Charitable Donations in Exchange for Real Property Tax Credits in New Jersey

On May 4th, 2018, New Jersey Governor Phil Murphy signed Senate Bill No. 1893 permitting municipalities to issue property tax credits to property owners who donate to one or more charitable funds created by the municipality where the taxpayer’s property is located.

New Jersey property owners may donate up to 90% of their tax bill to their municipality’s charitable fund(s). If the tax credits that result from a charitable donation exceed the taxpayer’s annual real property tax owed, the unused amount of tax credit may be carried forward to subsequent tax bills not to exceed five years.

Under the new law, a municipality establishes a charitable fund or funds, each with a specific public purpose, through an ordinance or resolution of its governing body. Charitable funds may also be used to satisfy property taxes, pay for the cost of establishing the fund and for the tax collector’s ongoing administrative expenses.

The purpose of S-1893 is to potentially allow for a larger itemized deduction on a New Jersey taxpayer’s federal income tax return that exceeds the $10,000 cap on deductions for state and local taxes imposed by President Trump’s tax overhaul bill. It is unclear whether an individual’s potential tax savings resulting from S-1893 will pass muster with the Internal Revenue Service because the taxpayer’s donation may not qualify as a charitable donation under the Internal Revenue Code. Accordingly, there is the potential for back taxes, penalties and interest at the federal level if the taxpayer’s deduction taken pursuant to S-1893 is not accepted. In light of this uncertainty it is best to contact a tax or accounting professional for advice with respect to the application of S-1893.

New Jersey Court Recognizes ‘Wrongful Prolongation of Life’ Cause of Action

New Jersey’s Advance Directive for Health Care Act (the “Act”) guarantees the right of an individual to make decisions regarding his or her healthcare.  But what happens if those decisions and wishes are ignored?  Morris County Superior Court Judge W. Hunt Dumont recently recognized a cause of action for wrongful prolongation of life against a Defendant hospital, doctor, and several nurses, for their alleged failure to follow a patient’s healthcare wishes.

Suzanna Stica was admitted to the hospital after complaining of breathing problems. She had signed “do not resuscitate” and “do not intubate” orders ahead of her admission.  Despite those orders, the Defendants resuscitated Ms. Stica after she went into cardiac arrest. She lived an additional six months before she ultimately passed away.  During that time, Ms. Stica was intubated, had difficulty breathing, was confined to a wheelchair, suffered from depression and dementia, and had trouble speaking.

The court explained Ms. Stica’s wishes were “simply ignored” by the hospital and its staff.  “Ms. Stica lived an additional six months in a diminished condition that included unwanted pain and suffering,” and the Defendants “violated Ms. Stica’s fundamental right to refuse unwanted medical treatment.”

The court held that its ruling was a logical extension of the New Jersey Supreme Court’s 1979 ruling in Berman v. Allan, which recognized the doctrine of wrongful birth.  New Jersey, the court explained, has taken a leadership role in recognizing patients’ rights regarding treatment options.  These rights include “a well-established right to reject lifesaving treatment.”

By denying the Defendants’ motion for summary judgment, the court extended a legal cause of action against those who ignore a person’s decisions regarding his or her healthcare.  To ensure that your healthcare decisions and end-of-life wishes are properly integrated into your estate planning instruments, or if you have any questions regarding this recent ruling, we encourage you to contact the Firm.