What You Should Do Now to Make Your Executor’s Job Easier

Sorry to begin with such a sobering thought, but we are all going to die.  Most frequently, the Executor of your Estate is someone with whom you had a close relationship:  either a spouse, child or close friend.  They are dealing with your loss.  You have asked them to serve as Executor, a role for which most persons have had no experience.  What can you do now to make their job easier?

First, make certain that the person you name to serve as Executor knows you are making this request of them.  Verify they are willing to serve in that capacity.  Tell them where they can find the original of your Will and where they can find a list of instructions which you will make available for their use.  That list of instructions should identify accounts, insurance policies, whether you have a safe deposit box and, if so, in what institution and the passwords for all of your digital accounts.

It is helpful to you to create a document reflecting your current financial information.  It really simplifies the job of Executor if such a document is available with this information.  Remember, you don’t need to tell your Executor what you have by way of assets at this time.  They simply need to know how they can readily determine the answer to that question when called upon to fulfill their responsibilities.

Many families end up squabbling over items of personal property.  Often, it makes little difference whether the items have significant monetary value.  I want that ring, Mom promised me the grandfather clock, Dad promised me his baseball autographed by some major league star.  Avoid, or at least minimize, this problem by creating a List.  On the List, you can identify individual items of personal property and the person who is to receive them.  Make sure there is only one such List in existence at any moment in time.  You must sign the List and remember to date it as only the most recent List will be effective.

Have you named a person to serve as your funeral representative in your Will?  In the absence of doing so, most states have a statute which establishes the priority ranking for the person to carry out your wishes.  That sounds fine, but if your spouse has passed and you have children, each child has equal right to make those choices.  If they don’t agree, how do they iron out any disagreement?  Name one person and make certain that individual knows your wishes and will be willing to carry them out on your behalf.

When did you last update your Will?  Did you list individuals who are no longer living and for whom you have named no successor?  If you named a charity, is that charitable institution clearly identified?  Does it exist?  For example, there have been several situations in which a decedent named a Catholic school or other organization to which they had a strong attachment.  However, by the time they passed away, that institution was no longer in existence.  In such a case, what is the Executor required to do?  Perhaps it is time to review your Will and update it to address this potential problem.

Finally, and speaking from experience, if you have lived in your home for a long time you probably have accumulated many “treasures”.  It is the responsibility of the Executor to review those items, sell the items unless specifically given to someone through your List, decide what to discard and make the arrangements to do so.  If you are like me, maybe it’s time to clean out the attic, the basement and other cubbies in which you have stored your children’s grade school papers or “stuff” you got from your parents when they died.

Budget Proposal Announced By New Jersey Governor Phil Murphy

On March 13, 2018, Governor Murphy presented his budget address for Fiscal Year 2019.  It has been said no one would eat a sausage if you watched it being made.  The same can be said of the legislative process.

Between this address and July 1st when the budget for Fiscal Year 2019 is to be in place, there may a number of changes to what was presented.

First, a quick comment upon what was not said.  Even though Candidate Murphy had stated that he would not modify New Jersey’s decision to rescind its Estate Tax, some had speculated it might reappear in some form.  While no one expected to see the exemption revert to the $675,000 level effective for persons who died before December 31, 2016, some adjustments were anticipated.  That still may occur, but was not a point raised in the Governor’s address.

The Governor has proposed a budget of $37.4B.  He has proposed an increase in school related funding.  A goal is to expand pre-K funding statewide.  As a first step in plans to make community college tuition free for all students, over the next year Governor Murphy proposed an additional investment of $50M in community colleges.

The Governor has proposed raising the state property tax deduction from its current level of $10K to $15K.  He has proposed creation of a new Child and Dependent Care Tax Credit for middle class and working families.

The budget also contains other proposals for new programs or expansion of existing programs.

The Governor has proposed reinstating the sales tax rate in New Jersey at 7%.  On the revenue side, the Governor has proposed a “millionaire’s tax” upon those who have taxable income in excess of $1M.  He contemplates such a tax would raise approximately $765M.  He also proposed closing a “loophole” which benefits hedge fund managers.  He believes that doing so will generate an additional $1M.

The Governor also favors legalization of marijuana.  It is not clear that the Legislature will support this concept or, if legislation is enacted the amount of the revenue which might be realized.

In concluding, the Governor declared as his goal the desire to build a stronger and fairer New Jersey.

Tax, Trusts, and Estates Client Alert

Many of us have digital assets.  Until now, the fiduciary you selected in a Will or other document may not have had the legal right to obtain, manage or distribute those assets.  Even if you had a Will or similar document prepared within the past few years, it probably did not contain provisions which gave your fiduciary the right to carry out your wishes with respect to digital assets.  New Jersey recently adopted the Uniform Fiduciary Access to Digital Assets Act (the “Act”).

We call your attention to key ways in which the Act affects you, your family, your assets, and your estate planning.  Please contact the Firm to discuss best practices for incorporating this new development into your estate planning instruments.

  • The Act authorizes fiduciaries, agents under a Power of Attorney, guardians, trustees, or executors of estates to manage digital assets in the same way they have authority to manage traditional, tangible assets.
  • The Act defines a digital asset as “an electronic record in which an individual has a right or interest.” What does this mean to you?  Digital assets include your online financial accounts, email accounts, social media accounts, computer files, web domains, and virtual currency.
  • The Act does not apply to digital assets of an employer used by an employee. For example, your work email account would not be able to be accessed by your fiduciary.
  • Under the Act, fiduciaries are bound by the same fiduciary duties that normally apply to management of tangible assets. For example, an executor would violate his or her duty by publishing a decedent’s confidential communications.
  • In order to gain access to digital assets, the fiduciary must send a request to the custodian with a copy of the document granting fiduciary authority. If you wish to grant your fiduciary access to these types of assets, it is important you contact us to update your estate planning instruments.  The Act will go into effect on December 12, 2017.
  • In addition to updating your estate planning instruments to authorize a fiduciary to manage your digital assets under the Act, some service providers (Facebook, Google, etc.) directly allow you to appoint someone to have access to your digital assets. This is similar to a beneficiary designation under a Life Insurance Policy, IRA or similar asset, and is referred to as a “user tool”.