2011 update Wills and Estate Planning

Seminar materials
Compiled by Kenneth Vercammen
1. Federal Estate a! increased to Estates o"er #$%000%000% but &e' (ersey ta!es
estates o"er #)*$%000.
2. &on+,ormal 'ritings could be Wills under the &e' Probate -a'
.. he recommendation ,or Sel,+ Pro"ing Wills
/. 0e"ised statute re1uires Palimony agreements to be in 'riting.
$. 0ecent case can "oid Will signed under suspicious circumstances
) 2i,ts permitted 'ithout Federal Estate 3 2i,t ta! 'as increased to #1.%000 per
person.

1. Federal Estate a! increased to Estates o"er #$%000%000% but &e' (ersey ta!es
estates o"er #)*$%000.
After a one-year hiatus, the estate tax is reinstated for 2011 and 2012, with a top rate
of 35%. The exemption amount will be 5 million per indi!idual in 2011 and will be
indexed to inflation in 2012. "states of people who died in 2010 #an #hoose to follow
either the rules in effe#t for 2010 or 2011.
The A#t sets a 5 million $eneration-s%ippin$ transfer tax exemption and &ero
per#ent rate for the 2010 year.
'ortability of the unused estate tax exemption permits the exe#utor of a de#eased
spouse(s estate to transfer any unused exemption to the sur!i!in$ spouse without su#h
plannin$. This pro!ision is effe#ti!e for estates of de#edents dyin$ after )e#ember 31,
2010.
"xtendin$ for two years *throu$h 2011+ the pro!ision that permits tax-free
distributions to #harity from an ,ndi!idual -etirement A##ount *,-A+ of up to 100,000
per taxpayer, per taxable year. The A#t allows indi!iduals to ma%e #haritable transfers
durin$ .anuary of 2011 and treat them as if made durin$ 2010.
/any of the 0traditional1 tax extenders are extended for two years, retroa#ti!ely to
2010 and throu$h the end of 2011. Amon$ many others, the extended pro!isions
in#lude the ele#tion to ta%e an itemi&ed dedu#tion for state and lo#al $eneral sales taxes
in lieu of the itemi&ed dedu#tion for state and lo#al in#ome taxes2 the 250 abo!e-the-
line dedu#tion for #ertain expenses of elementary and se#ondary s#hool tea#hers2 and
the resear#h #redit.
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simonsays>?67.#om www.saulsimon.#om
:ew .ersey has an "state Tax on amounts o!er =<5,000. 3o, e!en if no
6ederal "state Tax due, the estate must still file a 6ederal "state Tax -eturn, plus :.
"state Tax -eturn.
2. &on ,ormal 'ritings could be Wills under the 0e"ised Probate -a'
3":AT" ?aw :o. <0; made a number of substantial #han$es to the pro!isions
$o!ernin$ the administration of estates and trusts in :ew .ersey.
The adoption of portions of the @niform 'robate Aode attempted to brin$ $reater
uniformity to the rules $o!ernin$ testamentary and non-testamentary transfers to ma%e
most state laws similar.
The law expanded situations where writin$s that are intended as 5ills would be
allowed, but reBuires that the burden of proof on the proponent would be by #lear and
#on!in#in$ e!iden#e. 'ossibly a Ahristmas #ard with handwritten notes #ould be
presented as a 5ill or Aodi#il.
To present a non-formal 5ill or writin$ reBuires an expensi!e Aomplaint and Crder to
3how Aause to be filed in the 3uperior Aourt, and a hearin$ in front of a 3uperior Aourt
.ud$e.
9e #areful2 ha!e a 5ill done properly by an experien#ed attorney.
.. he recommendation ,or Sel,+ Pro"ing Wills
An old :ew .ersey 'robate law reBuired one of the two witnesses to a 5ill to
tra!el and appear in the 3urro$ate(s offi#e and si$n an affida!it to #ertify they were a
witness. This often #reated problems when the witness was de#eased, mo!ed away, or
simply #ould not be lo#ated. 3ome witnesses would reBuire a 500 fee to simply si$n a
surro$ate paper. /y 7randmother(s 5ill was not self- pro!in$, and the witness to 5ill
extorted a 500 fee.
The :ew .ersey ?e$islature later passed a law to #reate a type of 5ill #alled a
03elf-'ro!in$ 5ill.1 ,n su#h a 5ill, the person for whom the 5ill is made must si$n.
Then two witnesses si$n. Then the attorney or notary must si$n2 with #ertain statutory
lan$ua$e to indi#ate the 5ill is self-pro!in$.
5hen done properly, the exe#utor does not ha!e to lo#ate any witnesses. This
usually sa!es time and money. ,f your 5ill is not 0self-pro!in$1 or if you are unsure,
s#hedule an appointment with an elder law attorney. 3ome law offi#es i$nore the
re!ised law, and fail to prepare self pro!in$ 5ills. )o not use the offi#e in Aarteret that
follows 18<; laws.
The electi"e share pro!isions of the present Aode has still not been #han$ed yet.
Aurrently, a spouse who is not $i!en money in a 5ill #an #hallen$e the terms of the
5ill. This is #alled Dele#tin$ a$ainst the 5ill by a spouseD. A spouse #ould re#ei!e up to
1E3 of the estate, e!en if only married for 2 wee%s. The spouse must file a #a!eat or
lawsuit in 3uperior Aourt. 5e su$$est a formal prenuptial a$reement in 2
nd
marria$e
situations.
A Testator now means both male and female indi!iduals, remo!in$ the term
0Testatrix1. 5ill forms used by attorneys will need to be re!ised.
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The law pro!ides a statute of limitations with respe#t to #reditor #laims a$ainst a
de#edentFs estate. There is no lon$er a need to publish a :oti#e ?imitin$ Areditors.
/. 0e"ised statute re1uires Palimony agreements to be in 'riting.
This law is intended to o!erturn re#ent DpalimonyD de#isions by :ew .ersey
#ourts by reBuirin$ that any su#h #ontra#t must be in writin$ and si$ned by the person
ma%in$ the promise. /ore spe#ifi#ally, the law pro!ides that a promise by one party to a
non-marital personal relationship to pro!ide support or other #onsideration for the other
party, either durin$ the #ourse of su#h relationship or after its termination, is not bindin$
unless it is in writin$ and si$ned. The law pro!ides that no su#h written promise is
bindin$ unless it was made with the independent ad!i#e of #ounsel for both parties.
,n two re#ent #ases, )e!aney !. ?("speran#e, 185 :... 2G< *200;+ and ,n re "state
of -o##amonte, 1<G :... 3;1 *2002+, the :ew .ersey 3upreme Aourt upheld palimony
a$reements between two unmarried #ohabitants. ,n the )e!aney #ase the #ourt held
that 0#ohabitation is not an essential reBuirement for a #ause of a#tion for palimony, but
a marital-type relationship is reBuired.1 ,n the -o##amonte #ase, the #ourt held that an
implied promise of support for life is enfor#eable a$ainst the promisor(s *#ohabitant(s+
estate. Those de#isions are #onsistent with the #ourtFs prior de#ision in Ho&lows%i !.
Ho&lows%i, ;0 :... 3<; *18<8+, whi#h had held that a promise of lifetime support by one
#ohabitant to another in a marital-li%e relationship would be enfor#ed, if one of the
partners was indu#ed to #ohabit by the promise. The #ourt held that the ri$ht to su#h
support is found in #ontra#t prin#iples and that the #ontra#t may be either express or
implied.

$. Supreme Court held Will could be "oid i, signed under suspicious
circumstances
5hen there is a #onfidential relationship #oupled with suspi#ious #ir#umstan#es,
undue influen#e is presumed and the burden of proof shifts to the 5ill proponent to
o!er#ome the presumption.
,f there is undue influen#e in ma%in$ of 5ill and transfer by )eed of a house by
persons in Aonfidential relationship, this #ould subIe#t those persons to puniti!e
dama$es in some instan#es, plus !oidin$ of the 5ill. ,n the /atter of the "state of
/adeleine 3to#%dale, )e#eased 18= :. 2<5 *200;+ *200;
) 2i,ts permitted 'ithout Federal Estate 3 2i,t ta! 'as increased to #1.%000 per
person. he amount permitted ,or 4edicaid trans,ers is 6ero.
*. &( 7nheritance ta!
The :. ,nheritan#e Tax -eturn instru#tions were re!ised in C#tober, 2008. Throw
out your old forms. "!en if no inheritan#e tax due, a Tax 5ai!er on a house must be
obtained and filed if the house was not #o-owned by the spouse.
8. Po'er o, 9ttorney
)o not use a form pur#hased online, unless it #ontains referen#e to the :. statute
reBuirin$ ban%s to honor the 'ower of Attorney. 3e#tion 2 of '.?. 1881, #. 85 *#. G=429-
11+.
:. Federal ;ealth Pri"acy -a' <;7P99=
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A federal re$ulation %nown as the Jealth ,nsuran#e 'ortability and A##ountability
A#t *J,'AA+ was adopted re$ardin$ dis#losure of indi!idually identifiable health
information. This ne#essitated the addition of a spe#ial release and #onsent authority to
all health#are pro!iders before medi#al information will be released to a$ents and
interested persons of the patients.
The effe#ts of J,'AA are far rea#hin$, and #an render pre!iously exe#uted estate
plannin$ do#uments useless, without properly exe#uted amendments, spe#ifi#ally
addressin$ these issues.
Any pre!iously exe#uted 'owers of Attorney, ?i!in$ 5ills, -e!o#able ?i!in$ Trusts,
and #ertainly all /edi#al )ire#ti!es now reBuire J,'AA amendments.
'owers of attorneys and ?i!in$ 5ills should be updated to referen#e this :ew law.
/ore information on the J,'AA law at http4EEwww.nIlaws.#omEhipaa.htm
After you si$n the ?i!in$ 5ill in your attorney(s offi#e, pro!ide a #opy to your
do#tor and family.
KE&&E; VE0C944E& 3 9SS>C79ES% PC
9>0&E? 9 -9W
2053 5oodbrid$e A!e.
"dison, :. 0;;1<
*'hone+ <32-5<2-0500
/ore information at www.Aentral.ersey"lder?aw.#om
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