The Importance of Updating Retirement Account Beneficiary Designations

Many estate-planning mistakes involve retirement accounts. If you or a loved one has rolled over an employer sponsored 401(k) plan into an existing IRA, it is imperative that you update the beneficiary designation form that is on file. The failure to do so may result in an unintended beneficiary. Many individuals unintentionally fail to update the intended beneficiary on file in accordance with life situations such as divorce, death, or birth of a family member or another loved one.

IRA accounts may have multiple beneficiaries such as a trust, charity, family member or friend. When selecting a beneficiary for an IRA account, you should have a primary beneficiary as well as an alternate beneficiary. In addition, if you or a loved one is naming a trust as the beneficiary of a retirement account, the trust must be appropriately drafted and meet certain IRS requirements in order to accept qualifying monthly distributions.

Other common mistakes when it comes to retirement accounts is naming a minor or an estate as a beneficiary of an IRA. A trust should be named for the minor’s benefit as a beneficiary, as opposed to explicitly naming her or him as the direct beneficiary of the IRA. Also, naming an estate as the beneficiary will eliminate certain tax benefits to these accounts. Upon the death of the owner of an IRA account, all funds in a Roth IRA must be removed within five years. The same rule applies to a traditional IRA unless the original holder of the IRA was 70½. In that case, the monthly qualifying distribution rate would be based on the age of the deceased.

Ultimately, when completing the beneficiary designation form, it is important to keep your estate planning goals in mind. It is important to discuss your goals with a New Jersey estate planning attorney who can guide you through the process. If you have completed the beneficiary designation form, it is important to have an experienced estate planning attorney review the form to ensure that the retirement accounts are in accordance with the rest of the estate plan, because a custodian’s standard beneficiary form may not cover all the bases.

The experienced New Jersey estate planning attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of estate planning, including the designation of beneficiaries on retirement accounts. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

How Do Criminal Convictions Affect Child Custody in New Jersey?

When couples who have a child or children divorce, one of the most important decisions that will be made is which party will get custody. In New Jersey, there are several types of child custody, including temporary, sole, joint, and split. When a child custody dispute is brought before a New Jersey family court, a judge will look into a number of factors to determine what is in the best interest of the child or children. Some of the factors to be considered are the physical safety of the child or children and fitness of each parent. Due to the fact that character and propensities are relevant to determining these factors, a judge may find a parent’s criminal history to be a significant factor in child custody proceedings.

How much a criminal conviction can impact child custody depends on a number of factors, including the nature of the offense, victim of the offense, how long it’s been since the offense occurred, the frequency of crimes committed, and the nature of the sentence. A court may give more weight to crimes that are violent or drug-related offenses. Offenses involving domestic violence, assault, battery, and stalking may be a significant factor in determining child custody, as the court system may worry about the parent’s anger management and tendency to commit violent acts. A judge may order a parent to take a follicle drug test if he or she has a prior drug-related conviction. A follicle drug test may reveal a person’s drug use within the past several months. If a parent tests positive for a drug test, the court will likely order that any visitation must be supervised.

Another factor that a court will take into consideration is the victim of the offense. A parent’s conviction that involves the emotional or physical injury of their child or children may result in the limitation of their child custody and visitation rights. The court may be concerned that if a parent had injured their child in the past, he or she could hurt the child again. If the conviction involves sexual assault or life-threatening injuries, the court has the potential to terminate a parent’s child custody and visitation rights completely.

A family court will take the age of the conviction into consideration when determining child custody. For example, if a parent has a drug possession conviction, introduces evidence that the offense was an isolated incident, the negative impact of the crime may be lessened. However, if the crimes committed were recent and demonstrate reckless or dangerous behavior or poor judgment, the court will be more inclined to weigh the offense heavily in a child custody proceeding.

The final factors a family court will take into consideration when determining child custody is the frequency of crimes committed and the nature of the sentence. A parent’s multiple convictions and lengthy sentences, regardless if the crimes are violent or not, may significantly impact child custody determinations. A family court may be concerned that if a parent has frequent convictions, he or she is unable to follow orders from a court of law. If a parent has faced lengthy sentences, the court may be concerned about a child’s stability as they don’t want the minor bouncing from relative to relative while a parent serves his or her sentence. If the other spouse is able to demonstrate that he or she is able to provide a stable living environment for the child or children, that parent may be more likely to be granted full custody.

If you are a New Jersey resident going through a divorce and you have children, it is imperative that you seek the guidance of a lawyer who is experienced in divorce proceedings and family law matters. Our New Jersey divorce and child custody lawyers can help you reach the best possible resolution regarding your child custody matters. For more information or to schedule a consultation, contact our New Jersey divorce and child custody law office at (973) 256-0456.

Evaluation Time: Have An Advocate Present

A home evaluation is conducted by a Managed Long Term Care Company (MLTCC) after an individual has been approved for Community Medicaid by the Department of Social Services. The evaluation process can be complex and may result in difficulty due to the MLTCC failing to award a Medicaid recipient with sufficient hours. An evaluation by a MLTCC is extremely important, because it is the determining factor for which benefits a recipient is entitled to through the Medicaid program.

A nurse is sent to the recipient’s home to evaluate his or her needs and establish a long-term care plan. The long-term care plan will include the number of hours awarded to the recipient for a home health aide to assist the Medicaid recipient with daily tasks. The amount of hours awarded can range from a few hours per day to a live in home health care aide. Once an individual is satisfied with the long-term care plan, he or she may enroll with the MLTCC. If an individual is not satisfied with the long-term care plan, he or she may request an evaluation with a different MLTCC.

During the evaluation, a series of points are generated based upon the answers provided to questions that are asked by the evaluating nurse. The nurse may ask questions such as “does the recipient use the toilet alone or take a bath alone.” The points awarded determine the number of hours of care that an individual will receive through the Medicaid program.

An attorney may assist with a home evaluation component to help maximize the care component. A sufficient long-term care plan ensures that an aging person is safe while he or she remains in their home. An attorney or another advocate is entitled to attend the evaluation by the MLTCC. A local expert can assist in stressing the importance of maximizing the hours for an aging individual to the evaluating nurse.

Having an advocate attend the evaluation and communicate with the MLTC to maximize hours can be an invaluable component of the Community Medicaid process. If you are a family member or loved one and are having trouble receiving an appropriate or adequate long-term care plan, contact an elder law attorney who can assist you in receiving the care you need.

The New Jersey Medicaid planning attorneys at Hunziker, Jones and Sweeney, P.A. can answer your questions about planning for Medicaid, and assist you along the way. For more information or to schedule a consultation, call our New Jersey Medicaid planning law firm at (973) 256-0456 or fill out our contact form.

Funding An Irrevocable Trust Sooner Than Later

An asset is owned by a trust once it is transferred into the trust that was created. This is known as funding the trust. The transfer of assets into a trust can occur in a number of ways depending on the type of asset. For Medicaid purposes the five-year look back period begins one month after an asset is placed in the trust. This means that if a property deed is transferred into the trust in December, the five-year look back period begins in January and ends five years from that date. Every time a new asset is placed in the trust a new five-year look back period will begin for that specific asset, not for all the assets in the trust.

Below are some types of assets that may be placed into an irrevocable trust in order to fund the trust:

  • Money from a savings account may be placed into a trust. However, the trustee must then “open” the trust account. When the trust account is “open” a trustee is able to remove money from the savings account and put it into a Trust account.
  • Life Insurance policies may be placed into a trust. When a policy of this nature is placed into a trust an individual is essentially requesting a change of ownership and beneficiary. The trust will now be named as the policy owner and beneficiary.
  • Real property may also be placed in a trust. The transfer of real property or a deed into a trust shall be prepared and executed by an experienced attorney. This will essentially transfer a property deed from an individuals name into the name of the trust.
  • Brokerage accounts can be placed in a trust. However, like money from a savings account, a trustee must open a brokerage account in the name of the trust. Once the account is opened in the name of the trust, the funds may be transferred from the original brokerage account into the new brokerage account of the trust.
  • Automobiles are often transferred to a trust. However, the Department of Motor vehicle (DMV) must be contracted in order to change the Title to the name of the trust.

It is imperative that a trust be funded in a timely and correct manner in order to overcome the five-year look back period. This will ensure that an individual remains eligible for Medicaid benefits. It is worth noting that retirement funds such as 401K’s, IRA’s, and 403B’s are not usually placed in a trust due to unfavorable tax penalties.

It is important to consult a trusted advisor when funding a trust in order to ensure Medicaid eligibility for the future. An experienced Medicaid planning attorney can assist you in planning ahead for Medicaid and advise you how best to protect and distribute your assets. The attorneys at Hunziker, Jones, and Sweeney P.A. can explain the intricate Medicaid eligibility rules to you, help you decide if the program is right for you, and assist you with formulating a plan to divest yourself of assets. For more information or to schedule a consultation, call our New Jersey Medicaid planning law firm at (973) 256-0456 or fill out our contact form.

New Jersey Alimony Reform

New Jersey alimony lawyersIn September 2014, New Jersey Governor Chris Christie signed the Alimony Reform Act into law, which clarified areas of alimony and extended rights to payers. Although the act mainly applies to future divorces, those who are divorced and have a legitimate reason, such as loss of income, illness, or retirement, may be able to modify their alimony under the new law. Additionally, the term “permanent alimony” has been replaced with “open durational alimony.”

One of the most prominent changes is that for marriages that last less than 20 years, duration of alimony cannot exceed the length of the marriage, unless a judge finds that there are exceptional circumstances. For marriages that last over 20 years, the court has discretion to determine how long alimony payments will last. Duration of alimony restrictions do not apply to those who have been paying alimony prior the enactment of this legislation.

Those who currently pay alimony and have experienced a loss of income, illness, or have retired, may be able to modify or terminate their alimony obligations. Under the the Alimony Reform Act, a judge is required to investigate whether there is a change of circumstances after 90 days of unemployment. The new law also defines what a change in circumstances is by listing factors for a judge to consider. Previous to this law, a judge could have used his or her discretion to determine how much time constitutes a long-term change of circumstances and what constitutes the change. The new law also provides the judge with the option to temporarily modify the alimony payments, should the payer need it. Additionally, judges are required to produce findings of facts and conclusions of the law explaining their decisions in these matters.

A payer may apply for alimony modification or termination once they reach full retirement age under the Social Security Act (67 years old) through a court proceeding. Contrary to the past, even if the payer is healthy and will continue to work beyond 67 years old, the Act requires a judge presume that the individual is retiring in “good faith.” The judge may then advance the proceedings to Plenary Hearing, at which the alimony recipient has the burden of proof to show why alimony should not end due to the payer’s retirement. Under the new law, a payer may apply for alimony modification or termination prospectively, before they reach full retirement age, allowing payers to plan for their retirement.

Prior to the alimony reform, the payer had the burden of proof to show that he or she could not afford to pay alimony because their income declined after retirement and the alimony recipient no longer required those funds. The new law requires a judge to take into consideration whether or not the alimony recipient should have been able to save funds for their own retirement. It also states that neither party has a greater right to be maintained in the marital lifestyle than the other. Prior to the law, the recipient had the right to be maintained in the marital lifestyle.

If you are an individual who is seeking a divorce from your spouse, it is important to seek the guidance of an experienced New Jersey divorce lawyer. The divorce lawyers at Hunziker, Jones & Sweeney, P.A. understand that going through a divorce can be an a difficult and emotional time that can affect all aspects of your life. Our divorce lawyers provide quality legal representation to ensure your divorce has the best possible outcome. For more information about New Jersey alimony or to schedule a consultation, contact our New Jersey divorce law office at (973) 256-0456.

Placing Property In A Revocable Trust

A common estate planning mistake occurs when individuals own or acquire property outside of a trust. This can lead to unintended tax consequences and exposing property to probate or creditors.

Placing property in a revocable trust provides benefits such as allowing assets to avoid the probate process. In addition, by placing property in a revocable trust, it will allow family members or loved ones to have control over the assets in the event that the creator of the trust becomes incapacitated. Otherwise, a court may need to appoint a guardian.

It is imperative that any newly acquired property be placed in an existing trust or a new trust be created. While there are many different types of trusts, some may offer different benefits to protect property. Certain trusts prevent creditors from being able to collect on any debts that may be owed upon the death of the creator. A revocable trust provides the option to change, modify, add, or revoke in accordance with the terms of the trust. For example, a creator may want to change the beneficiary or modify beneficiaries in the event that their child has children. This will allow the creator to change the beneficiary of assets to reflect all of their grandchildren.

For many individuals setting up a trust is important to protect their assets and avoid state and federal tax consequences. However, it may not be the right estate planning method for every situation. It is important to speak with an experienced estate planning attorney to establish a comprehensive estate plan that will reflect your individual goals. In addition, it is important to remember that when you establish a trust, it is imperative to maintain and fund it. Furthermore, it is important to remain up to date on changing laws and consistently update all estate planning documents to reflect life events. The failure to update beneficiaries may result in costly litigation, unintended beneficiaries, and a delayed distribution of assets.

When creating a trust, it is important that individuals consult an experienced attorney who can oversee the process. The New Jersey trust & estates lawyers at Hunziker, Jones, & Sweeney P.A. have experience representing clients in various matters, including establishing revocable trusts. The attorneys at the firm are trusted by their clients to handle each legal matter with diligence and compassion. For more information or to schedule a consultation, contact our New Jersey trusts & estates law firm at (973) 256-0456.

Taking On The Role Of “Agent” In A Power Of Attorney

It may be a big undertaking when obtaining a power of attorney for a family member or loved one. A power of attorney provides authority to an agent to make decisions on behalf of the principal in the event that he or she becomes incapacitated. The “principal” is the person for whom an individual is acting as power of attorney. The “agent” is the individual responsible for carrying out the wishes of the “principal.”

In the State of New Jersey, the General Durable Power of Attorney Act (NJSA) section 46:2B-8.1. is a statute that governs a power of attorney. By agreeing to have power of attorney, an individual has a fiduciary duty to act in the best interest of the other person. In accordance with the New Jersey statute, an individual with power of attorney must:

Act in accordance with the guidelines set forth by the principal in the power of attorney;

  • Act in good faith;
  • Ensure that the principal’s property is kept separate and distinct from that which is controlled by the agent;
  • If the agent does not have the authority to make medical or healthcare decisions for the principal, then it is imperative that the agent with power of attorney cooperate with other individuals with authority; and
  • Maintain accurate records of transactions, receipts, and anything else entered into by the agent on behalf of the principal.

Agreeing to have power of attorney may be an extremely stressful decision. When agreeing to such an significant responsibility, it is important to effectively communicate with the individual asking you to have power of attorney. Additionally, it is important to make sure that both parties are comfortable with the decision before executing any agreements.

The experienced attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of estate planning, including the establishment of a durable power of attorney. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

Changes To New Jersey Child Support Laws

The term “child support” gives the general implication that the support is intended for adolescents up until they reach the age of emancipation. However, up until recent years, this was not the case in New Jersey. Prior to recent legislation, many parents would continue to provide child support long after the child reached the age of 18, or would terminate the payments themselves without obtaining a court order. The New Jersey legislature recognized the issue and in 2016 passed a legislation that allows for the termination of child support when the child turns 19 years old. On February 1, 2017, the law went into effect in New Jersey. The law not only applies to future child support orders but existing orders as well.

Under the law, the age of child support emancipation in New Jersey change from 18 to 19 years old. Child support may be extended beyond the age of 19 years old, up to the age of 23, if a child has not yet completed high school, is currently enrolled full-time in a higher education institution, or has a permanent disability. However, individuals may also establish a custody agreement that sets forth its own terms and conditions regarding child support cut off dates.

Prior to the legislation, New Jersey allowed for child support to continue until the child entered marriage, entered the armed forces, graduated from high school without pursuing a post-secondary education, or completion of a post-secondary school. In any of these circumstances, if the parent wished to terminate their child support requirements they would need to get consent from the custodial parent or file an application with the court.

The New Jersey Probation Division will send notifications to families of children nearing the age of 23 that state that child support payments will cease as of a specific date. Similar to this, if a family was collecting child support for an individual who is either over the age of 19 years old, but younger than 22 years old, they will received a letter indicating whether they wish to request a modification or extension of support. For those who have a child that will turn 19 years old after August 1, 2017, they should have received a notice of child support termination six months prior to the child turning 19 years old.

Each notification requires the receiver to acknowledge receipt and provides a copy to the proper court of law. If acknowledgment is not received, the court will issue another letter. Regardless if the court received acknowledgment from the receiver, the court will terminate support on the child’s 19th birthday and both parents will receive a letter confirming termination.

Those that have received a notice of termination for child support payments reserve the right to file a motion for a continuation. The individual must provide an alternative end date as well as:

  • Documentation showing a child is still in high school
  • Documentation that a child is a full-time student in a higher education institution
  • Medical records proving that a child has a mental disability or physical impairment, and that such disability existed prior to being 19 years old

If you would like information regarding the updated New Jersey child support laws, contact an experienced family law attorney. The attorneys at the Law Offices of Hunziker, Jones, & Sweeney, P.A. have experience assisting New Jersey residents with all aspects of family law, including child support and custody matters. We handle each legal matter with diligence and compassion. For more information or to schedule a consultation, call our New Jersey family law firm at (973) 256-0456.

Adding A Prenuptial or Postnuptial Agreement To An Estate Plan

Many people who are looking to tie the knot believe that mentioning a prenuptial agreement eliminates the romance. However, like any business relationship, a prenuptial or even a postnuptial agreement provide a range of benefits and security to both parties involved in the marriage.

Prenuptial agreement is a contract that is entered into between two parties prior to marriage. A postnuptial agreement is entered into after a legal marriage has already begun. Both prenuptial and postnuptial agreements allow the parties to plan for a variety of issues in the event of death or divorce of one spouse. Some individuals believe that a prenuptial agreement is unnecessary if both parties have comparable paying jobs, assets, and no prospect of inheritance. However, it is always beneficial to prepare early on for any incidents that may arise between spouses regardless of financial worth. The National Center for Health Statistics (NCHS) conducted a study that showed a third of marriages will result in divorce within ten years, which is why prenuptial agreements are especially important in the following situations:

  • A significant inheritance
  • Obtaining higher education pre or post marriage
  • One spouse owns a business or both spouses share a business
  • When one spouse financially supports a loved one such as a parent or child
  • Having assets prior to marriage
  • Having children prior to a current marriage
  • Disparity in net worth or wealth

A prenuptial agreement provides a detailed framework and financial arrangements in the event that death or divorce may occur. The agreement addresses the division of property, debt, maintenance, and other financial arrangements. Both prenuptial and postnuptial agreements help mitigate conflict between parties because they are negotiated during amicable times. Additionally, it decreases costs that may be incurred if a divorce should arise. Both parties are provided the opportunity to negotiate a fair arrangement and be given the comfort of having a safety net in case of conflict or death.

Prenuptial agreement or postnuptial agreement can prevent unnecessary conflict and preserve the resources of the marital estate from being depleted by litigation costs incurred because of divorce or death of a spouse. A prenuptial agreement also can provide property and spousal maintenance arrangements that are acceptable enough to both parties that they could be agreed to before marriage.

When executing a prenuptial or postnuptial agreement, it is important that individuals also consult an experienced estate planning lawyer who can oversee the process and will help to ensure that it is drafted in accordance with New Jersey State law. The lawyers at Hunziker, Jones, & Sweeney P.A. have experience representing clients in various matters, including estate planning and family law. The firm’s attorneys are trusted by their clients to handle each legal matter with diligence and compassion. For more information or to schedule a consultation, contact our New Jersey estate planning law firm at (973) 256-0456.

New Jersey Medicaid Penalty Divisor Increased For Gifts

As of April 1, 2017, the New Jersey Medicaid Program increased the penalty divisor for applicants who make monetary gifts. The divisor was based on a survey conducted to determine the average cost of nursing home care within the State of New Jersey.

In order for an applicant to eligible for long term care Medicaid in an assisted living facility or nursing home, there is a five-year look back period. This means that all financial records as well as any gifts made during the previous five years must be disclosed to Medicaid. In accordance with New Jersey law, if an individual or spouse made any monetary gifts over the course of the five years prior, then Medicaid would impose a gift penalty.

A penalty period is a time frame in which an individual will not be entitled to receive Medicaid and will have to pay for their own cost of care in a nursing home facility or assisted living facility. For instance, if Medicaid imposes a three-month penalty period because you made gifts within the last five years, then you would be responsible for paying for the cost of care for those three months.

According to New Jersey State Law, the duration of a penalty period is based on the amount that an individual has made in gifts, and is determined using the penalty divisor. As of April 1, 2017, the New Jersey Medicaid Program increased the penalty divisor from $332.50 per day to $423.95 per day. This means that if an individual made $20,000 in gifts, her or she would incur a 48-day penalty.

Due to the increased penalty divisor, individuals will be penalized less for past gifts that were made. An experienced Medicaid planning lawyer can help you plan ahead for Medicaid and advise you how best to protect and distribute your assets. The attorneys at Hunziker, Jones, and Sweeney P.A. can explain the intricate Medicaid eligibility rules to you, help you decide if the program is right for you, and assist you with formulating a plan to divest yourself of assets. For more information or to schedule a consultation, call our New Jersey Medicaid planning law firm at (973) 256-0456 or fill out our contact form.

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