is SSI?

SSI stands for Supplemental Security Income, and it is a financial assistance program offered by the US government to low-income United States citizens who are blind, over the age of 65, or otherwise disabled. SSI benefits are available to children who are blind or disabled, as well.

SSI is not to be confused with SSDI (Social Security Disability Insurance), which is available to people who have been working for a significant number of years and have paid “their dues,” so to speak, in the form of Social Security taxes that are deducted from an employee’s paycheck. SSDI can be received by anyone who becomes disabled and is no longer able to work, regardless of their current assets. In comparison, SSI funds are provided by the US Treasury, and recipients must have limited incomes and assets along with specific disabilities.

Can an inheritance affect Supplemental Security Income?

If a family member or loved one bequeaths money to you when they pass away, it’s important to know the possible ramifications so that your financial stability remains intact. Receiving an inheritance does not affect SSDI, as it is based on your earnings as an employee in this country. SSI, however, is distributed on a needs-based system, and because of this, anyone who receives an inheritance can become ineligible for SSI benefits.

Those receiving SSI must be intimately familiar with the strict rules that surround Supplemental Security Income so they don’t risk losing their benefits, which not only provides them with much needed financial assistance, but may also provide them with health care coverage through Medicaid.

Although an inheritance is usually viewed as a positive financial windfall, if it causes you to lose your only steady income and health care coverage, it can definitely spell disaster.

Should all SSI recipients refuse an inheritance in order to avoid losing their benefits?

It would seem unfair to exclude SSI recipients from accepting any inheritance money. After all, people who receive Supplemental Security Income are by definition financially distressed and living with a disability.

In order to help SSI beneficiaries from losing their benefits in order to accept the financial windfall of an inheritance, a Special Needs Trust can be established.

What is a Special Needs Trust?

A Special Needs Trust allows a person with disabilities or special needs to accept their rightful inheritance without jeopardizing their government benefits. Typically, parents or caregivers of a disabled person will create a Special Needs Trust when they are establishing their estate plan (will), although one can also be set up after a person dies.

Instead of inheriting their portion of their parent’s money directly, a person with a Special Needs Trust in place will have a trustee to manage the trust for them. In this way, no (or limited) SSI benefits will be lost due to accepting the money that was left to them.

Special Needs Trusts are complex and have many intricate timing details that must be followed to the letter for them to work as they were intended. Also, each family’s financial situation will determine the type of Special Needs Trust that will best meet their needs.

In order to ensure that your special needs loved one receives their rightful portion of their inheritance, you must work closely with an estate planning attorney who is familiar with all of the details surrounding Special Needs Trusts.

 

Image credit: Chris Dlugosz

Does my NJ Will Have to be Notarized?

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The laws surrounding estate planning differ from state to state regarding the signing of your will, how many witnesses must be present, and what conditions make your will complete and valid. It’s true that anyone can print up their own will – or hand write one if they prefer, but it must be in some written form to be legal. There are several qualifications a testator (person creating his or her will) must fulfill in order to execute their will without the help of an estate planning attorney:

  • 18+ years of age: In the State of New Jersey, you must be at least 18 years old in order to write your own Last Will and Testament.
  • Of sound mind: To be of sound mind means that you are able to reason and understand things on your own. You may have been found to be legally incompetent in a court of law if you’ve suffered a brain injury or other mental disability .  If you have been found to be incompetent, you likely have a guardian who was appointed by the court. That guardian can help you draft your will.
  • Two or more adult witnesses: NJ law requires that all wills be signed by the testator in front of at least two witnesses who are both 18+ years of age and are of sound mind. Your witnesses validate your will by agreeing that you are who you claim to be and that your signature is authentic. If a disability prevents you from signing your name to your will, you can authorize someone else to sign for you. This act must also be affirmed by your witnesses.
  • Signed by witnesses: Along with attesting your own signature on your will, the witnesses will also need to sign their names as official acknowledgement of your signature and their presence when you signed.

Does my New Jersey will have to be notarized?

Legally, you are not required to have your NJ will signed by a notary as long as you have met the above listed requirements. However, if you want to make the probate process significantly easier on your loved ones after you pass away, you’ll definitely want to have your will notarized. Your witnesses need to be with you when the will is notarized so that the public notary can attest to their identity.

Wills signed by a notary are considered to be ‘self-proving’ in New Jersey. A self-proving will is one that will move quickly through the probate system after the testator has passed away.

When a decedent has failed to have their will notarized, it means a whole lot of a headaches for their beneficiaries at a time when they are already undoubtedly grief-stricken and overwhelmed.

Additionally, self-made wills often have problems or omissions that lead to intense family disagreements, fighting and potential irreparable damage.

What can I do to ensure that my will is without fault, errors or omissions?

Naturally, you want to save your family members from any strife related to your will after you pass. The best and most cost-effective way to do that is to work with an estate planning attorney. Even if you are reading this page to find out how to execute your will without professional help – we’ll still tell you that your best bet, in this case, is working with an experienced NJ estate planning lawyer.

The cost of having your New Jersey will drawn up by an estate planning attorney is very affordable, especially compared to the exorbitant fees your heirs will end up paying after the fact to fix any mistakes you may make if you go the DIY route. Consultations are FREE at most estate planning firms. Take the time and invest in execute your will with a professional’s assistance. Your surviving heirs will be so thankful that you did.

Image credit: Dan Moyle