Save Your Estate

Combined Estate Tax Exemtion for $10mil

2011-01-05T10:11:00.003-05:00

Starting in 2011 widows and widowers can add to their own estate tax exemption the unused exemption of the spouse who died most recently. This provision, plus an increase in the exemption amount to $5 million per person, enables married couples together to transfer as much as $10 million tax-free to their children or other heirs, either by making lifetime gifts or through estate plans. This 2-year provision expires January 1, 2013

New estate Tax Rates

2010-12-19T16:26:00.000-05:00

Here is a quick summary of the new Estate Tax rates signed into law December 17, 2010

2010
Estate Tax
Exclusion amount: $5,000,000
Maximum tax rate: 35%
Carryover basis: Option to elect carryover basis instead of estate tax treatment

Gift Tax
Exclusion amount: $1,000,000 (no change)
Maximum tax rate: 35% (no change)

2011-12
Estate Tax
Exclusion amount: $5,000,000
Maximum tax rate: 35%

Gift Tax
Exclusion amount: $5,000,000
Maximum tax rate: 35% (no change)

We Hold These Truths...

2010-07-02T14:11:00.001-04:00

Thank you Founding Fathers! Please read the Declaration of Independence: http://www.taxesq.com/declaration.pdf

Death Taxes in Limbo for 2010

2010-01-11T23:42:00.002-05:00

The death tax, as many refer to the Estate Tax, was changed earlier in the decade so that in 2009 it would impose a tax rate of 45 percent to the estates of people who die with more than $3.5 million in assets. Before the law was changed — back in 2001 — the death tax had applied a tax rate up to 55 percent on estates in excess of $1 million. Now, without action on the part of Congress to set up a plan or new law for the estate tax, in 2010 there is no tax on estates of persons dying this year. In 2011, however, the law will revert back to how it existed before the 2001 law change, with a $1 million exemption and up to 55 percent tax on the deceased’s assets following a death.

Under the 2009 law, just 6,000 estates throughout the country would have had to pay the estate tax. In 2011, when all estates worth more than $1 million will be subject to the death tax, more than 61,000 estates could be affected.

Note many States "decoupled" with the Federal Estate Tax Exemption and apply a State Estate Tax usually for estates exceeding $675,000. This results in many estates dealing with State Death Taxes.

Congrss To Extend Estate tAX

2009-12-05T15:05:00.001-05:00

The House voted December 3, 2009 to permanently extend a 45 percent inheritance tax on estates larger than $3.5 million, canceling a one-year repeal of the tax set to begin next month.

A similar effort is afoot in the Senate, but the health care debate there could preclude action on the estate tax before Congress breaks later this month for holidays. There are also disagreements among senators over the tax rate and the size of estates that should be exempt, further clouding the bill's prospects.

Under the House bill, which passed by a 225-200 vote, estates smaller than $3.5 million would continue to be exempt from the tax. Married couples, with a little estate planning, could exempt a total of $7 million.

Congress Fiddling on Estate Tax Reform

2009-11-20T11:10:00.003-05:00

After 8 years of doing nothing, the House of Representatives has not reached a consensus on revising the Estate Tax. The current estate tax rate is 45 percent with an exemption level of $3.5 million for individuals and $7 million for couples. Unless something is done, in 2010 the rate and exemption level will fall to zero and then jump up to 55 percent and $1 million, respectively, in 2011.

Some Congressmen want to extend the current structure for one year. In the meantime, the taxpaying public is left to just guess.

Senate Working on Estate Tax Revision

2009-11-16T11:41:00.002-05:00

After 8 years of delay, the Senate is finally considering a revision to the Estate Tax. When the Bush estate tax reduction were passed in 2001. the Pres. Bush told Congress that 8 years would be enough time for the revision of the Internal Revenue Code Estate Tax provisions. As a method of assuring Congress would get busy, the law provides for a repel of the Estate Tax for 2010. Now, after dilly-dallying for 8 years, the Democrats don't want to see the Estate Tax Revenue disappear. They are scrambling to come up with a revision.

A bipartisan group of Senators is proposing a gradual reduction of the Estate Tax rate from 45% to 35% in 2019. Also the exemption would increase to $5 mil by 2019. Full Article....

Health Care Reform - End to Charitable Deductions?

2009-06-15T16:56:00.002-04:00

Under the guise of paying for health care "reform," President Obama is trying to eliminate charitable deductions. Aside from further damaging already hurting charities, many estate plans and lifetime giving plans need to be reviewed. If the Obama plan gets approved, many proposed charitable deductions will need to be reduced to pay the federal (and State) income and estate taxes.

Estate Tax is Back Again!

2009-05-24T21:01:00.002-04:00

Estate Tax is Back Again!

The House and Senate each approved a Fiscal 2010 Budget Resolution which keeps the Federal Estate Tax into 2010. President Bush and Congress set-up Estate Tax Reduction in 2001 with a planned elimination in of the estate tax  on January 1, 2010 THE house and Senate passed budget resolutions that conforms with President Obama's goal of re-instituting the Estate Tax.  The estate tax exemption amount will be frozen at  $3.5 million for single taxpayers and $7 million for married couples – the same rule that applies in 2009 under the Bush legislation. In addition, the Obama Administration has called for indexing the exemption amounts for inflation beginning in 2010. Congress must actually pass legislation to enact the tax changes.click here

Report Foreign Accounts or Face Fine and Jail

2008-06-23T21:16:00.003-04:00

Report Foreign Accounts or Face Fine and Jail

U.S. citizens and permanent residents who have bank and other financial accounts in a foreign country may be required to report those accounts to the U.S. Department of Treasury by June 30. The failure to report these accounts can result in a $10,000 fine per account and possible criminal penalties.

The government forces US citizens to file the report each year if they have a financial interest in or signature authority or other authority over any financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.

Courier Post - Ron Paul Letter

2008-01-08T16:49:00.001-05:00

The Courier Post published my commentary about Ron Paul:

Saturday, January 5, 2008

Re: "Republican Ron Paul offers a different choice and new ideas" (Perspectives, Dec. 28).

U.S. Rep. Ron Paul, R-Texas, is the only candidate running who actually represents the America of our founding fathers. He promotes more individual choice, the right for you to control your life, not the government controlling you and taxing you into penury.

Let's stop the "yes, but" Republicans and the "tax-and-spend" Democrats from overriding the Constitution in the name of "patriotism" or some favored social program. Paul represents a new freedom for all Americans from an overbearing federal government.

That is why I am voting for Ron Paul in the Republican Primary. Thank you.

RONALD J. CAPPUCCIO

Cherry Hill

Click Here for the full article.

New Jersey Ends Death Penalty!

2007-12-14T09:19:00.000-05:00

New Jersey Ends Death Penalty!

The State of New Jersey Assembly and Senate approved the abolition of the Death Penalty on December 13, 2007. The Governor promises to sign it into law. It's about time!

Ron Cappuccio

2007-12-13T09:12:00.001-05:00

The Best Way to Save Your Estate is Vote for Ron Paul in the Primaries:

Here is a video of Ron Paul Summarizing some of his positions:

Click Here...

Remember to Contribute to Dr. Paul's Campaign onm December 16, 2007

Click Here...

Why I Support Ron Paul For President

2007-12-12T17:19:00.000-05:00

Why I Support Ron Paul for President

Taxes
First, Ron Paul is the only limited government, lower taxes candidate. He has never voted to increase taxes and desires to cut government spending and taxes needed to support the spending. You cannot increase government (whether it is "infrastructure" as used by the Big Spenders, or transfer payments and subsidies,) and expect to lower taxes.

Free Trade
Ron Paul supports real free trade not more governmental organizations such as NAFTA, GATT, CAFTA, etc. Free trade is simple... we won't tax imports and other countries do not tax our exports.

War and Foriegn Policy
The war in Iraq was sold to us with false information. The area is more dangerous now than when we entered it. We destroyed a regime hated by our direct enemies, the jihadists, and created thousands of new recruits for them. We have no business making "regime changes" and trying to knock down or prop up other governments. We are not and can never be the policemen of the world.

Personal Liberty
The biggest threat to personal liberty is the government. We must limit the ability of the government to collect and store data about citizens' personal matters. Every government agency restricts individual choice. We need to cut back on government and increase personal freedom. The Constitution has a very limited role for the Federal government. Washington has no business being involved with education, abortion, religion, race relations, housing, etc. These are the rights left to the individuals and the states.

Yes, Ron Paul CAN WIN
The so-called "practical" political commentators say that Ron Paul can't win so we should unite behind a "winner" even if we do not support their views. This is the old "unite for unity" trap and is akin to Machiavelli's "the end justifies the means" argument. Let's vote for the best person...Ron Paul for President in 2008!

Ronald J. Cappuccio

Click Here to contribute to Ron Paul's Campaign

College tuition deduction.

2007-03-17T00:05:00.000-04:00

College tuition deduction.

You might be able to deduct qualified higher education expenses of up to $2,000 or $4,000 (depending on your income) paid on behalf of yourself, your spouse, or a dependent. The write-off is taken as an adjustment to income, which means taxpayers can claim it even if they do not itemize deductions. It can be advantageous for those who earn too much to claim the HOPE or Lifetime Learning tax credits because the income limits are higher. Previously set to expire, the Tax Relief and Health Care Act of 2006 extends this deduction through December 31, 2007.

529 Plans are Good Tax Investment

2006-12-17T23:09:00.000-05:00

Section 529 Plans Can Provide Tax-Smart Learning for Kids and Adults

Contributing to a Section 529 Plan before year end on behalf of children or grandchildren can be a wise idea. But have you ever thought about

one of these tax-favored accounts for yourself — to pay for post-secondary courses you might want to take in the future?
Adults can open up Section 529 plans (also called Qualified Tuition Programs) and make themselves the beneficiaries. The plans allow you to put money in a state plan for tuition, fees, books, supplies, and equipment that are required to attend an eligible educational institution.
What's an eligible school? "It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions," according to the IRS.
That means you can generally use withdrawals to study for a second career, go to graduate school, or do coursework in retirement.
Section 529 advantages include:
Your account grows tax-free and withdrawals are not federally taxed when used for eligible education expenses.
Many states allow income-tax deductions (up to different annual maximums) for contributions to the state’s plan — and some don’t tax withdrawals.
There are no income limitations and you can put a substantial amount into a plan at one time.
What if you don't use the money? You can change the beneficiary to a family member or leave the account alone and let it become part of your estate. Another option is to withdraw the money. However, the earnings will be subject to federal (and any state) taxes, as well as a 10 percent penalty. (The penalty doesn't apply to the principal.)

Make a Last-Minute Swap of Munis

You might want to arrange a municipal bond “swap” to reduce your 2006 tax liability.
In reality, a bond swap is the simultaneous sale of one bond and purchase of another issue. Typically, you may sell a bond that's showing a loss and acquire a bond with similar investment characteristics. When the swap is complete, you're essentially in the same investment position as you were before the exchange took place.
Tax difference: Now you have a current loss that you can deduct on your 2006 tax return. And if the bond you acquire in the swap has higher interest, so much the better.
More muni bonds are usually available for exchange at year-end than corporate bonds. But the marketplace can be thin, so move quickly.
Example: Suppose you own an Apple City muni purchased years ago for $10,000. The bond's current value is $8,000. It will mature in 18 years and has a 4.5 percent interest rate. Currently, you're showing a net $2,000 gain in capital gain transactions. So you swap your Apple City bond for an Orange City muni.
The Orange City bond also has a face value of $10,000 and a current value of $8,000. However, as opposed to the Apple City bond, it matures in 20 years and has a coupon rate of 5 percent.
Benefits: The $2,000 loss from the sale part of the swap eliminates your capital gains tax for the year. Next, you get a small increase in annual income. Instead of earning $450 of tax‑free interest each year, you are entitled to receive $500 tax‑free.
Caution: Under the “wash sale” rule, you cannot realize a tax loss from a security sale if you reacquire a substantially identical security within 30 days. To avoid this, consider swapping bonds of different issuers. Or if the bonds come from the same issuer, make sure there's a significant difference in the maturity dates and interest rates

Disclaimer of Inheritance

2006-12-03T11:42:00.000-05:00

Disclaimer of Inheritance
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Question:
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Category: Probate, Trusts, Wills & Estates
Location: SD
Subject: Inheritance

Is it possible for a person to decline an inheritance if they are named in a will?

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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: SD
Subject: Re: Inheritance

An inheritance may be "disclaimed"within 9 months of the date of death. The disclaimer has to be in writing and directed to the executor. If the disclaimer is made after 9 months, it will be considered a gift to the ultimate beneficiary.

For more estate issues, please check my web site www.saveyourestate.com

I hope this helps!

Ron Cappuccio

Asset Protection Failure - Man Jailed until He pays Creditors

2006-11-30T21:15:00.000-05:00

Asset Protection Failure - Man Jailed until He pays Creditors

11-30-2006 -The unprecedented length of disgraced financier Martin Armstrong's confinement for civil contempt did not violate the law, the 2nd U.S. Circuit Court of Appeals ruled Monday.

Addressing several novel issues of law, the circuit upheld the decision of Southern District of New York Judge Richard Owen to keep Armstrong behind bars until he obeyed a court order to turn over millions of dollars in valuables sought by a receiver overseeing the assets left over from the implosion of Armstrong's Princeton companies.

NJ Supreme Court Rules for Gay Marriage

2006-10-27T23:07:00.000-04:00

The New Jersey Supreme Court on October 25 held in a 4-3 decision that the state’s constitution requires that same-sex couples be granted the same legal rights as married heterosexual couples. However, the dissenters argued the majority didn’t go far enough in vindicating the rights of same-sex couples. Lewis v. Harris, No. A-68-05 (Oct. 25).

"Denying committed same-sex couples the financial and social benefits and privileges given to their married heterosexual counterparts bears no substantial relationship to a legitimate governmental purpose," said the majority in Lewis, brought by seven same-sex couples. "The court holds that under the equal protection guarantee ... of the New Jersey constitution, committed same-sex couples must be afforded on equal terms the same rights and benefits enjoyed by opposite-sex couples under the civil marriage statutes."

The court declined to label those rights as marriage, instead ordering the state legislature to amend its marriage statutes or enact a new law granting the state’s 16,000 same-sex couples the rights of married couples within 180 days. "The name to be given to the statutory scheme that provides full rights and benefits to same-sex couples, whether marriage or some other term, is a matter left to the democratic process," the court stated.

Should Registered Domestic Partners file Joint Returns?

2006-02-26T21:53:00.000-05:00

Should Registered Domestic Partners file Joint Returns?

Several States, including California, are permitting couples to register as domestic partners. The issue is whether the are treated as "married" under the Internal Revnue Code. The Internal Revenue Service is still grappling with the issue, which is likely to have national ramifications.

The thorniest issue centers on the basic question of how to report income on a federal tax return. For example, if one partner earns $100,000 but a stay-at-home partner earns nothing, are they now entitled to report $50,000 of income on their individual returns? If the stay-home partner's $50,000 share isn't considered income, is it a taxable gift -- or something else?

Domestic partners can't assume they'll be safe simply reporting income separately, the way they did before the state law took effect, some experts say. If the IRS decides to treat domestic partners more like married couples, some could find out later that they owe taxes because they weren't entitled to tax breaks they claimed.

New Law Restricts Medicaid Planning

2006-02-06T09:22:00.000-05:00

On February 1st Congress passed the Deficit Reduction Act of 2005, intended to severely limit the ability of seniors to protect their assets and qualify for Medicaid coverage of their nursing home care. It significantly changes rules on transfers of assets, protection of homes, and the use of annuities.

The new law extends Medicaid's "lookback" period for all asset transfers from three to five years and makes those with valuable houses ineligible for Medicaid long-term care coverage. But the most significant change is that it also shifts the start of the penalty period for transferred assets from the date of transfer, as is the case now, to the date when the individual would qualify for Medicaid coverage of nursing home care if not for the transfer. In other words, the penalty period would not begin until the nursing home resident was out of funds, meaning there would be no money to pay the nursing home for however long the penalty period lasts. Innocent gifts to grandchildren could, years later, result in extended periods without any long-term care coverage of any kind

Power of Attorney when Incompetent

2005-11-05T21:26:00.000-05:00

===========Question: ===========1. If there are multiple names on checking accounts, bank statements, CD's, etc. and one of those parties is not a functioning party, can the state take that part of their money if that party needed the state to take care of them?2. How can I get Power of Attorney and what is the criteria?

===========Reply: ===========A Power of Attorney can only be created by a person who is mentally competent. Nevertheless, since you indicated the accounts are in joint names, if each party has the right to withdraw funds without the signature of the other, you could withdraw the funds. Whether the State or some other party may make claims is a different issue. Therefore, if you withdraw the funds, place them into a separate accont in your own name so they are available if a dispute arises. You will probably need the help of a good lawyer.

I you have further questions, please check my website at www.saveyourestate.comI hope this helps!

Ron Cappuccio

Same-Sex Partners Both have Parental Responsibility

2005-08-26T20:55:00.000-04:00

The California Supreme Court ruled this week that both partners in a lesbian relationship may qualify under state law as parents of a child born to one of them.

"We conclude that a woman who agreed to raise her children with her lesbian partner, supported her partner’s artificial insemination using an anonymous donor, and received the resulting twin children into her home and held them out as her own, is the children’s parent under the Uniform Parentage Act and has an obligation to support them," Justice Carlos Moreno wrote in the court’s opinion.Please see Elisa B. v. the Superior Court of El Dorado County

Divorce Rate Declines because more couples are "Living Together."

2005-08-16T09:32:00.000-04:00

More Americans are taking "til death do us part" seriously. According to the recently released Rutgers University National Marriage Project the number of divorces is declining. But the lower divorce rate is largely because couples are postponing, choosing not to, or are legally unable to get married. Like Oprah Winfrey and Stedman Graham, and Elton John and David Furnish, these 11 million unmarried couples are in committed relationships and sharing financial obligations, but aren't entitled to the 1,140 federal laws that apply to married couples.

More importantly, State laws concerning property rights, inheritance and even hospital visitations do not protect unmarried partners. Therefore, it is urgent that couples living together prepare estate plans (Will, Trust, Durable Power of Attorney,) Medical Power of Attorney and burial instructions. For the complete article click here.

See http://www.saveyourestate.com/

Tax Basis When Selling Property received as a Gift

2005-07-24T22:00:00.000-04:00

Question: Selling gifted property.
20 years ago I received a portion of recreational land as a gift from a relative. Now I am ready to sell. The property has greatly appreciated. What are the tax implications? How do I compute cost basis?

Reply: Because you received a gift, your basis in the property for tax purposes is a "carryover" basis from the grantor. Essentially, whatever the grantor paid for the property, any improvements, and any gift taxes paid would increase your basis. Since it is land only, there would not have been depreciation. You would be subject to Capital Gains Tax rates and possibly the Alternative Minimum Tax.

The Problem with Joint Accounts

2005-06-06T22:43:00.000-04:00

Question: Before my grandmother passed away she had several bank accounts w/ her name in trust to me but noone knew about them. She had a stroke and could not speak for herself and my grandfather felt the accounts should be combined, put in his name in trust to me. We went to the bank, did the paperwork and it was never mentioned since. A few years ago he made a will leaving everything to me. 11/2 yrs ago he remarried. He has been very ill & he made a new will recently leaving everything to his new wife. I asked about the account that was in trust to me & he said everything is being left to her. The whole family knows he is doing this so she won't leave him while he's sick but what are my rights? Also, does it matter this was not my (blood) related grandfather? Although he was married to my grandmother before I was born & I lived w/ them a good part of my life. Thank you

Reply: It is a shame your Grandmother did not have an estate plan. If she had left he bank acounts in a real trust for you, your grandfather would not have been able to take them and transfer them to his new wife. It is a shame when then intent of one parent or grandparent gets defeated and the inheritance ends up in the hands of the new spouse.Good luck!Ronald J. Cappuccio, J.D., LL.M.(Tax)

Death Taxes on IRA's

2005-06-06T22:41:00.000-04:00

Question: Hi,my mom will inherit approximatly 500k from her sister's estate. Some funds are in IRA accounts, i understand the inheritence tax is 11% after the first 25k. My questions...are the retirement funds subject to inheritence tax? Are there any exemptions or deductions? Thanks, Karl

Reply: Not only are the IRA's subject to NJ Inheritance tax, they are also subject to US and NJ Income tax. If your Mom is in a high income tax bracket, the combined State and Federal Rate can exceed 40%. Try to have your Aunt see a good estate tax lawyer right away!I hope this helps.Ronald J. Cappuccio, J.D., LL.M.(Tax)

Will Estate Taxes Be Repealed?

2005-04-13T22:35:00.000-04:00

Next week, Congress resumes debate over whether it should permanently repeal the estate tax imposed when people die and leave their assets to their heirs. In 2001, Congress voted to reduce the tax until it is eliminated in 2010. But it is set to return in 2011 to a maximum 55% rate with an exemption on the first $1 million of the estate. House and Senate members have proposed bills for permanent repeal, and House members could take action as early as next week. Many groups, lead by Non-profit organizations and the tax and spend politicians and big government think tanks, are trying to reinstate the full estate tax and prevent the ultimate repeal. Please see the full article.

IRA's protected from Bankrupt's Creditors

2005-04-04T22:07:00.000-04:00

In a unanimous decision, Rousey v. Jacoway, the Supreme Court held that creditors may not reach IRAs for petitioners who file bankruptcy. This means IRA's are treated the same as other pension type plans for Bankruptcy purposes. As a basis for its decision, the US Supreme Court relies upon the access restriction to IRA assets under federal law. Specifically, the Court looks at the 10 percent excise tax penalty for premature withdraws prior to age 59 1/2 to say that, while the assets in the IRA are vested, the penalty is sufficiently draconian that the full value of the assets contained in the IRA is only available "on account of age" so it is excludable from the bankruptcy estate under 11 USC 522(d)(10)(E).

Claiming a Parent as a Tax Dependent

2005-04-04T10:08:00.000-04:00

If you are caring for your mother or father, you may be able to claim your parent as a dependent on your income taxes. This would allow you to get an exemption (currently $3,100) for him or her.

There are five tests to determine whether you can claim a parent as a dependent:

The person you are claiming as a dependent must be related to you. This shouldn’t be a problem if you are claiming a parent (in-laws are also allowed). Keep in mind, however, that foster parents do not count as a relative. To claim a foster parent, he or she must live with you for a year as a member of your household.

Your parent must be a citizen or resident of the United States or a resident of Canada or Mexico.

Your parent must not file a joint return. If your parent is married, he or she must file separately. There is an exception if your parent is filing jointly, but has no tax liability. If your parent files a joint tax return solely to get a refund, you can claim him or her as a dependent.

Your parent must not have a gross income of $3,100 a year or more. Gross income does not include Social Security payments or other tax-exempt income.

You must provide more than half of the support for your parent during the year. Support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Even if you do not pay more than half your parent’s total support for the year, you may still be able to claim your parent as a dependent if you pay more than 10 percent of your parent’s support for the year, and, with others, collectively contribute to more than half of your parent's support. To receive the exemption, all those supporting your parent must agree on and sign the applicable Multiple Support Declaration (Form 2021).
If you cannot claim your parent as a dependent because he or she filed a joint tax return or has a gross income above $3,100 but you have been paying your parent’s medical expenses, you may be able to deduct those expenses from your taxes.

My Mother Died without a Will

2005-03-09T20:52:00.000-05:00

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Question:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: My Mother Died without a Will

My Mom died in 2003 w/o a will. My siblings appointed me administrator, i am one of 9. The only property to be divided is the house. which comes with it's on set of problems,their is not a clear title. There are leins against the property, we were able to get $90,00 cleared with just a few thousand left.My husband and I would like to buy the property, we had it appraised and are able to pay cash to each of my siblings. 6 of us have signed QuitClaim Deeds.There are 3 hold outs (emotional hold outs)They feel my sister should have the house. she has no $ and can't get a mortage. I belive that my job is to settle it fairly 1/9 split is fair. It has been 20 months since my mom died and now the homeowners insurance is a problem, we have been dropped by the co. we were with for 30years. i found another co. for double the cost and short term,we must have a buyer soon.No company wants to insure an estate. Can I as administrator settle this estate w/o all 9 in agreement? My plan is to go to settlement and have the $ for the three hold outs put in an escrow account. Can I do this? I am out of time, and at wits end. I would greatly appreciate any help you can give me.
Eileen

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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Re: My Mother Died without a Will

Unfortunately, this is the type of matter that will end up in court. When it comes to money, formerly friendly family members frequently fight and argue. Although the estate is small, you have not choice but to hire a good estate lawyer that understands these types of disputes.

You will need to institute a suit in the Chancery Division, Probate Part of the Superior Court asking to approve the sale and the accounting of the estate. Please see my web site www.SaveYourEstate.com for further information.

I hope this helps!

Ron Cappuccio

Capital Gains on Sale of Home

2005-01-31T22:26:00.000-05:00

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Question:
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Category: Tax and Taxation Law
Location: FL
Subject: Capital Gains

We are planning on selling our home that we've lived in for 7 yrs. At the moment, we do not have plans on purchasing a new one. Is there a way we can defer the capital gains taxes on the proceeds we get from selling? We owed approx. $88K and will sell for around $150K.

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Reply:
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Category: Tax and Taxation Law
Location: FL
Subject: Re: Capital Gains

Since the home has been your principal residence for more than two years, and the gain is less than $500,000, you will not pay any federal income tax on the gain.

For further tax planning information, see my web site at:

http://www.saveyourestate.com/

I hope this helps!

Are Insurance Proceeds subject to decedent's creditors?

2005-01-25T21:37:00.000-05:00

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Question:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: intestate

When a person dies intestate and owes money, is insurance subject to garnishment. There was a salary garnishment in place at the time of death.

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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Re: intestate

If the insurance policy names a specific beneficiary, other than the estate, the policy proceeds pass outside of the estate. Therefore, the creditor would not have a claim against the named beneficiary. If there is not a named beneficiary, or if the estate is named as a beneficiary, the creditor could have a claim against the policy proceeds in the estate.

My website contains other estate administration information: http://www.taxesq.com/

I hope this helps!

Is a Power of Attorney Valid after death of the Grantor

2005-01-22T16:54:00.000-05:00

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Question:
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Category: Probate, Trusts, Wills & Estates
Location: NY
Subject: Power Of Attorney

When a person has power of attorney can they sign the name of the person they have power of attorney for on legal documents? For example lets say Mary has POA over her mother Sue. They have joint bank accounts so Mary can pay her mom's bills but all the money in the accounts belongs to Sue. Mary does not contribute any money to these accouts. Can Mary sign Sue's name on a bank document having Sue's name removed from these accounts so that the accounts now belong to Mary? Now that Mary has passed away is the signing of these documents considered forgery?

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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: NY
Subject: Re: Power Of Attorney

Here are my answers:

When a person has power of attorney can they sign the name of the person they have power of attorney for on legal documents?

Ans: Not exactly. Sue would sign "Mary XXX, Attorney In Fact for Sue XXX."

For example lets say Mary has POA over her mother Sue. They have joint bank accounts so Mary can pay her mom's bills but all the money in the accounts belongs to Sue. Mary does not contribute any money to these accouts. Can Mary sign Sue's name on a bank document having Sue's name removed from these accounts so that the accounts now belong to Mary?

Ans: It depends on the language of the Power of Attorney document. If the language specifically permits Mary to make gifts to herself on behalf of Sue, then she would have the authority. Otherwise, the power to make a self-gift is not normally in a Power of Attorney.

Now that Mary has passed away is the signing of these documents considered forgery?

Ans: The Power of Attorney expires at death of the grantor of the power (in this case Sue.) Mary does not have the legal authority, but to call it "forgery" seems an overstatement.

The reality is this sounds like a sibling dispute that would best be handled by discussions rather than litigation and charges.

Please check my web sites http://www.taxesq.com/ and http://www.saveyourestate.com/ for mor help.

Ron Cappuccio

Sibling Dispute over father's Will

2005-01-20T23:18:00.000-05:00

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Question:
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Six siblings and myself are disagreeing on the distribution of remaining items not specified in my father's will. There is a varied interpretation of verbal statements my father made while still alive regarding these items, ie ''xxx can work on the boat'' is believed to be that he is to be given it. My position is that if it is not in the will, the items are to be appraised and sold, or compensation given for shares. Does the executrix have the power to distribute property based on verbal statements passed on by other members of the estate?

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Reply:
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Family disputes over inheritances are very disturbing and are an endless source of family strife. Unfortunately, it appears that your father's Will did not clearly reflect his intention. The Executor must follow the language of the will not a verbal intention. Nevertheless, the boat does not necessarily have to be sold. It could be distributed to one or more of your siblings in lieu of their portion of the estate. My suggestion is that you try to reach a consensus with your family. In the long run family relations are far more important than the money in dispute.

I hope this helps!

What if Beneficiary dies first?

2005-01-19T21:56:00.000-05:00

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Question:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Inheritance

If a sister is named as a benificiary in her brothers will,but dies before he does.Does her spouse or her children inherit her share of the will?

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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Re: Inheritance

The language of the Will controls what happens to the disposition.Your lawyer would need to look at the actual language to make a determination. If the Will says "to my sister, xxxx." then it typically would go to her estate. If the will says, "to my sister, xxxx, per stirpes." then the disposition would be to her children. This would also hold true for "to my brother, yyy and sister, xxxx, per stirpes." If the Will says "to my brother yyy and sister xxxx, per capita." then her brother would receive the disposition.
As you can see this is complicated, and you really need to consult a lawyer. I have some information about probate on my website http://www.taxesq.com/ and also on http://www.saveyourestate.com/
I hope this helps!

NJ Restrictions against Medicaid Annuities held Invalid

2005-01-15T22:28:00.000-05:00

The New Jersey Appellate Division held that a Medicaid annuity should not be counted towards a patient's economic resources in determining Medicaid eligibility. In Estate of F.K. vs. Division the Court held using immediate annuities as an asset protection tool is permitted under federal law and invalidating New Jersey's Medicaid regulations prohibiting such annuities.

In the FK case, the husband entered a nursing home while suffering from Alzheimer's disease. His wife bought an irrevocable, non-assignable immediate annuity for $274,000 tied to the wife's life expectancy. The monthly income from the annuity was payable to the wife. Under federal law, the purchase of the immediate annuity made the husband eligible for Medicaid to cover his nursing home costs. The New Jersey agency denied Medicaid coverage by considering the annuity as the husband's assets. The Court overturned the agency and granted Medicaid eligibility.

Supreme Court Address Gay Adoption Rights

2005-01-07T09:59:00.000-05:00

Gay rights are back on the U.S. Supreme Court's agenda. If the justices grant review, the gay adoption case will give the Court its first chance to comment on the scope of its 2003 Lawrence v. Texas ruling, which announced due process and privacy rights for homosexuals. The 11th Circuit narrowly applied Lawrence in 2004, when it upheld a Florida law excluding gay people from eligibility as adoptive parents.
For full article:
http://www.law.com/jsp/article.jsp?id=1104759344046

Is it a good idea to gift a primary residence to children?

2005-01-06T22:12:00.000-05:00

QUESTION:
Category: Tax and Taxation Law
Location: TN
Subject: Put home in children's name

I am elderly and want to put my home in my children's name so that if I have to go into a nursing home they will not take my home away from my family. Will my children have to pay taxes when the home is put in their names? It will be stated on paper that I can life in the home the rest of my life. I know people in NY that did this and did not have to pay taxes. Is there a different in state laws.

ANSWER:

Do not put the home into your children's name until you consult with an Estate Planning lawyer! The transfer is a gift which may be taxable. Also, you will lose the $250k exemption for the sale of a personal residence. Finally, the transfer may make you ineligible for medicaid for several years.

Validity of a Power of Attorney

2005-01-06T22:06:00.000-05:00

Question:
Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: POA - only for family or for state

I was appointed as Durable POA for my father, as he is terminally ill. I moved in to my father's home to take care of him. I, my brother (who will be executor) and sister agreed this was the best for Dad, and all approved my ''appointment'' as POA. Sorting through Dad's financial affairs (he has no debt)I found a paper in Dad's handwriting describing his intent of consolidating annuities, giving gifts, etc., and ''rearranging'' benificiary status of family as Mom passed away last January. After showing the appropriate banks my POA papers, I have done all Dad's intentions. Now my brother is afraid of legal backlash as he accuses me of overstepping my authority - even though he wrote the POA from a computer program. Are the POA docs just for family protection of assets or for state probate scrutiny?

ANSWER:

YOU NEED A LAWYER NOW! Unfortunately, in a vain attempt to save a few dollars in legal fees, you may have an invalid or inappropriate Power of Attorney. Estate Plans are not simply copying "form" documents. They need to be custom crafted for each particular situation. You need immediate legal help to analyze whether you have exceeded your authority!Good Luck!

Starting a Divorce - Change your Estate Plan

2005-01-03T22:45:00.000-05:00

I just saw the HBO movie The Life of Peter Sellers. At the end of the movie, it mentioned that Seller's was divorcing his 4th wife, but because he did not change his will, she inherited his millions, and his children were practically disinherited.

Have you checked your estate plan?

What to do when Parent Dies without a Will

2004-11-29T21:47:00.000-05:00

Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Power of Attorney

My father passed away without a will and without any one given power of attorney. My siblings are in agreement as to who should be given power of attorney in handling my father's estate which consists of a life insurance policy and a house in Villas, New Jersey, I would like to know can this be accomplished by way of obtaining any forms and filing them with the state, because the insurance company that my father had home owners insurance with will not divulge any information pertaining to the policy and we are trying to determine if he had mortgage insurance so we can better determine what we can do about the house.

Thank you,

REPLY:
Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Re: Power of Attorney

Once a person has died, a Power of Attorney is no longer effective. You need to get the estate Administered by making an application with the Surrogate's Court. A waiver will need to be signed by each potential Administrator. Once the Letters of Administration have been granted by the Surrogate, you can present the Certificate to the Insurance Company, Mortgage Company, and Banks to get the money available in the accounts. I would be happy to assist you if you have further questions.
Ron Cappuccio www.saveyourestate.com
856 665-2121

What Happens if my Partner Dies Without a Will?

2004-11-23T21:46:00.000-05:00

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Question: http://www.lawguru.com/cgi/bbs/mesg.cgi?i=617015055
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: significant other died intestate

a few weeks ago, my significant other/cohabitant of 13 years died unexpectedly. there is no will known, however, his intentions and wishes were made clear to his brother, employer and friends--these being that he intended to write a will where his son would receive $1 and i the rest of the estate. this one adult son whom he essentially disowned years ago was already looking for 'his due'before the body was cold. it has been suggested to me that i have a chance under 'palimony' since nj doesn't recognize common law--is there any validity here?? thank you.

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Reply: http://www.lawguru.com/cgi/bbs/mesg.cgi?i=634613038
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Re: significant other died intestate

I am sorry for your loss. Unfortunately, the failure of your partner to have an appropriate estate plan has left you without many options. A Will and Trust could have assured that your partner's wishes were carried out. You should check with a lawyer, but keep your expectations low. If you or any friends in similar relatinships have an opportunity to plan, legal advice should be obtained immediately. Please see my website http://www.saveyourestate.com

Welcome!

2004-11-23T21:42:00.000-05:00

Welcome to our new Blog. Please also check our main Blog at http://www.taxesq.com