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for release September 13, 2002 The Sandwich Generation . . . Helping Your Aging Parents by Carol Abaya, M.A. Are you juggling doing errands for your aging parents, your children, yourself and working at the same time? Are you tired, stressed out and upset that your once vibrant parent is now frail and needy? Do you feel alone? Rest assured you are not alone! The Sandwich Generation is dedicated to the 50 million Americans who may have elder/parent care concerns and/or responsibilities. It May Be Too Late To Avoid Estate Taxes
E-mail June 29, 2002 - "Dear Carol. I need your help. I remember you had such savvy advice on avoiding tax penalties on estates when you spoke at the library. My husband is very ill, and I need to speak with you again. My phones are ______V.A." We arranged to meet July 8. On July 6, I called to confirm. Jim had died on July 5. Once one spouse dies estate planning becomes more complex and expensive. Heirs can inherit up to $1,000,000 (one million dollars) free from federal estate taxes. Each state has different parameters. New Jersey is in tandem with federal. New York, California, Pennsylvania and many other states tax on much lower amounts. In the above situation, assets include real estate in two states, a business corporation, and an investment portfolio. A careful look at everything is now warranted in order to reduce estate taxes when the wife dies. * * * Question: We've been attending estate-planning seminars (are in our early 70s) and are scared about having to go through probate and paying a lot of money to lawyers and the government. We hear about living trusts. Are they worthwhile? Answer: All too often financial planners and lawyers really do not know tax law or how the probate process works. And few planners really understand what is really involved in trusts. First of all, probate in its simplest form (e.g. New Jersey) is the validation of the Will and the issuance of court authority to the executor to handle matters for the deceased. In New Jersey, the Executor takes the Will and the death certificate to the County Surrogate's office, pays very few dollars, and receives the authorization letter. This is all that is required. No attorney is necessary. No inventory of assets is needed, so privacy is maintained. In other states, probate is indeed a process and involves a number of steps. But often these steps are simplified if assets are under a certain amount. Each state differs in this amount. A call to your local Surrogate's office is warranted. In reference to a Revocable Living Trust, it has no value in New Jersey or in a state where probate is simple and no asset inventory is required. In fact, a RLT can place a trustee and/or the estate executor at risk personally financially. Under probate, creditors have a limited time period to file bills. If they don't, they can't collect. With a RLT, there is no time limit, and a creditor can file claims even years after the person dies. The trustee can be held personally liable. In both cases (probate or RLT, or a combination), appropriate taxes MUST be paid. If a trustee or executor disperses assets beforehand, that person can be held personally liable. Just remember: there are no easy answers. Consult a certified elder law attorney. Do not use the lawyer who helped you when you bought your house! * * * Do you have a question? Send it in. Although letters cannot be answered individually, appropriate letters will be answered in this column whenever possible. Letters may be edited. Send letters to Ms. Carol Abaya, c/o Name\Address of YOUR newspaper (or mail direct to her at PO Box 132,Wickatunk, NJ 07765-0132) or contact her through her web site: thesandwichgeneration.com. Carol Abaya is an international-award-winning journalist and creator of the unique magazine The Sandwich Generation: You & Your Aging Parents. NOTES TO EDITORS: text = 500 words; other material = 160 words We would appreciate it if you would include the "Globe Syndicate" bug at the end of the column. ©2002 by Globe Syndicate, all rights reserved. |