Why Are You Checking Email Today?

Business Succession Planning

Why are you checking email today? There could be many reasons. You could be addicted to your phone. You could be working. You might also own your own business, and when you own your own business you’re always on call. Which is why you’re checking your email today.

If you do own your own business, then you must wonder what will happen to that business if you pass away. Or you might be wondering what will happen to your business when you retire. I’ve been thinking a lot about these questions as I watch the show Rectify, on IFC.

Without going through the whole backstory (it’s a very complicated, powerful, amazing show), at some point we learn there is a family (tire) business that the owners go to great lengths to think about selling. The thing I loved about the show is that so many of the issues the owners had to face are exactly the same issue my clients deal with as they contemplate retirement (or an untimely passing).

For example, have you thought about:
– What happens when I retire?
– What will happen to the business if I pass?
– What happens if I get sick, or become disabled?
– If I have partners, what happens to my share of the business if something happens?
– What happens if my child divorces?
– What happens if I get a divorce?

We are about to witness the greatest wealth transfer in human history. There are about $30 trillion in assets that are about to be passed from one generation to the next, as the boomers retire and the next generation steps up. If you are in either category (thinking about retiring, or thinking about taking over a business), then you must assemble a great team of advisors and attorneys who can help you navigate the process. We can certainly help. If you have any questions about your business, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com or call 908-236-6457 today.

One last thing – stay tuned for an email later this week about three more events we are hosting with Rountable Wealth Management about the new tax changes under the Trump Administration. The first event in Franklin Lakes was a tremendous success, and we look forward to having you come to one of the events in your area!

Improper Estate Planning Reveals the Secret KFC Recipe!

Happy New Year! In the culinary world, a secret recipe is everything. For fast food giant KFC, the recipe for its chicken is so closely guarded that it sits in a 770-pound safe covered in two feet of concrete and monitored by motion sensors and video cameras. Seriously, it sounds like something out of a Mission Impossible movie!

Yet recently, as covered in a New York Times article, the company’s lip-smacking spice blend may have been revealed to the world via the last will and testament of Colonel Sanders’ second wife. It all started this past August when Jay Jones, a reporter for The Chicago Tribune, traveled to Corbin, Kentucky to write a piece about the town where the famous Colonel first made his fried chicken.

Mr. Jones set up a meeting with Colonel Sanders’ nephew, Joe Ledington. At some point during the meeting, Mr. Ledington pulled out an old scrapbook that contained pictures and family memoirs. Allegedly, the scrapbook was the property of Claudia Ledington, Colonel Harland Sanders’ second wife who passed away in 1996. Tucked away in the back of the scrap book was Claudia’s last will and testament. In the last pages of the will was a handwritten recipe for a spice rub. Mr. Ledington claimed that the 11 spices and herbs listed in the last will were in fact the secret recipe locked up tight in a safe weighing nearly 800 pounds.

Yum Foods, the parent company that owns KFC, claims the recipe isn’t accurate. The exact spice blend from Claudia Ledington’s last will and testament is as follows and should be mixed with 2 cups of flower:

2/3 tablespoon salt
1/2 tablespoon thyme
1/2 tablespoon basil
1/3 tablespoon oregano
1 tablespoon celery salt
1 tablespoon black pepper
1 tablespoon dried mustard
4 tablespoons paprika
2 tablespoons garlic salt
1 tablespoon ground ginger
3 tablespoons white pepper

Now, from an estate planning perspective, a couple of things can be learned. First, you can bequeath amazing recipes to your descendants. However, if you have a recipe that may be responsible for hundreds of franchise restaurants and billions of dollars in revenue, you may want to update your estate plan. In 1996 when Claudia Ledington passed away, KFC was already a successful brand and household name. Instead of leaving the original spice rub on a hand-written note in the back of a scrap book, she may have wanted to rewrite and seal the document in a safe or safety deposit box.

Second, if you do have a secret recipe to leave in your safety deposit box, it’s never a good idea to leave your last will and testament in your safety deposit box. It’s like leaving the key to the deposit box in your deposit box.

Whether you need help leaving Grandma’s famous apple pie recipe to your children or establishing a trust, it is in your best interests to contact an experienced estate planning lawyer. If you have any questions, please call us at (908) 236-6457, or email me at alec@bmcestateplanning.com.

More Help for Modest Estates in New Jersey

wills, estates, estate planning, what, to, leave, union, hunterdon, new jersey

For people of modest means, the estate administration process often adds legal and administrative expenses that serve only to reduce the amount of the estate that passes onto heirs. In addition to these hard costs, a lot of the heirs’ time and energy can be lost at a time when they are likely already grieving the loss of a loved one. It hardly seems worth it to process these modest estates.

Fortunately, the State of New Jersey recognizes the burden that estate administration can place on people of modest means and thus always allowed intestate estates valued at less than $20,000.00 to pass to a surviving spouse or partner without the need for administration. An intestate estate is an estate where there is no Will.

Recently, the New Jersey State Legislature passed two new laws which expand upon this policy. First, the amount that can be transferred to a surviving spouse or partner has been increased to $50,000.00. This adjustment will allow a much larger number of estates to pass without administration and should serve to alleviate unnecessary stress on many New Jersey families.

If the decedent does not have a surviving spouse or partner, the maximum amount that could pass was previously $10,000.00, but that amount has also been increased and is now $20,000.00.

The second law assists some of the State’s least financially secure individuals — nursing home patients. Under this new law, nursing homes are required to work with residents to help them designate a beneficiary who will be entitled to any personal needs allowance funds that amount to $1,000.00 or less. The named beneficiary will usually be able to take these monies without administration.

If you have questions regarding your eligibility, or the eligibility of a loved one, under the provisions of either of these laws, consult with a lawyer as soon as possible. For residents of New York and New Jersey seeking estate planning assistance, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com, or call 908-236-6457.

N.J. Estate Tax versus Federal Estate Tax

Inheritance-Tax-Estate-Tax-New-Jersey-Estates-Trusts-Wills-Probate

If you live in New Jersey and are planning your estate, you may be wondering how the N.J. and federal estate taxes will affect your heirs. Unfortunately, N.J. has both an inheritance tax and an estate tax. Furthermore, the state’s estate tax exemption limit is quite low when compared to the rest of the states in the union.

State exemption limit

The exemption limit in New Jersey as of 2016 is $675,000. If you are the executor of a Will, and the value of the gross estate is more than $675,000, you will have to file a New Jersey estate tax return. However, keep in mind that there are various deductions such as funeral expenses, attorney’s fees, and income tax bills that may reduce the estate value below the exemption limit.

Federal exemption limit

The federal exemption limit as of 2015 is $5.43 million per person, which is up from $5.34 million in 2014. This means that a married couple in 2016 can give away $10.86 million tax free. It also means, that unless the decedent’s gross estate is valued at more than $5.43 million, it won’t have to pay the federal estate tax rate of 40%.

What is meant by “the value of the gross estate”?

Many people make the mistake of assuming the word “estate” refers only to a house. In fact, it encompasses much more. In order to calculate the total value of a decedent’s estate, numerous assets are gathered and assessed, including:

  • New Jersey real estate;
  • Vehicles and other items of personal property;
  • Securities and investment accounts;
  • Funds from retirement account;
  • Business interests such as a sole proprietorship, limited liability company, or small corporation; and
  • Bank accounts and certificates of deposit.

Also keep in mind that any property you leave to your spouse or civil partner is exempt from the NJ estate tax.

Comprehending legal information after losing a loved one can be difficult and frustrating. An experienced attorney can explain estate planning to you in an easily accessible manner so that you and your family can move on with your lives. For more information on estate planning in Union and Hunterdon Counties, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com or call 908-236-6457 today.

Have You Seen Prince’s Will?

Prince (Rogers Nelson) died last week (April 21, 2016). There have been endless articles about the music legend, ranging from his love of religion to how his eccentricities made him a global music phenomenon.

As a kid growing up in the 1980s, I was a Prince fan. He was such an odd character, and his music was so different, that it is hard not to feel a sense of loss from his passing.

But that’s the fan perspective. From the estate planning perspective, things are about to get very interesting. Prince’s younger sister, Tyka Nelson, said in a court filing on Tuesday (April 26, 2016), that Prince died without a Will. Ms. Nelson asked the court to appoint the St. Paul-based Bremer Bank temporary authorization over Prince’s affairs, calling the situation “an emergency.”

I personally have a hard time believing that Prince died without some Will or Trust. Prince was known to be a savvy businessperson, and the thought of his leaving his estate to the whims of Minnesota intestate law are unthinkable.

In 2015, Prince’s estate made $55 million. He owned properties in Minnesota estimated to be worth $27 million. Moreover, Prince has a massive collection of songs that he never released. Most estimates have Prince’s estate valued over $100 million, but those are early estimates. It could be worth MUCH more.

Who is going to handle all of this? Who is going to sift through all of Prince’s unreleased songs and decide which ones to release? Who is going to manage the royalties from his current songs on the radio? Who is going to manage the upkeep of his properties? How could he not have planned for this eventuality?

Under Minnesota intestate law (i.e., the default estate laws for Minnesota when there is no Will), all of Prince’s assets would be divided between his sister and his half-siblings, assuming he was not married and had no children. That’s a huge windfall for people who might not be used to vast sums of wealth, and a situation that is ripe for conflicts and lawsuits. I’ve seen people fight over $50,000 as much as they do over $500 million. And they will fight, assuming there was no plan in place for them. Prince should have created trusts for his family to protect them from themselves.

This same principle holds true for those who live in New Jersey and New York. Start asking yourself: do you have up-to-date estate documents? What will happen to your assets when you’re gone? What will happen to your intellectual property after you’re gone? Will your children inherit a windfall because you have no trusts in place to protect them from themselves?

Prince died at 57. He was young. I can’t believe he didn’t have a Will or Trust. But if the rumors and court papers are true, we could be in for a long fight ahead. Stay tuned.

If you have any estate planning questions, please feel free to call us at (908) 236-6457, or contact alec@bmcestateplanning.com.

By at .

1 2