Hanlon Niemann Blog | A Freehold, New Jersey Law Firm

Punitive Damages Okayed in Probate Dispute Case:

By Fredrick P. Niemann, Esq. a New Jersey Probate Dispute attorney

Our New Jersey Supreme Court has ruled under what circumstances punitive damages can be awarded against a fiduciary involved with Wills, Trusts, Probate proceedings and lifetime transfers.

 
A lawsuit was filed against a doctor who was alleged to have persuaded an elderly woman to transfer a large home in Spring Lake, New Jersey to him in lieu of the local Volunteer First Aide Squad who was the prior testamentary beneficiary under her Last Will and Testament.  In its analysis, the Court concluded that the remedy of punitive damages is limited to situations where an individual (who is essentially a stranger to the testator) gains access to him or her through undue influence and then carries out a scheme to place himself or herself in a position to seize control of the testator=s (decedents) assets through a lifetime transfer or a bequest under their Last Will and Testament.  Generally punitive damage awards filed in the Probate Division of the Superior Court must be in compliance with the New Jersey Punitive Damages Act.  This remedy will be infrequent and limited to circumstances in which the person who received the lifetime gift or bequest is an individual who otherwise cannot be punished through a lesser available remedy by the Probate Court. Because of the unique facts of this case, an award of compensatory damages and potentially punitive damages was available.   This decision is significant for the proposition that Executors, beneficiaries of lifetime and testamentary gifts when obtained through undue influence, suspicious circumstances, etc.  can be held personally liable for punitive damages.

 
If you have any questions, contact Fredrick P. Niemann, Esq. toll-free at (888) 800-7442, or e-mail him at fniemann@hnlawfirm.com.  He is happy to answer your inquiries.

By Fredrick P. Niemann, Esq., a New Jersey Probate Attorney

Recently a New Jersey intestate estate (death without a will or trust) passed under New Jersey law to the surviving spouse.  The decedent owned several joint bank accounts with his wife. The decedent had quite a few debts, including credit card and medical bills.  The question raised is whether non-probate assets are subject to creditor claims or if the estate can be deemed insolvent. 

The answer may surprise you.  Non probate assets are not immune from creditors against an estate of a deceased party to pay debts, taxes, and expenses of administration, if other assets of the estate are insufficient.  A surviving party, P.O.D. payee, or beneficiary who receives payment from a joint-party account after the death of a deceased party shall be responsible to the extent necessary to discharge the claims and debts unpaid by the decedent’s estate.  A proceeding in the Chancery Division of the New Jersey Supreme Court to assert this liability must be commenced no later than 2 years following the death of the decedent.  Sums recovered by the estate representative are to be administered as part of the decedent’s estate. 

If you have any questions regarding New Jersey Probate Law, please contact Fredrick P. Niemann, Esq. today. He can be reached at toll free 732-863-9900 or by email at fneimann@hnlawfirm.com. Mr. Niemann would be more than happy to answer any questions you may have.

By Fredrick P. Niemann, Esq. a New Jersey Estate Administration and Probate Lawyer
The Requirement of Filing Federal Gift Tax Returns – Under the tax code the general rules applicable to income tax returns apply to annual gift tax returns.  That is, a 3-year statute of limitations applies to the initiation of an audit based on the value of the gift.  The IRS has issued regulations describing substantiation requirements to ensure the protection of the statute of limitations for gift purposes. The IRS can challenge the substantiation or appraisal information on gift tax returns many years after the expiration of the statute of limitations under certain cases, mainly based on fraud.  The IRS may challenge the gift value based on the adequacy of the substantiation provided with the initial return and will most likely occur when the donor’s estate is audited.  Our recommendation at this time is that all records, such as valuation reports, bank records, and any other items substantiating a gift tax return, should be kept until the donor’s estate tax return is settled.

New Jersey and Federal Estate Tax Returns - The federal statute of limitations is, again, 3 years from the date the return is filed.  However, in many cases, the federal estate tax return is extended by 5 months beyond the normal due date of 9 months following the date of the decedent’s income tax returns as long as the estate is open.  These income tax returns will also have a 3-year statute of limitations.  A good rule of thumb is to keep the estate records for 5 years after the decedent’s death or until a final closing agreement is reached with the IRS, if later.

If you have any questions regarding gift taxes, contact Fredrick P. Niemann, Esq. toll free at (888) 800-7442 or e-mail him at fniemann@hnlawfirm.com.  He will be happy to assist you.

By Fredrick P. Niemann, Esq., a New Jersey Estate Administration and Probate Attorney
      
Here’s an interesting post I recently read:

The executor of a New Jersey Estate is selling a single family home owned and occupied by the decedent until she died.  The home has never been used in any way as a business.  The executor is selling the house at a price far below the value reported to the New Jersey inheritance tax bureau.  The Bulk Sales section and the taxation section of the NJ Dept. of the Treasury are taking the position that the house is a business sale even though New Jersey regulations exempt withholding tax for a New Jersey based estate. 

My response starts with a question.  Was the property ever used for rental to others?  The Dept. of Revenue takes the position that if so, then the owner was a landlord in the business of renting property, so that the sale of that business’s asset (the property) is subject to the Bulk Sale requirements (notice and escrow, etc.)   Another example of greedy New Jersey taxing anything it can think of.

If you have any questions regarding New Jersey Bulk Sale Law, please contact Fredrick P. Niemann, Esq. today. He can be reached at toll free 1-888-800-7442 or by email at fneimann@hnlawfirm.com. Mr. Niemann will be happy to meet with you to answer any questions you may have.

By Fredrick P. Niemann, Esq., a NJ Will Attorney
The question of who receives a copy of the will after a death is a common one. Despite what most people think, there is no requirement that a copy of the will be read aloud to all family members gathered in a room. Instead, the original will is supposed to be given to the lawyer for the estate. The attorney then distributes a copy of the will to the people who have an interest in it.

So who exactly should receive a copy of the will? Are you entitled to receive a copy? Who should you give the will of a recently deceased person to? Obviously the first person that must receive the original will is the estate’s attorney. If you have the original copy of the will of a family member that has recently passed away, you should give it to your attorney immediately. They will then read the will and determine who has an interest in it, sending copies to all those interested. The executor or personal representative of the estate is entitled to a copy of the will for obvious reasons. They represent the estate in all probate matters.

Anyone who is named as a beneficiary should also receive a copy of the will. This includes the guardians of any minors who are named as beneficiaries in the will. If it is expected or even possible that the validity of the will may be challenged, the attorney should send a copy to those who aren’t included in the will and are contemplating challenging it. This begins the clock on the time allowed for them to challenge the will.

If the will funds a trust, the trustee and successor trustee are entitled to a copy of the will. The estate’s accountant is usually entitled to a copy of the will as well, as is the IRS if the estate is taxable. It is also important to note that once a will goes through the probate process it becomes court record. Since court records are open to the public, the will therefore becomes available for anyone to see after the probate process is complete.

If you are a beneficiary of a will, or associated with the will in any of the matters listed above, you are entitled to a copy of the document. If you have any further questions please contact Fredrick P. Niemann, Esq., a knowledgeable New Jersey Will and Estate Planning Attorney today. He can be reached by telephone toll-free at 888-800-7442 or by email at fniemann@hnlawfirm.com. You’ll be glad to know that he is very approachable and experienced in Wills and Trusts.

By Fredrick P. Niemann, a NJ Trust Attorney

The death of a family member can be one of the most stressful times of anyone’s life. Adding to this stress can be drawn-out proceedings under New Jersey probate, the process in which the court oversees the division of the decedent’s estate. Many times, dividing the estate of a loved one is the last thing you want to think about at such an emotional time. Luckily, there are ways to minimize the stress and sometimes avoid the probate process.

During the probate proceedings, the Court will not only oversee the division of the decedent’s assets, but will also resolve claims of creditors and debts and hear any claims of interest that heirs to the estate may have. Pertaining to the assets of the deceased, the Court will follow the division that the decedent set forth in their will, if the deceased has one. If they do not have a will, the Court will divide the assets according to law, increasing the likelihood that your assets will not go to the people you specifically intended them to.

The Court will appoint someone, called an executor, to become the overseer of the entire estate. Their job is to then write checks, sign over deeds, and handle any other affairs the estate may have. It is the executor’s responsibility to settle all debts and claims against the deceased. Often the executor will hire an experienced probate attorney experienced in New Jersey Estate Administration to assist with most matters, particularly in larger estates with a multitude of complex issues.

As you can imagine, the probate process can be long and drawn-out. Most families desire to avoid such a process. Creating a living trust allows you to ensure that your family will not have to suffer through the probate process during such an emotional time. When you create a living trust, you place your assets that are going to be distributed in trust and name a trustee to distribute them upon your death. The Court will not be involved in the distribution, nor will a court-appointed executor. The trustee acts as the administrator of your estate upon your death. Not only is the trustee someone trustworthy that you choose, but they are obligated by law to follow your wishes indicated in the trust. The living trust thus effectively ensures that your estate will be administrated to your heirs as you wish, while avoiding the stressful death probate process for your family. 

The probate process can take quite a while, depending on how complex your estate is. It is often desirable to avoid this process, especially since it is during a difficult, emotional time for any family. Creating a living trust allows your family to avoid the process, while assuring you that your estate will be distributed as you desire.  If you have questions about New Jersey probate or the benefits of creating a living trust, please call Fredrick P. Niemann, Esq., an experienced New Jersey Trust & Estate attorney today.  He can be reached toll-free at 888-800-7442 or by email at fniemann@hnlawfirm.com. He would happy to meet with you on any estate planning matter you may have.  For further information, go to http://www.youtube.com/user/NJElderLawCenter#p/search/3/I5rmD8r1Qjg to learn more.

By Fredrick P. Niemann, a New Jersey Probate Lawyer
Palimony is financial support provided from one unmarried person to another in exchange for the other taking care of them. Palimony is used in a relationship context, usually involving long-term relationships, where a couple lives together yet does not get married. In 2010, the New Jersey Courts held that the statute of frauds applies to palimony cases, meaning that all promises of palimony must be in writing or they will not be honored. Prior to 2010, the courts had allowed palimony clauses to be oral, meaning verbal agreements, leading to many cases in which an ex-boyfriend/girlfriend was able to recover palimony payments after the couple had broken up. Now that the Courts have applied the statute of frauds to palimony, a ex-partner from a non-marital relationship may no longer recover palimony from their ex if the arrangement is not written down. This means that if your ex-partner orally promised to pay you a sum of money every month in exchange for caring for them, the Courts will not honor this promise.

Fortunately, New Jersey Courts still allow other claims by a former partner from a non-marital relationship. Depending on the specifics of your case, other theories may allow you to recover the payments you were promised from your ex-partner. Theories such as breach of the covenant of good faith and fair dealing; constructive trust; partition; unjust enrichment; fraud-deceit-misrepresentation; promissory estoppel; interference with contractual/prospective economic advantage; conversion; and theft, as well as other claims may be available to you.

If you were promised palimony or support by an ex-partner from a non-marital relationship, please contact Fredrick P. Niemann, Esq. immediately to discuss the specifics of your case. Even if the promise was not written down, you may have alternative methods of recovery. Mr. Niemann can be contacted toll free at 855-376-5291 or emailed at fniemann@hnlawfirm.com. He looks forward to speaking to you.

Warning: Your Decision Does Matter

Fredrick P. Niemann, Esq., NJ Estate Plan Attorney

When creating an estate plan, especially in your will and/or trust, an important decision is who to name as your fiduciary. A fiduciary is a fancy legal term for the person who will take care of your property for you if you are unable to do it yourself, such as the executor of an estate, the trustee of a trust, or an attorney-in-fact under a power of attorney. Your first instinct might be to name one of your children as a fiduciary, but if you want to avoid conflict among your children, this might not be the best option.

When naming a fiduciary, it is important to be able to trust the individual, which is why people often name family members as fiduciaries. However problems can arise when a parent with two or more children names one child as a fiduciary. According to Fredrick P. Niemann, an attorney from Freehold, New Jersey, who spoke on the issue of family harmony at a recent estate planning seminar, a child is often not the best fiduciary for several reasons:

• It is hard for a child to be completely objective. 
• Children often disagree over many things, including how long the estate should take to complete, the selling of assets, and the division of personal property.
• Children often don’t communicate with each other well.

An alternative is to hire a professional fiduciary. A professional fiduciary can be a bank or investment firm with trust administration experience with trust powers, a certified public accountant, or a trust company. A professional fiduciary will charge a fee, but the fee should be explained ahead of time. In addition, because a professional is experienced in managing money and property, your assets are more likely to increase under this person’s or institution’s guidance.

To ensure that your family has some input, you can include a provision that allows one or more family members to discharge the fiduciary if they feel the professional is not doing a good job. This will allow your family to make sure the fiduciary is performing properly without having the burden of acting as fiduciary.

For further information and advice in any estate planning matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.