Many people do not think they need to, or do not want to, create a will or make someone aware of their final wishes. It can be hard to think about your own mortality. Avoiding estate planning, however, can result in some major details been left on thought of and add to your family’s stress during an already difficult time. In Paramus and other cities throughout the U.S., it is becoming more and more important for people to have a plan for how they would like their loved ones to handle their affairs after they have passed away.
Efficient Death Bed Gifts Help Defeat NJ Estate Tax
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.
Efficient Death Bed Gifts Help Defeat NJ Estate Tax
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.
New trend helps prevent undue stress in executing a will
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.
New trend helps prevent undue stress in executing a will
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.
Man leaves $40 million estate with no known will
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.
Stop putting off estate planning
Life is very busy for a lot of people in New Jersey and beyond. People sometimes push off important tasks for a time when things are less chaotic. However, it is never a good idea to put off estate plans.
People who receive large inheritance may be inclined to give it away
We talk frequently on this blog about the importance of estate planning and preserving wealth. People in New Jersey often spend a lot of time thinking about how their estate will be split up between family members. Some people are lucky enough to inherit a large fortune.
Loved ones benefit the most from estate plans
As we've said before on this blog, life carries with it unexpected surprises. Life is fragile and can be taken away in a moment. One woman knows this all too well after her husband was killed in a biking accident.
Don't forget the stepchildren as you make your estate plans
Family structures are much more varied than they used to be. In New Jersey and elsewhere, stepchildren may play an important role in an adult's life. Thus, they should be included in a person's estate plan.
