Why New Jersey’s “Death Tax” Could Soon Die

Compared to other places in the country, New Jersey’s estate tax is kind of a killer.


In fact, ours is one of only two states still assessing not only an estate tax on the deceased person’s assets but also an inheritance tax on some of the people who benefit from those assets. Meanwhile, most other states have eliminated the death tax altogether.

The Garden State has always had reputation for aggressive taxation on the dead and their loved ones. Even among those states that do still have their own estate tax, New Jersey offers the fewest number of exemptions.

New Jersey simply isn’t a prudent place to die (financially speaking, at least). But lawmakers are looking to change that.

USA Today reports that more than a half-dozen proposals are already on their way to the state legislature, and at least one of them has a decent chance of passing (though it may come tethered to a gas-tax hike). Financial planners across the state are celebrating that as a step in the right direction, and most New Jersey residents say they’re in favor too.

Of course, nothing’s set in stone yet, and until it is, you should make sure that your estate plan protects your family should you happen to pass away before there’s a meaningful change in the law.

And if the tax does change in the future — whether it’s merely minimized or altogether wiped out (there are proposals in place for both) — it will only open the door for increased tax savings opportunities.

In most other states, the estate tax is at most an afterthought for all but the wealthiest of families. Instead, estate plans have emerged as important mechanisms for asset protection and tax savings in other areas. That could soon be the case here in New Jersey too.

In the meantime, should you need assistance with estate planning in New Jersey, Medina Law Group can help. Give us a call to learn more about your options.

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Rutgers Launches a Hotline to Help Dementia Caregivers in New Jersey

Life as a caregiver is tough — especially if you aren’t being paid for it.

Studies show that the majority of America’s healthcare providers are gratuitous. That means they are uncompensated volunteers, usually family members, who assume the tremendous burden of elder care on their own.

Caring for any senior is challenging, but when the recipient suffers from Alzheimer’s or dementia, the difficulty is almost incomprehensible for anyone who hasn’t experienced it.

Fortunately, MyCentralJersey.com reports that a new resource is here to lighten the load for gratuitous dementia caregivers in New Jersey.

Care2Caregivers is a brand-new helpline for people whose loved ones suffer from dementia. It’s operated by Rutgers University Behavioral Health Care and funded by the New Jersey Department of Human Services. The service just launched in August 2014 and has already helped thousands of people in The Garden State.

When you call Care2Caregivers, the person picking up the phone will have had professional experience in providing care for dementia patients in the past. They offer advice on managing behavior, locating resources, and overcoming challenges. Sometimes they simply lend an open ear or a message of reassurance — a welcome relief for the emotionally overwhelmed.

The calls are confidential and, if you wish, anonymous. They’ve proven very popular so far. Those interested can receive follow-up calls or even get information about local support groups.

It’s great to see an initiative unfold with the potential to make a real and meaningful difference in the lives of New Jersey’s dementia patients and their families. We know how hard care giving can be, so we hope you’ll make the most of this great new resource should you ever need it.

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Revocable vs. Irrevocable Trusts

Often clients come into my office asking what is the difference between a revocable and irrevocable trust. It seems simple – one is changeable and one is not, right? Well, not so fast. 


Let’s start with the easy one — Revocable Trust. A revocable trust is precisely what it says it is – a trust that is revocable, changeable, amendable. You can create it, you can destroy it, you can change it, you can keep it the same until you die. One thing a revocable trust doesn’t do, ever, is protect assets. It will not protect assets from estate taxes or Medicaid spend down.  Even with that disadvantage, there are plenty of good uses for revocable trusts, such as:

  • Probate avoidance (especially useful if you have real property in two or more states)
  • Maximizing estate tax exemption use (helpful in New Jersey where the estate tax threshold is just $675,000)
  • Protecting your children’s inheritance from divorce or bankruptcy
  • Keeping assets in a bloodline (and away from in-laws, future spouses, or step-children)
  • Planning for beneficiaries with special needs

With a revocable trust, clients set them up with their own money and control them (as trustees) for their lives. Then they choose who is in charge after they both die (if married), and where the money and property go.  

So, if a revocable trust is a trust you can change whenever you want, it would follow, then, that an irrevocable trust is one that you cannot change…except that’s not the case. You see, in drafting an irrevocable trust I can reserve certain powers for the grantors (my clients) to allow them to make certain changes during their lifetime. What kind of changes do my clients want to make?

  • Changing Trustees – Clients may want to reserve the right to make changes to who is in charge of their irrevocable trust during their lifetime. While there are some limitations on who they can select to serve as replacements, generally clients are able to make changes to the trustees to continue to serve the goals the planning set out to achieve.
  • Changing Beneficiaries – Clients often want to hold onto the right to choose who gets their money after they die…right up until the time that they die. From inside an irrevocable trust, clients can gain flexibility over where assets go and how their beneficiaries get it.
  • Saving Money On Capital Gains – One of the most important assets we can help protect is the family home. One way to protect it is to transfer ownership into an irrevocable trust. However, using the wrong kind of irrevocable trust can cause hundreds of thousands of dollars of value to be subject to capital gains if clients decide later to sell that home. With the right kind of language in the trust, we can preserve our client’s choice to sell the home later in life and still receive the preferential tax treatment they had while the home was still in their name. 

There are many uses for irrevocable trusts, whether protecting assets against long-term care costs, perhaps saving on estate taxes, or shielding assets against liability. These irrevocable trusts do not use the same language and they are not interchangeable. Choosing between them, and the ways we can let clients change them in the future, is where engaging an attorney is essential.

As you can see, the difference between an irrevocable and revocable trust is not so clear-cut. Many times we can achieve a lot of the advantages of a revocable trust with the added benefits of asset protection from inside of an irrevocable trust. This kind of sophisticated planning is benefit our clients enjoy from our focus in this area of law.

Posted by Victor J. Medina

Medina Law Group, LLC

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Elder Financial Abuse Often Goes Unnoticed

If it can happen to Mickey Rooney, it can happen to anyone.mickeyrooney

Elder financial abuse is a real and growing epidemic in the United States, hard as that is to imagine. Unfortunately, we live in a society that too often looks at the elderly as “less than.” Unscrupulous adults who are hard pressed for cash can take advantage of older people and sponge up their assets before loved ones realize what’s happening.

Iconic actor Mickey Rooney was among the most famous victims of elder abuse — both physical and financial (the two may go hand in hand) — and the perpetrators were his own flesh and blood, as is so often the case.

Unfortunately, elder financial abuse is difficult to detect before it’s too late. In an effort to change that, CBS News recently ran a report on the most common signs of financial elder abuse. They include:

  • New “best friends”
  • Sudden obsession with an online acquaintance or lover
  • Unpaid bills, collection letters, or eviction notices
  • Disconnected utilities
  • Large, unexplained transfers or withdrawals
  • Recent estate documents, including powers of attorney, entrusted to suspicious parties
  • Missing property / assets / cash
  • Bank statements stop arriving in the mail
  • Outlandish stories about where all the money has gone
  • Suspicious signatures on checks
  • Caregivers begin to ask suspiciously probing questions about finances
  • Lots of money being spent on “care giving” but little to show for it

The National Committee for the Prevention for Elder Abuse, which proffered those tips to CBS, stresses that any of these observations might have more innocent explanations. But if something seems off, concerned loved ones should thoroughly investigate.

Elder financial abuse thrives on assumption, secrecy, and trust. Don’t let someone you love be taken advantage of by someone with selfish motives.

If you need help or have questions about your rights, don’t hesitate to call our New Jersey elder law attorney. We’re here to help.

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Five Ways to Retire and Maintain Your Standard of Living

“Don’t spend your old age pinching pennies!” That’s The Wall Street Journal’s plea to aging Americans for whom retirement is coming into view on the horizon.

But for many people, pinching pennies will be their only option. Why? Two reasons: Lack of planning and lack of savings.

Retirement, like old age itself, sneaks up on us faster than we could ever imagine. And it isn’t something we can plan for at the last minute. Old age requires money, and money can’t magically appear overnight.

“Half of us need to make serious financial changes,” the Journal says, “or we won’t be able to maintain our standard of living once retired.”

The stats support that claim. According to research out of Boston College, 52% of American households will suffer a decline in their standard of living if they choose to retire at age 65.

Aging Americans have five real choices then:

  • Work longer
  • Buy a lifetime-income annuity
  • Leverage home equity by selling and moving to a smaller house
  • Cut spending (considerably)
  • Put a better plan in place, starting now.

Actually, a combination of the above can prove very effective. But there’s no denying that the bottom of the list is most attractive. It offers preparation, peace of mind, and a more reasonable adjustment in your standard of living.

However close to retirement you may be, it’s never too late to start planning for the rest of your life. If you’d like to talk more about your options, give us a call. We’d be happy to help you figure it all out.

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Paying for Alzheimer’s: Medicare, Medicaid, and Long-Term Care

Few diagnoses are more devastating than Alzheimer’s, both in terms of its health toll and its extraordinary financial imposition on families.

Paying for long-term care isn’t easy, especially if you or your parents haven’t already been saving for years. Even well in advance, finding the extra money to set aside for a long-term care fund can be tough.

There is hope, though.

A new article over at USA Today’s News-Press.com makes that very point. Yes, it is a challenge. Yes, it is expensive. But resources and assistance are available. Paying for long-term care is possible, even if you aren’t wealthy.

“It’s a myth that you have to spend all your money and sell your home to qualify for government assistance,” the News-Press piece says. “Attorneys can work with families to set aside certain funds and make sure a healthy spouse does not live in poverty.”

Medicaid and the VA (Veterans Administration) provide financial assistance for in-home care, as well as assisted living and long-term nursing. Medicare, meanwhile, will pay for temporary skilled-nursing care (if medically necessary).

Applying for that assistance isn’t easy either, though. The requirements are cumbersome, and inexperienced applicants can make mistakes in one process that might work against them in others.

As New Jersey Medicaid attorneys, we at Medina Law Group offer both crisis planning and pre-crisis planning to help people fund their long-term care. We help seniors to qualify and apply for government assistance in a way that will protect their assets while alleviating some of the financial burden of long-term care.

Dementia is a frightening disease, but it does not have to invite financial ruin. There are avenues for help. It is our belief that people who’ve worked hard to earn and save money their whole lives should not have to lose those assets and turn entirely to their loved ones just because of a medical diagnosis.

There is a right way to approach government assistance. If you are interested in either applying now or planning for long-term care in the future, our office can help. Give us a call today.

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How Outer-Space Research May Lead to Better Care for Old Age

Space may be the “final frontier,” but we’re still far away from reaping its whole harvest. Indeed, the distant discoveries of outer space continue to pay major dividends here at home. Take senior healthcare, for example.

The Washington Post recently reported on scientist Millie Hughes-Fulford, who is currently conducting remote experiments aboard the International Space Station, more than 200 miles above the Earth.

Specifically, Hughes-Fulford is studying the behavior of cells in zero gravity, observations she hopes to apply in developing new treatments for age-related illnesses in our world.

It all started when she came to the brilliant realization one day that senior citizens are lot like astronauts. How’s that, you ask?

Well when astronauts are in space, zero gravity has a curious effect on their immune systems. Their T-cells (responsible for motivating the body’s immune responses) are about half as active in space as they would be on Earth. That means the astronauts have a harder time fighting against illness and infection — but only while they’re in space.

Back here at home, meanwhile, the elderly endure a similar compromise in T-cell activity. The difference, of course, is that zero gravity clearly isn’t to blame in their case, as gravity affects the elderly on Earth just like the rest of us.

But understanding how zero gravity alters otherwise young and healthy adults’ T-cells could lead to a major breakthrough in understanding the vulnerabilities of the human immune system.

Ultimately, Hughes-Fulford hopes her space experiments will lead directly to new and improved treatment for age-related illness on Earth. Fascinating! Sometimes the best ideas are the ones that are simply out of this world!

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Do People Really Die of “Old Age”?

We’ve all heard about people who die of “old age.” In fact, for many, that is our wish — to live long and healthy lives and, when our time eventually comes, to pass away gracefully in the swan song of old age.

But a new (and very funny) article from Medical Daily pokes some very scientific holes in our not-so-scientific fantasy of the “old age death.” According to columnist Chris Weller, there just isn’t any truth to the idea.

Weller says that we all ultimately die of something. The older we get, the more susceptible we become to routine illness. Death by “old age” really just means that our bodies have broken down to the point that some other cause of death is able to take hold.

“The idea that people die of pure aging, without pathology, is nuts,” says David Gems, deputy director at the Institute of Healthy Aging. (Weller points out that Gems defines “pathology” as any disease, condition, or ailment.)

But if that idea feels discomforting or depressing, it shouldn’t.

On the contrary, the fact that we as humans cannot be killed by “old age” itself offers hope — we may be able to find ways to strengthen the aging body against pathology in order to prolong healthy life beyond its current outer limits. In fact, Weller reports that research along those lines is already underway.

In the meantime, we can also take comfort in knowing that old age is not some malady to be fought against or feared. Rather, it is yet another stage in life — one that can be healthy, long, and thoroughly enjoyable.

Even after eight or nine dozen of them, then, birthdays are still causes for celebration.

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Questions to Ask Yourself About Your Estate Plan

The Wall Street Journal is running an ongoing series of expert op/eds on the subject of estate planning, and it makes for intriguing reading. One of last month’s entries came from investment guru Mike Piper, entitled “Estate Planning Is About More Than Estate Taxes.”

Piper nails the Number One reason that most people don’t put together an adequate estate plan: they figure that since their estate is smaller than the exclusion amount ($5.43 million for 2015), estate planning isn’t really relevant for them. It’s the old “estates are only for the rich” myth.

“What this line of thinking overlooks,” he writes, “is that there’s a lot more to estate planning than just estate taxes.”

Indeed! In truth, taxes occupy only one corner in the giant arena that is estate planning. A comprehensive plan should also address everything from beneficiary designations and minors’ guardianship to powers of attorney, retirement planning, and whether you’ll be kept on life support in the event of severe injury or coma.

Most interestingly, Piper raises a number of questions that help to illustrate the important of an estate plan even for those whose assets don’t add up to millions. Synthesized, some of those questions include:

  • When did you last update the beneficiaries for your insurance policies and retirement accounts? (For example, is an ex-wife still on the list? Is a newborn child missing?)
  • Would a trust make sense for you and/or your family? If so, which kind of trust?
  • Does your executor know where to find your end-of-life documents, keys, passwords, and important papers? You’d be surprised how often survivors can’t find these after a loved one’s death.
  • Do you understand your retirement spending priorities? For example, should you spend first from taxable accounts, tax-deferred accounts, or a Roth?

These are but a few of the many questions that might come up as you engage yourself in an internal dialogue regarding your estate. We find that in almost all cases, it makes sense to have at least the basic estate planning documents duly executed as soon as possible. If you haven’t done that yet and need help — or if you’re due for an update — give us a call. We’re here for you.

Posted in Estate Planning, Estate Tax, Trust vs. Will | Leave a comment

The Many Demands Facing Family Caregivers

Even for professional caregivers, helping the elderly take care of themselves isn’t always easy. But more than half of the caregiving in this country is rendered by unpaid family members (at least in part).

In fact, more than 22 million people in the U.S. currently provide informal care for an elderly or disabled person without receiving compensation, according to About Health. That’s a significant chunk of our entire national population, and all those hours of volunteer aid can add up to significant stress.

Writing for About, Registered Nurse Angela Morrow itemized some of the most common causes of informal-family-caregiver burnout.

First and foremost are probably the physical demands, which Morrow says can include:

  • Bathing
  • Cooking
  • Feeding
  • Shopping
  • Turning the patient from side to side
  • Lifting the patient in and out bed (not to mention vehicles, bathtubs, wheelchairs, and more)

There are emotional demands, too. The sheer responsibility can weigh on a caregiver’s daily existence. And that’s to say nothing of the tremendous financial responsibility, sometimes adding up to tens of thousands of dollars a year.

If you’re currently caring for a disabled or elderly person, you should know that it’s okay if you sometimes feel frustrated. You aren’t alone. That knowledge can prove therapeutic by itself.

Take a deep breath, schedule some time for solitude whenever possible, and remember to tend to your own needs along the way as well.

Looking for more comprehensive stress relief? Consult Morrow’s list of resources to get some ideas. Remember, to give good care, you need to care for yourself too.

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