Estate planning is not something most people revisit often enough. Tax laws change, family circumstances shift, and documents drafted years ago may no longer reflect current wishes or legal realities. Staying informed, and knowing when to update a plan, can make a significant difference for families and their advisors.
Mandelbaum Barrett PC’s Trusts and Estate Planning practice has hosted annual Tax, Trusts and Estate Planning Forums to bring together professionals, families, and community members for educational programming on these topics. This post covers the planning areas addressed in these programs and why they remain relevant for New Jersey families regardless of estate size.
What the Annual Tax, Trusts and Estate Planning Forum Addresses
The forum format brings together attorneys, CPAs, financial advisors, and families for panel discussions on legal and tax developments affecting estate planning. Held at venues accessible to professionals and community members in Northern New Jersey, these events have offered continuing education credit to attorneys and others in attendance.
The 5th Annual Forum held in December 2017 at Mayfair Farms in West Orange, New Jersey offered 1.5 CE credits and featured panel discussions on guardianships, special needs trusts, irrevocable trusts, and tax law changes. Those topics remain central to comprehensive estate planning today, even as specific legal provisions have continued to evolve.
Key Planning Topics from the Forum Agenda
Guardianships. When a family member loses capacity due to age, illness, or disability, guardianship may be necessary to authorize someone to make decisions on their behalf. Planning ahead with powers of attorney and healthcare directives can avoid the need for court involvement, which is more expensive and time-consuming for families.
Special needs trusts. Families with a member who has a disability need to plan carefully to preserve eligibility for government benefits while still providing supplemental resources. A special needs trust, properly drafted and funded, can hold assets for the benefit of a person with a disability without disqualifying them from Medicaid or Supplemental Security Income.
Irrevocable trusts. These planning tools are used for purposes including asset protection, Medicaid planning, and estate tax reduction. Because an irrevocable trust generally cannot be modified after it is created, structuring them carefully with a clear understanding of long-term consequences is critical.
Tax law changes. Federal and state tax law affecting estates and inheritances has shifted significantly over the years, including changes to the federal estate tax exemption and, for New Jersey residents, the phaseout and eventual repeal of the New Jersey estate tax. Staying current on these changes is essential for advisors helping clients with estate and succession planning.
Why Annual Estate Planning Forums Benefit Families and Professionals
Estate planning intersects with tax law, elder law, disability law, and family law in ways that require practitioners to keep pace with developments across multiple disciplines. Annual forums give attorneys, CPAs, and financial planners a structured opportunity to hear from practitioners about recent developments and how they are affecting clients.
For families, these programs provide a foundation for more productive conversations with advisors. When clients have a working knowledge of basic planning concepts, they can better communicate their goals and make more informed decisions about their plans.
What is the difference between a revocable and irrevocable trust?
A revocable trust can be changed or dissolved by the person who created it during their lifetime. It is primarily used to avoid probate, maintain privacy, and provide for the seamless management of assets if the creator becomes incapacitated. An irrevocable trust generally cannot be modified after it is established and involves giving up control over the assets transferred into it. Irrevocable trusts are used for purposes such as asset protection, Medicaid planning, and reducing the taxable estate. The right choice depends on the client’s goals, asset situation, and family circumstances.
Does New Jersey still have an estate tax?
New Jersey repealed its estate tax effective January 1, 2018. Before that date, New Jersey had one of the lowest estate tax exemptions in the country, which affected planning for residents with even modest estates. However, New Jersey retains an inheritance tax, which is separate from an estate tax and is based on the relationship between the deceased and the beneficiary rather than the total size of the estate. Planning to minimize New Jersey inheritance tax exposure remains relevant for many families.
When is a special needs trust necessary for a family member with a disability?
A special needs trust is typically needed when a family member receives, or may become eligible for, means-tested government benefits such as Medicaid or Supplemental Security Income. Leaving assets directly to a person with a disability can disqualify them from these programs, while a properly structured special needs trust allows assets to be used for supplemental needs without affecting benefit eligibility. Families should review their estate planning documents with an attorney any time a family member’s disability status or benefit eligibility changes.
How often should an estate plan be reviewed?
Estate plans should be reviewed after any significant life event, including marriage, divorce, the birth or adoption of a child, the death of a beneficiary or named executor, a significant change in assets, or a move to a different state. In addition, tax law changes can affect the tax efficiency of an existing plan and may warrant updates. Even if no life event has occurred, a plan that has not been reviewed in five or more years may benefit from an update to reflect current law and the client’s current wishes.
Connect with Mandelbaum Barrett PC’s Trusts and Estate Planning Team
Planning for the future requires knowledge of both the legal tools available and the tax and family considerations that affect how those tools work. Mandelbaum Barrett PC’s Trusts and Estate Planning attorneys work with individuals, families, and businesses on plans tailored to their circumstances.
To discuss your estate planning needs with an attorney, contact Mandelbaum Barrett PC today.