The Biden Harris Administration’s new tax plan will likely affect those in higher-income households, which means you may need to make some adjustments to your financial legacy. Generally speaking, the sweeping changes to the tax code will aim to levy higher taxes on corporations and high-income households. It will also overhaul how wealthy families transfer assets to heirs. Whether or not his tax reform and economic agenda will be put in place is ultimately down to which party controls the US Senate. With a Biden 7 trillion dollar plan to rebuild the shattered COVID-19 American economy, it all comes down to two Senate runoffs on January 5, 2021, in Georgia.

The tax plan’s components include raising the top individual income tax rate from 37 percent to 39.6 percent. The plan also seeks to extend the 12.4 percent shared employer/employee Social Security tax capped at 137,700 to earnings over 400,000 dollars. Under a Biden Administration, the capital gains tax rate will rise to 39.6 percent for taxpayers with income over one million dollars. This rate hike is up from the current long-term capital gains rate of up to 20 percent for wealthy investors.

President-elect Biden is also proposing to overhaul taxes around wealth transfers. He would eliminate the step-up in basis to the date of death valuation of inheritable equity assets. Instead, any unrealized capital gains will become subject to taxation. If Biden has his way, there will also be a reduction in the amount an individual can transfer free of estate and gift taxes. The currently permissible 11.58 million dollars will be reduced to 3.5 million in bequeaths upon death and a cap of one million dollars in lifetime gifts.

Politically, if Democrats cannot regain control over the Senate, many of the aforementioned Biden Harris proposals will be untenable. Nevertheless, some portions of Biden’s tax and economic reform may garner support from GOP lawmakers. Senators like Marco Rubio (R-FL) and Mike Lee (R-UT) have, in the past, been in support of child tax credit expansion. This previous support will bode well for the Biden proposal for a temporary increase of the child tax credit to 3000 dollars for children under age 17 and a 600 dollar bonus for children under the age of six. There is also sentiment for raising the corporate tax rate, which Biden wants to increase from 21 to 28 percent if lawmakers work together to replenish federal coffers. Republicans find it easier to raise corporate tax than taxes on wealthier individuals.

Additionally, a closely divided Congress may find it more expedient to increase IRS funding to pursue larger, more monetarily beneficial targets. These targets might include corporations or high wealth individuals; rather than draft and pass new tax legislation, it will likely prove to be a contentious process. American taxpayers would also probably prefer this approach to a more dramatic income tax increase. According to the Taxpayer Advocate Service (an IRS agency watchdog), IRS appropriations and employee numbers fell by more than 20 percent between fiscal years 2010 to 2019.

The year 2020 continues to bring new and challenging uncertainties to taxation, retirement, and legacy planning. Biden tax reform plans may significantly impact how families approach wealth building and inheritable asset transfer with minimal tax consequences, particularly if a nearly divided Congress opts to use the power of the IRS as an expedient arm of the federal government for improved tax base revenues. In this case, all Americans must watch what proposals are enacted into law and make their adjustments accordingly to preserve their assets.

We help families plan to protect and transfer wealth on to their loved ones. If you have questions or would like to discuss your particular situation, please don’t hesitate to reach out.  If you’d like to discuss ways we can help, please  contact  our office at 973-226-0050
.

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What Is Duty of Care? 

Duty of care means that a motorist has the duty to operate his vehicle in a thoughtful and careful manner. If the driver did not operate his vehicle in this way, he will be determined to be negligent and the cause of another person’s injuries. For example, a person is negligent in a car accident if he does something that he should not have done. He can also be negligent if he didn’t do something that he should have done.

How Does Duty of Care Affect Car Accident Cases? 

In the court system, a car accident attorney in Fairfield NJ will use the concept of negligence to prove that the at-fault party is responsible for his or her client’s injuries. A motorist has the obligation to use care when driving along the public roads so that pedestrians and other motorists are not injured in a collision. If a driver does not assume the appropriate duty of care, he will be responsible for paying the medical expenses of those injured in a car collision.

In order to prove that a driver is responsible for a car collision, the injured party’s Fairfield NJ personal injury attorney must demonstrate that the at-fault motorist was negligent. This means that the Fairfield NJ personal injury lawyer can prove the following:

Other Duties of Care

The state also imposes other duties of care on motorists for the privilege of driving on the public roads. For example, motorists must not drive under the influence of drugs or alcohol, and they must obey all traffic laws. In addition to that, they are required to drive their vehicles with reasonable care. This means that they must not drive recklessly in rainy weather or while in heavy traffic.

Hire Us at the Law Offices of Faloni & Associates

If you have been injured in a car accident, the only thing that you need to do is hire us at the Law Offices of Faloni & Associates. You are within your rights to represent yourself if you decide to sue the at-fault driver, but our car accident attorney in Fairfield NJ has experience fighting for her clients in a court of law. Our attorney has ample experience investigating car accidents and gathering the evidence that she needs to demonstrate your claims to the court.

Filing a lawsuit is not always something that people want to do. Our Fairfield NJ personal injury attorney also has experience negotiating with insurance companies so that you can receive a fair settlement without having to enter into a courtroom.

Contact us today so that we can make you whole again.

The post What is “Duty of Care”? How Does It Affect Your Auto Accident Case? appeared first on Faloni Law Group.

The clearest choice on deciding how to leave property to your children is to divide everything equally. That is the straightforward choice when all your children are doing equally well.

But if not – if, for example, your son is a starving artist with mouths to feed and your childless daughter has made millions on Wall Street – the temptation is to leave more to him than to her.

That decision, however, can have consequences. There’s a good chance that your daughter might feel hurt. Favoring one child over another has symbolic meaning. You don’t want to leave behind disappointment and resentment.

Also, estate planning is about considering the long term. Even if your daughter has no children of her own now, she may have them in the future. If you leave her nothing, both she and her children will have nothing to keep your memory alive.

Moreover, these days anyone’s financial situation can take a sudden turn for the worse.  Illness, injury, or natural disaster can strike. Marriages can split. Investment decisions might fail. Assets can be lost or stolen. Credit may dry up. While hopefully none of these gloomy misfortunes will befall your daughter, it’s wiser to provide your daughter with some cushion.

If you still want to leave your son more than your daughter, sit down with your children and explain why you’re doing that. Even if your daughter might be unhappy to hear it, at least she would have less reason to blame your son later. And you never know. We have seen people in your daughter’s position freely agree. That love and generosity, on the more-advantaged child’s part, can make everybody happy.

If you’d like to discuss ways we can help, please  contact  our office at 973-226-0050
.

The post Is it Equitable to Split Inheritance Equally appeared first on Faloni Law Group.

People go through their lives believing that they will have a place in a loved one’s will, but if it turns out that they were not named in the will, this can be surprising and hurtful. The reason that this happened may have been because someone coerced the family member to leave someone out of the will, or the person was of diminished capacity, so he was unaware of what he was doing. In order to make either of these assertions, you will need to contest the will.

The importance of having a will cannot be understated. The following case will serve as an example of the reasons why:

A woman by the name of “Melita Jackson” died in 2006. She had a daughter with her husband, but the husband died in an accident. When the daughter married in 1983, Ms. Jackson wasn’t happy about it and decided to leave her daughter out of her will. Instead, she left all of her money to the RSPCA, the RSPB and Blue Cross. Her daughter had been a stay-at-home mother to five children since 1984. She and her husband mainly supported their family with government aid, and they do not own a home. The daughter contested her mother’s will so that she could receive support from her mother’s estate.

In 2007, the daughter received a portion of her mother’s estate, but the case is back in the news again because the court decided to increase the amount to one-third of the estate. This case is being called a “landmark case” because it interferes with a person’s right to do what she wants with her money.  

What Does this Mean? 

This case means that if the deceased left a relative out of his or her will, the court is going to be sympathetic to the wishes of the relatives. If the court finds that the relative should not have been excluded, the court is likely to allow the relative to inherit.

If you have been left out of a will, you would need to contest it. In today’s climate, it may be very likely that you could prevail in court, but you must consider this very carefully. Most likely, you are not going to be able to contest a will if you were not a family member.

If the deceased told you that he was going to put you in his will, write down everything you can remember about that conversation. Then, estimate how much money you believe the deceased meant to leave you. Come up with a high and a low estimate. If this amount isn’t enough to pay a will attorney in Fairfield NJ for a consultation, don’t pursue it.

The amount may be double the amount you would need to pay to consult with a Fairfield NJ will lawyer, but at the end, it may cost you much more than that. Fights that people have had over estates have cost more in legal fees than they received in an inheritance.

Contesting a Will

If you are choosing to contest the will, you will need to start by hiring a Fairfield NJ will attorney. You will need a Fairfield NJ estate planning lawyer to help you get a copy of the will. Then, you can explain the reasons why you want to contest the will to your estate planning attorney in Fairfield NJ.

Everyone has the right to decide where they want their money to go, but if your will attorney in Fairfield NJ says that you have grounds to contest the will, you might be able to win your case. If you were left out of a will and are prepared to contest it, contact us at the Law Offices of Faloni & Associates , and we will file a contest against the will.

The post I Was Left Out of A Will: What Do I Do Next? appeared first on Faloni Law Group.

Imagine this, your Mom and Dad bought a timeshare in a holiday resort and the resort agent suggested that they sign a deed leaving the share to their children, so that when the parents passed, the kids could continue to enjoy the property. It seemed like a good idea at the time.

Unfortunately, once Mom and Dad did pass, the children were shocked to receive demand letters from the resort charging them hefty annual maintenance fees.

Those fees typically start at around $1,000.00 a year and go up. Additional charges could be imposed for extraordinary events like hurricane damage. Routine annual hikes of as much as four percent could outpace inflation. At four percent, in ten years’ time the kids would be paying $1,477.00, an increase of around 48%!

And the kids would be liable for those fees, on and on into the future, regardless whether they actually used the property.

None of the kids wanted that obligation, so they simply ignored the demand letters. They then found themselves in a world of hurt, when the resort sued them and their credit reports were blackened.

The only way to unload this obligation is to get rid of the timeshare.

If you are caught in this dilemma, act promptly. You should pay the resort’s demands while contesting them, sending a protest letter along with payments. If your parents have left an estate, use estate money to pay the fees, not money from your own bank account. You must not use the share, or you may jeopardize your ability to escape from it. If you end up having to sue, you have only a limited time under state statutes of limitations.

The resort might have a resale program, but unfortunately many do not. The contract may say something about giving or selling the share back to the resort. Unfortunately, this may come along with additional fees.

Do not pay in advance for termination services, and you should not submit to threats.

It is highly advisable to hire your own local legal counsel to represent you. Of course as lawyers we would say that, but please, beware of online hypes that promise to sell your share or get you out of the obligation by “exit” services. This seems to be an area particularly attractive to outright scams, or enterprises that fail to deliver on promises.

If you do negotiate a sale or exit on your own, don’t sign anything without your own lawyer’s prior approval. Your lawyer will make sure that the deal really will work as a complete “renunciation of property.” That is, any agreement you sign must deed all of the real estate interest to the new owner or back to the resort, and it must expressly, completely, and immediately free you from the relationship with the resort as a release, termination, and cancellation of contract.

It’s too bad that a timeshare given with such good intentions can be a gift horse better looked at in the mouth.

If you have questions about a timeshare interest or any other property interest you own or may inherit, please give us a call. We would be honored to speak to you confidentially to see how we might help.  If you’d like to discuss ways we can help, please  contact  our office at 973-226-0050
.

The post Getting Rid of Your Costly Timeshare appeared first on Faloni Law Group.

Sadly, many of us have witnessed the slow and dehumanizing death by Alzheimer’s of friends and loved ones. In the final stages of this and other dementia diseases, there comes a time when the person can no longer speak, recognize loved ones, or move purposefully.

With that poor quality of life, many would choose to stop hand-feeding and hydration, and to allow the dying process to begin. However, long before that time arrives, the person in question has lost the capacity to make and to express that decision. If the person no longer has an effective way to be heard, institutions where such people are usually confined are legally and morally obligated to continue hand-feeding and hydration until the bitter end.

That end can come years and years later. A terrible characteristic of such diseases is that people may have lost all that made them whom they once were and, yet, they remain physically healthy enough to continue, in that absent state, for many years.

Existing health-care powers of attorney usually only rule out artificial nutrition and hydration, like feeding tubes and IV. Until recently, the documents did not include hand-feeding. Thus, despite the person’s health-care agent requesting otherwise, caregivers would be required to continue cajoling, persuading, and insisting that the person continue to be fed by hand. This process would rely on a primitive reflex in which touching the spoon to the corner of the person’s mouth would result in an involuntary opening of the mouth. This could be misinterpreted as a desire to eat, and the sad situation could drag on and on without any way to intervene.

In especially tragic cases, where the person’s swallowing reflex has become diminished, the person could aspirate food and fluid into the lungs, resulting in pneumonia.

Thanks to pioneering efforts by End of Life Washington , and End of Life Choices in New York, a new document has emerged to supplement existing health-care directives and to specifically address this issue. Where the person has become unable to feed herself, can no longer use the toilet, and can no longer move or speak or recognize loved ones, the person may have expressed, in this supplemental document, that hand-feeding be stopped – or that feeding be restricted only to foods that the person demonstrably enjoys. The document further requests that the person be kept comfortable and out of pain through careful medication and other measures to relieve any anxiety, agitation, or insomnia.

Especially when the dementia diagnosis is first made, and while the person still has the capacity to make and communicate health-care decisions, this supplemental health-care directive must be considered. Creating a video expressing these wishes is also a very good idea. That way, at a time when the person has become only a silent immobile presence in bed, caregivers can see the person as he or she used to be, expressing wishes while the person was still able to communicate them.

Please give us a call if you would like to talk about your wishes and how to create a legal document reflecting those wishes. If you’d like to discuss ways we can help, please  contact  our office at 973-226-0050.

The post What are Your Wishes for End of Life Care? appeared first on Faloni Law Group.

For most people, they dream of the day they can retire. The problem is that many do not move beyond dreaming to planning. Planning can be done no matter what your age, but experts encourage people to start as early as possible. Retirement planning can seem like a daunting endeavor for many people as they focus on day-to-day financial obligations. Many people have no idea where to start. A few simple questions can help people of any age plan for retirement.

What does retirement look like to you?

This is an essential question to ask when beginning to plan for retirement. A good starting place is to start jotting down your ideas and, if married, your spouse’s ideas for retirement. Maybe travel is in your plan. If not travel, then how do you plan to spend your time? Will you want to downsize your home? Many people find that the home where they raised their family is too large or more than they wish to maintain. Will you continue working? If so, how much do you wish to work. Part-time or contract work can give more flexibility while still providing a source of extra income.

What assets do you have?

This is the beginning of financial planning for retirement. Look not just at your bank account and retirement accounts, but also property you own. Other assets to consider are collections that have significant financial value. Also, take stock of other investments that will be used to fund your retirement.

How is your health?

Personal health can play a large factor in retirement planning. The first step is to make sure you are up to date on all of your health screenings and check-ups. Once your health has been evaluated, you can better assess your plans for retirement. Health can affect finances and quality of life in retirement. There is no better time than the present to evaluate lifestyle and, if necessary, improve health habits to improve your quality of life and extend it.

When should you take social security?

There is no easy answer to this question and it is really a case-by-case decision that an attorney or financial professional can help you make. In the most basic terms, waiting longer to take benefits will increase the monthly benefits you receive. However, for many, this is not an option. It is important to assess your expenses and make the most informed decision possible with help from informed professionals.

How can I cut expenses to save more?

This is an excellent question for people of any age to consider. Cutting expenses can provide for extra savings to throw into your retirement plan. Cutting expenses can also help when creating a budget for retirement. If you can cut in some categories, then you can reallocate to other categories in order to be able to live more comfortably in the future. Paying off debt also becomes more manageable when other expenses can be cut.

How do I need to plan for the unexpected?

There is never any guarantee that the retirement you plan becomes reality. Many unexpected events can and will arise in retirement. These events can put a financial strain on a family, so it is important to plan a contingency for these events. This also good time to talk family and think about future care needs. Good health today does not guarantee it in the future – in fact, the possibility of needing long term care increases with each year we grow older. Creating a plan that includes legal and financial considerations helps get all family members on the same page and can greatly reduce stress should the unexpected occur.

Considering these questions can help you to begin working on a retirement plan that will fit your needs in the future.  An attorney can also help you with the legal side of planning for retirement, especially when considering the possibility of needing long term care in the future. The destination (retirement) is easier when the roadmap is clear and you have a plan for bumps in the road.

If you have any questions about something you have read or would like additional information, please feel free to contact us. Please  contact  our office or call us at 973-226-0050.

The post Things to Consider While Planning for Retirement appeared first on Faloni Law Group.

Previously, in part one, we met Jim and Sandy. They are now 65 years old and reviewed their need for age-appropriate health care and decision-making documents.  We left off with the question, “How can Jim and Sandy take steps to prevent losing everything in the event their health fails?”

The costs of long-term care can be staggering.  Home health aides can cost, on average, $45,760 per year, based on care provided 44 hours per week.  Nursing home care on average is nearly double that – $80,300 per year for a semi-private room.

What are our chances of needing long-term care?  According to the Department of Health and Human Services, someone turning 65 today has a 70% chance of needing some type of long-term care services in their remaining years.  This means Jim and Sandy should be considering how they will pay for that care in the event one or both of them are part of that 70%.

Jim and Sandy’s choices include:  1) paying out of their own pocket for care, 2) purchasing long-term care insurance, 3) qualifying for government assistance programs, or 4) any combination of the first 3.

By planning early, before there’s a health care crisis, Jim and Sandy can take advantage of all three options, yet protect their home and any other cash or assets they wish.  This type of asset protection is done using a specially designed irrevocable trust.  Only a portion of Jim and Sandy’s assets would be transferred to the irrevocable trust, with the remainder either remaining in Jim and Sandy’s name, or held in a revocable trust with special provisions for the surviving spouse.

By transferring assets to an irrevocable trust, those assets would not be counted in the future (in most cases, after 5 years) if Jim or Sandy needed to qualify for government assistance to help pay for their long-term care.  If Jim or Sandy is a wartime Veteran, there are additional cash assistance programs available through the Veterans Administration that should be explored as another means to help pay for their care.

To round out the asset protection package, Jim and Sandy would also complete financial powers of attorney and health care advance directives along with living wills.  They would also explore purchasing an appropriate long-term care policy in the event one of them needed care sooner than expected.

By planning early, Jim and Sandy have tools in place to protect their home and other assets should one or both of them need care in the future – and there is a 70% chance they will.  Jim and Sandy have also lessened the emotional and financial stress placed on a family when a health care crisis does happen.  They’ve taken care of the heavy lifting with regard to their assets, so their family can just focus on what really matters – making sure they have the best care possible.

If you’d like to discuss ways we can help, please  contact  our office at 973-226-0050.

The post Legal Documents That Are Age Appropriate (Part 2) appeared first on Faloni Law Group.

Twenty years ago, when Jim and Sandy were 45 years old, they went on their first vacation without their kids since their wedding.   They had no planning documents in place, and had to scramble quickly to get a simple will and a power of attorney to make sure their kids would be taken care of should something happen to them.  They owned a home with a mortgage, and had very little in savings.

The will named a guardian for their minor children, and named a trustee to hold their children’s money in trust until they reached age 21.  The durable power of attorney only addressed basic financial issues, naming an agent to act in their place (paying bills, writing checks for the kids’ various activities) in the event they were unable to.  Jim and Sandy did not prepare a Living Will, or any type of document that named another person to make healthcare decisions for them if needed.  Their main focus was their children, and making sure the mortgage and other bills were paid if something happened to them while they were away.

Jim and Sandy arrived home from their trip perfectly healthy, and the documents they signed sat in a safe deposit box for the next 20 years.  Now age 65, Jim and Sandy are nearing retirement and have accumulated a nice “nest age” and just paid off their home.  However, they recently had a friend suffer a near-fatal heart attack and it was a sharp reminder to them of how precious life is.  The topic of their will from 20 years ago came up, and they both agreed it was time for an update.

Jim and Sandy now need documents that address their current age and status – near retirement with substantial savings.  Their durable power of attorney that worked for their purposes 20 years ago needs a major makeover.  Jim and Sandy now need to consider who will step in and make financials decisions on all of their matters if they are unable to because of incapacity.  Incapacity can result from a disease, like dementia, or it could come from a more sudden health event, like a heart attack or stroke.  As Jim and Sandy grow older, the possibility of a debilitating health event increases.  They have more assets than they did 20 years ago, including a number of online accounts that would need to be managed.  A “general” form is usually not enough to cover the complex issues that arise as we get older, and as we acquire more possessions.

This increasing possibility of a health crisis also sheds light on the need to have their medical wishes properly documented through a health care directive.  What type of life-sustaining measures should be undertaken for them?  Who will make health care decisions if they are unable to?  The natural choice is to choose the other spouse as agent, but what if the other spouse is unable or unwilling to act?   If Jim and Sandy haven’t designated their agent through proper legal documents, then a court may be left to decide for them – an expensive and sometimes lengthy process that can be very stressful on the family.

Another issue that is important to discuss is what type of care should be provided if Jim or Sandy need it?  Does Jim wish to stay home and receive care there?  If so, who should provide that care?  Do both of them want to transition to independent living at some point when keeping up a home and yard becomes too much?  If the conversation isn’t held while Jim and Sandy are healthy, then other family members and friends are left to guess what Jim and Sandy would have wanted.

As shown above, age-appropriate legal documents that address health care and financial decision-making are critical.  The other critical planning concern is what will happen to all of Jim and Sandy’s possessions if one or both of them get sick and need substantial care on a long-term basis?  Our next blog will address this issue:  How can Jim and Sandy take steps to prevent losing everything in the event their health fails?

If you’d like to discuss ways we can help, please  contact  our office at 973-226-0050.

The post Legal Documents That Are Age Appropriate (Part 1) appeared first on Faloni Law Group.