New Jersey Lawyer & Attorney : Stark & Stark Law Firm : New Jersey Law Blog

If Benjamin Franklin were still alive, his oft-quoted statement would likely have been: “In this world nothing is certain but death, taxes, and politics.”  The estate tax changes in the Economic Growth and Tax Relief Reconciliation Act of 2001 stand as a testament to the absurd results made possible when politicians are permitted to write tax law.  Tax law that are dictated by political agenda hurt everyone.

Although the 2001 changes altered the structure of the estate tax, they were temporary, leaving pundits certain that the law would be changed or made permanent before long.  They were wrong.  The law has remained unchanged for the past 7 years, preventing families from engaging in meaningful planning based on a reliable and predictable tax law.  The federal budget deficit makes it now unlikely that the changes will become permanent.

The absurdity for New Jersey residents is reflected in the chart below, which shows the effect of the 2001 estate tax changes on three estates:

The federal estate tax debate is unlikely to end.  It serves as a useful political tool, allowing opponents of the tax to demonstrate concern for its impact on family businesses and farms, while allowing supporters of the tax to point to repeal as yet another clash between the haves and the have-nots.  The only question remaining is whether the uncertainty will ever end.

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Rosemary D. Durkin, Shareholder and member of Stark & Stark's Trusts & Estates Group, will be a guest speaker at the October 23, 2007 and November 7, 2007 seminar, Estate & Wealth Planning for Women, presented by Merrill Lynch.

These seminars will focus on important issues women need to face when planning for retirement, addressing the financial well-being of their future generations, and providing sufficient income for a lifetime. Women live an average of 5-7 years longer than men, the average life expectancy for women is 80-years old, 80% of women will be responsible for their own finances and estate planning, and most women are unaware that without proper planning, up to 55% of their estate could go to the government.

Join hosts Susana Lugones and Katherin Romero, Financial Advisors from Merrill Lynch, and Rose Durkin in this free educational seminar.

While the seminar is free, dinner will be provided and a reservation is required. To register, please contact Susana Lugones at 866-243-4311 or by email.

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Steven Friedman, Chair of the Trusts and Estates group, authored Baby Boom Legacy: With Estate Taxes Likely to Fluctuate, Planners are Wise to Focus on Nontax Objectives for the February 5 edition of the New Jersey Law Journal.

You can read the article here.

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Timothy Duggan, Chair of the Bankruptcy & Creditor's Rights Group, authored You Can't Always "Trust" an Annuity for the January 15, 2007 edition of the New Jersey Law Journal.  The article discussed a recent case where annunities that did not qualify as trusts were included in a bankruptcy estate.

You can read the article here.

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Stark & Stark and Cowan, Gunteski & Co. will be presenting Securing Your Future Income: What You Need to do Today in Order to Insure a Healthy Revenue Stream from Your Practice.  The seminar will be held on January 30, 2007 at the Sheraton in Eatontown, New Jersey.

The presenters, Allen Silk, Chair of Stark & Stark's Business Law group, Donald Cowan, Managing Director of Cowan, Gunteski & Co., and Deborah Mathis, Principal of Cowan, Gunteski & Co. will cover such topics as succession planning, practice valuation and retirement planning.  

Download the seminar information here.

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In a recent decision in the Superior Court of New Jersey, Chancery Division, Bergen County (In the Matter of the Estate of Louis Spadaccini, Deceased), the Honorable Peter E. Doyne, reviewed the current case law dealing with "lack of testamentary capacity " and "undue influence" in probate litigation and will contests.

On the issue of whether an individual has the "testamentary capacity" to execute a will, Judge Doyne noted that the mental capacity of a testator is to be tested as of the time of the execution of the will. Gellert v. Livingston, 5 N.J. 65 (1950). The test of whether an individual has the necessary testamentary capacity to execute a will centers around whether the testator was able to comprehend and understand: the property he was about to dispose; the natural objects of his bounty; the meaning of the business in which he is engaged; the relation of each of these factors to the other and the manner of distribution that is set forth in the will. See, In re Will of Landsman, N.J. Super. 252, 267 (App.Div. 1999).

In addition to what the party claiming a lack of testamentary capacity must prove, the contestant usually has the burden of proving that there was a lack of capacity by clear and convincing evidence, In re Coffin's Estate, 103 N.J. Super. 1 (App. Div. 1968), as it is presumed that the testator was of sound mind and competent when a will is executed. Haynes v. First National State Bank, 87 N.J. 163, 175-176 (1981).

On the issue of "undue influence", Judge Doyne, citing the Haynes case, noted that undue influence is the "mental, moral or physical" exertion which destroys the "free agency of the testator" by preventing him "from following the dictates of his own mind and will and accepting instead the domination and influence of another." As in the case of testamentary capacity, the burden of proving undue influence falls upon the party claiming that there was undue influence.

However, of particular significance is the fact that the burden of proof will switch if it can be shown that a confidential relationship existed between the testator and beneficiary and suspicious circumstances are present.

These basic concepts and points of law are relevant to almost every will contest. Unfortunately, probate litigation usually involves fights among family members where the relationship has deteriorated over the years. When a loved one dies, some family members will have remained close with the decedent, and the relationship with others will have faded. Whatever the relationship, questions as to the disposition of a loved one's assets often present issues of capacity and undue influence.

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This week's New Jersey Legal Update podcast will discuss reasons why individuals should consult an attorney when creating and implementing an estate plan.

This week's New Jersey Legal Update is presented by Steven Friedman, Chair of the Firm's Trusts & Estates Group.

You can download the New Jersey Legal Update Podcast # 37 here.(9.7 MB)

Technorati Tags: New Jersey : Podcast : Estate Plan : Wills

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If a will has been admitted to probate by the Surrogate's Court, New Jersey Court Rule 4:85-1 allows a party four months to file a complaint to set it aside. However, if the complaint is not filed within the four month period, a party may seek relief under the "escape provision" of Rule 4:85-1 and file the complaint within a "reasonable time under the circumstances". Under section (f) of New Jersey Court Rule 4:50, this relief can only be secured where there are exceptional, extraordinary and compelling grounds for such relief.

In The Matter of the Estate of Florence Schifftner, Deceased, decided on April 25, 2006, the Appellate Division of the New Jersey Superior Court dealt with the issue of whether an inability to afford counsel constitutes "exceptional, extraordinary and compelling grounds" and therefore a reason to allow a litigant to attack the probate of a will after the four month period.

The plaintiff in the Schifftner case was seeking to overturn a judgment admitting the will of his late mother to probate. The will had been probated after due notice to the plaintiff and he did not file an appeal. The plaintiff argued that although he was aware of the will being probated, he was unable to take appropriate action as his did not have sufficient funds at the time to hire an attorney. The Appellate Division concluded that indigence, under the circumstances of this case, was not an "extraordinary" reason justifying relief. The Court noted that it was an unfortunate fact that many litigants were unwilling to obtain, or unable to afford, representation. The Court went on to say that pro se litigants are allowed the same protection afforded to represented litigants and pro se litigants are given the right to be heard. The Court held that counsel is only required when a litigant faces a "consequence of magnitude" such as a criminal prosecution that threatens actual incarceration or the loss of a fundamental constitutional right such as an interference with the parental relationship.

The Court went on to say that where the consequences are less severe, the failure of representation is not fatal. The possibility of losing a civil suit does not implicate the need to have counsel. The plaintiff in Schifftner, having filed his complaint to overturn probate of a will more than four months after probate, was therefore not allowed to use the Rule 4:50 "escape provision" based upon the fact that he could not afford to hire a lawyer during the applicable time period.

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This week's New Jersey Legal Update podcast is presented by Allen Silk, Co-Chair of the Business Succession Planning Group, and discusses the importance of succession planning for your business.

Most individual business owners do not have sufficient plans in place to address the many issues which will arise upon their death or severe disability. This podcast outlines the things that business owners should be thinking about now to ensure the smooth transition of their business should a catastrophic event occur.

You can download the New Jersey Legal Update Podcast # 26 here.(7.5MB)

Technorati Tags: New Jersey : Podcast : Succession Planning

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