Author Archives: Kathy Lane

Do you want to live or die in New Jersey?

Several years ago after my dad died in New Jersey, my brother and I were shocked when we realized how much money we were going to have to pay to the state in inheritance and estate taxes. The percentage was huge, especially compared to almost any other state in the US. Evidently, we were not alone in being shocked by New Jersey’s tax rules.

According to a study recently commissioned by Charles Steindel, chief economist of the New Jersey Department of the Treasury (and former senior vice president of the New York Federal Reserve Bank), 25,000 people moved away from New Jersey between 2004 and 2009. Why? In 2004, the state’s highest income tax rate was raised from 6.37% to 8.97% for those making $500,000 or more, and in 2009 a one year 10.75% tax rate was assessed on those making $1 million or more.

In addition to such high income tax, New Jersey is one of only two states (Maryland is the other) with both a state estate tax and a state inheritance tax; this is a problem for those who would like to leave at least the majority of their wealth to their loved ones when they die.

Steindel also conducted a survey of subscribers to the state’s online newsletter Tax Notes, which keeps professionals such as financial advisers, accountants and attorneys up to date on changes in law, rules and court decisions governing tax matters. Subscribers include advisers to high-wealth clients.

More than half of the respondents said that clients had recently left or expressed interest in leaving the state. Respondents said the top three reasons that clients gave for leaving were state income taxes (85.4 percent), local property taxes (77 percent) and estate taxes (67 percent). The next two reasons most-often cited were retirement (47.6 percent) and housing costs (43.7 percent).

So if you live in New Jersey and you have any assets, consider moving to a more tax friendly, or non-taxing, state like Florida.

It’s Donate Life Month

This is Donate Life Month. It’s a good time to think about how you can help others. Just pledge to donate your organs, tissues and corneas to others when you die; by doing so, you may save up to eight lives and enhance the lives of many others.

Did you know that as of March 2012, there were 113,115 patients waiting for an organ donation or tissue or cornea transplant? More than 1,800 of them were children. (Source: organdonor.gov)

In 2011 there were:
14,144 organ donors
28,535 organ transplants
More than 46,000 cornea transplants

Each day, an average of 79 people receive organ transplants.  However, an average of 18 people die each day waiting for transplants that can’t take place because of the shortage of donated organs.

To learn more about how and why you should help or to sign up, go to organdonor.gov today.

Isn’t great to think that you can save others, even after you’re gone?

To find out more about end of life planning, check out diesmart.com.

Let’s talk about dying!

Today is National Health Care Directives Day.   A day to talk about death.    A day to talk about Living Wills and Health Care Power of Attorney forms, referred to as advance health care directives.

Why is it important to talk about dying and health care directives.  It’s simple.     We will all die.   However,  the way we will die will be different than the way our grandparents died.   They died fast, due to acute illnesses like influenza or pneumonia.  A government study envisions that today, 80 percent will die a lingering death from things like Alzheimer’s, emphysema, cancer and Parkinson’s.   Our children or our spouse will need to make choices on our behalf between life…and quality of life.

When having dinner with your friends or family tonight, think about that sobering number.   Three out of the four people sitting at the dinner table will die a lingering death.    Someone will need the legal authority to make health care choices on your behalf.   Someone will be hoping they are making the choice you would have wanted.

Rather than talking about the  engagement ring Brad gave Angelina….make your dinner conversation important.    Ask yourself these questions:

  • Who do you want to make health care choices on your behalf?
  • What choices do you want them to make?
  • Do you want to donate your organs or your tissues?
  • Have you completed a living will and a health care power of attorney form documenting these wishes.   If so, where are they?    In California and some other states, these two forms are combined in a single form referred to as an Advance Health Care Directive.

Your estate planning lawyer can help you complete a Living Will and a Health Care Power of Attorney form.     You have the right to complete these forms without involving a lawyer.

Hers’s some resources that may help you start the discussion:

A great presentation by Dr. Peter Saul at the TED conference called “Let’s talk about dying.”
When families can’t agree what to do:   A personal experiences described in the San Jose Mercury News:  http://www.mercurynews.com/cost-of-dying/ci_20403982/national-day-support-end-life-health-care-planning
Where Can You Get Free Health Care Directive Forms:   https://diesmart.com/elder-law/living-wills/

 

Estate Planning and Family Feuds

Family feuds and estate planning were an oxymoron in the 50’s and 60’s.

The family consisted of a mother, a father, and children who shared the same mother and father.     Whether someone died with or without a will, the results were usually the same.     If the spouse made a will, they named the surviving spouse and the children as beneficiaries.   If a spouse died without a will, state intestate laws named the surviving spouse and the children as beneficiaries.

People died fast.    There were no caregivers or need to pay for long term care from family resources.

Fast forward to today. According to a recent USA article: Blended families are now the norm.   “More than half of all first marriages end in divorce and about 75% of divorced people will marry again, according to the National Stepfamily Resource Center. About 65% of these unions will include children from previous marriages. More than 40% of American adults have at least one step-relative, according to a Pew Research Center study earlier this year.”

If you are part of a blended family, dying with or without a will may not provide the results you want for children from a prior marriage.   If your surviving spouse dies without a will, state intestate laws do not provide for step children.     The parents or siblings of your surviving spouse will inherit any property you gave to a surviving spouse before state intestate laws grant any inheritance rights to your children from a first marriage.      If you think a surviving spouse has provided for your children from a first marriage in their will, remember a will is a revocable document.   A surviving spouse has the right to change a will after you die and give property you intended to be left to your children from a first marriage  to his or her children from another marriage.

We no longer die fast.     As we age, we lose our ability to manage our own affairs.    Our children are often our caregivers.    A caregiver may believe they deserve more than other siblings for taking care of their parents.

In a recent conversation with an estate planning lawyer, we talked about the growing demand for estate planning lawyers with litigation experience.   He explained families usually fight for two reasons.  The siblings fight because they believe the caregiver doesn’t deserve any special treatment.  The children from a first marriage and a surviving spouse from a second marriage fight because the children want to protect their future inheritance.

Digital Assets – Few Laws Legislate Access to Them after Death

If you own digital assets like a Facebook page or a Google email account, what happens to them when you die?  Assuming that your next of kin knows your passwords, he or she can easily delete them.  However, if your passwords are not available, shutting down these accounts can prove problematic.  Each email or social media company has specific rules governing the disposition of its accounts and refuses to vary from those rules.  Some allow an executor or next of kin with suitable proof of death to close an account.  Others do not, making this writer wonder if those accounts will just float around cyberspace forever.

Many people feel that there should be laws governing all digital assets in the same way that other personal property is currently legislated.  However, even though digital assets have become a big part of our lives, there are only five states that have even begun to legislate what happens to them after your death – Connecticut, Rhode Island, Indiana, Oklahoma and Idaho. 

Here’s a summary of what the current laws cover:

1.  Connecticut’s law, enacted in2005, only covers email.  That’s not too surprising considering that the explosion of social networking sites hadn’t occurred when the bill was being formulated.  Facebook didn’t start until 2004, when it was launched as a site for use only by students attending specific colleges and Twitter began in 2006.  The law states that an email service provider must give the executor or administrator of the estate access to or copies of the contents of the account if the deceased lived in Connecticut at the time of his death. 

2.  Rhode Island, in its 2007 law, also limited itself to email and is very similar to Connecticut’s.

3.  Indiana’s law focuses on electronically stored documents of the deceased.  This could include email as well as many other digital assets.  The 2007 law says that the “custodian” of the electronically stored documents will provide to the personal representative of the deceased’s estate (if the deceased was living in Indiana at the time of death) access to or copies of any stored documents or information. 

4.  Oklahoma’s 2010 law is much more comprehensive.  It says that the executor or administrator of an estate will have the power to “take control of, conduct, continue, or terminate any accounts of a deceased person on any social networking website, any microblogging or short message service website or any email service websites.”

5.  Idaho’s law, which became effective in 2011, is virtually identical to that of Oklahoma.

On January 5, 2012, Senator John Wightman of Nebraska introduced a bill in his state legislature that would be similar to that of Oklahoma and Idaho.  However, according to Wightman, the methodology of how the government would access account information and forward it to an estate representative has not yet been determined.  In addition, several people have asked whether anyone but the owner of an online account should have the right to view and control its content.   Wightman agrees that the bill may have to “be modified in some way to take account of the privacy issues as to whether or not they’ll be able to view the content.” 

Why do you think so few states have tackled this issue so far?  Do you think your state should have legislation that would control access to your digital assets after your death?

To find out more about digital assets and what currently happens to them when someone dies, pick up a copy of our book, Grave Robbers…How to Prevent Identity Theft of the Deceased,   or check out the information at https://diesmart.com/