Wealth Transfer for High-Asset New Jersey Families
It's important to ask the right estate planning and administration questions in order to transfer wealth to your family effectively.

October 27, 2011 /24-7PressRelease/ -- You worked hard your whole life, saved and invested wisely, and are now in a position to pass along significant assets to the next generation. What estate planning and administration questions should you be asking to make the transfer of wealth to your family happen smoothly and securely, even in a time of economic uncertainty?

Federal Gift Tax Exclusion

For one thing, you'll want to consider the implications of the increase in the federal gift tax exclusion enacted in December 2010. There is a limit on the amount of taxable gifts that someone can make while still living without having to pay gift tax. The December 2010 legislation increased this exclusion from $1 million to $5 million.

The exclusion is scheduled to go back down to $1 million, however, at the end of 2012, unless Congress decides otherwise. In order to make strategic use of the $5 million exclusion, many business owners and high-net-worth individuals are thinking about making substantial gifts to children and grandchildren this year. The goal would be to obtain maximum advantage from the increased gift tax exclusion amount.

For New Jersey families, there is also the question of state estate and inheritance taxes to consider. This is because New Jersey is one of only two states in which there are both estate and inheritance taxes assessed at the state level. This is something you'll want to discuss with a New Jersey estate planning lawyer.

Gift and inheritance tax questions are only some examples of how intelligent wealth transfer decisions depend on many factors, including the status of current legislation.

Unique Concerns of Surviving Spouses

Another example of the delicacy of wealth transfer decisions is the question of a disclaimer by a surviving spouse of interests in property that was jointly owned with the spouse who has passed away. Subject to regulations issued by the Internal Revenue Service, a surviving spouse who jointly owned an asset may be able to disclaim some or all of his or her interest in that asset.

The decision must be made, however, within nine months of the decedent's death. And various circumstances regarding the status of the asset have to be present. This often means that the surviving spouse must not have accepted any advantages from the asset in his or her lifetime.

Whether the execution of this disclaimer would be a prudent decision in your case is an issue you examine closely with the help of your attorney. Disclaimer may be beneficial for the surviving spouse or it may not be, depending on how it fits into an overall estate and tax planning strategy.

Estate Administration Issues

When someone dies, it usually triggers a series of decisions whose affects can ripple across the waters of a family's emotional life for decades. This starts, as it should, on the emotional level, with the challenges of grief and loss. Funeral planning is often a forum where families begin to deal with these deep issues.

Regarding the transfer of wealth, often someone in the family will call a lawyer and ask, "What do I do now?"

How smoothly the process goes from that point on depends considerably on how careful the deceased person was in crafting an estate plan. The execution of a will that names an executor of the estate, the creation of trusts, and other elements of a sound estate plan should already be in place.

And then there are the inescapable practical steps that are necessary to begin the estate administration process. For the executor or surviving spouse, these include things like getting the death certificate, securing the house, gathering the insurance proceeds and other assets. It often helps to have a checklist, as the responsible person goes about these tasks.

Your Family's Unique Circumstances

The wealth transfer issues discussed above are intended as a place to start in strategizing about best to accomplish your specific goals. Besides your attorney, you may have other professionals involved, such as an accountant or an investment manager. There is no substitute, however, for the central role that a trustworthy attorney can play in developing sound wealth transfer plans and putting them into action.

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