New Jersey Estate Administration Law Blog

One of our favorite estate planning techniques is to create a single member LLC as a vehicle to enable clients to make death bed gifts.   High basis assets are transferred to a single member LLC and the client continues to enjoy the income from the LLC assets and the ability to withdraw assets from the LLC.   We set up assignment documents so the client can make gifts of the LLC interests to his heirs by simply signing and dating the assignment documents.   Now gifts can be made up until the date of death without having to move money from a bank or brokerage account.  This saves New Jersey estate taxes - which range from 7% to 16%, depending on the size of the Estate.  The cost of setting up the LLC is very minimal, and the annual cost of maintaining the LLC is a $50 filing fee to the state.   No additional income tax returns are necessary.  You want to avoid using appreciated assets when funding the LLC, since there will be no step-up in cost basis in the LLC assets upon death.   Combined federal and state capital gains rates can be as high as 23.8% under current law.    Cash and bonds are the best candidates to fund the LLC.

Whether you are in New Jersey, or some other locality, when a loved one dies, it can be an emotional and stressful time. On top of the emotional toll, there are often a number of things that need to be handled, like arranging a funeral and settling the will. Although once you have passed on, there is not much you are able to do to assist your family and friends in coping with your death, you can take steps to ensure they have all the pertinent information to carry out your final wishes.

In order to help cut down on the chaos that is sometimes left for estate executors to sort through, many investment advisors and estate planning experts have started advising their clients to include an inventory of their bank accounts and investment portfolios with their will. According to experts, this can be very beneficial in helping one’s estate administrator to finalize your affairs and ensure the appropriate assets and funds make it to your heirs when you pass away. 

As we have mentioned in previous posts, New Jersey residents would be wise to get a head start on estate planning, regardless of their age. A recent case in New York illustrates the importance of outlining specifically how you wish your assets to be divided.

A 97-year-old man in New York recently passed away. Friends report that he was a Holocaust survivor, and he was a very successful real estate developer. Although he was previously married, he had since divorced his wife and had no children.

As the population ages, more people in Paramus County and beyond may be forced to care for their parents or other elderly relatives. Taking care of a loved one is time consuming. In addition, medical expenses can quickly drain bank accounts.

It is important for families to establish elder law plans. Having a solid plan in place can help ensure that a loved one receives proper medical care while making sure wealth is protected. After all, it is important for a lot of people to be able to pass on wealth to family members.