Recent Blog Posts

• What Happens if I Die Without a Will? If someone were to die without having a will in place, a common misconception that is often times mentioned is that the deceased’s assets are turned over to the State. This is completely false. Instead, state law determines who will receive the deceased’s property. Each state has a statute (the intestacy statute) that provides who the people are that are the closest relatives to the deceased, and those relative receive the deceased’s estate.   New Jersey law is as follows: For a single person: To the person’s descendants If there are no descendants, to the person’s parents If there are no descendants or parents, to the descendants of the person’s parents If there are no descendants, parents, or descendants of parents, one-half to the paternal grandparents, or if they are also deceased, to their descendants; and the other one-half to the maternal grandparents, or their descendants If there are no descendants of grandparents, to stepchildren ....
• Protective Arrangements: Guardianships and Conservatorships Paul Norris, a colleague of mine here at Stark & Stark, and I authored the following blog. Together, we wanted to make those who are currently caring for an aging loved one aware of the various options available to them as alternatives to the more traditional Power of Attorney.    It is an issue that most of us will be confronted with at some point in the future; how best to care for an aging loved one. People commonly think a Power of Attorney is the only method by which to manage another person’s affairs who may no longer be competent to do so. There are other forms of protective arrangements, however, under New Jersey Law which provides a person who is to serve in a  fiduciary role with substantial latitude to provide care for their loved one. These arrangements differ in nature as to the scope of the supervisory role. The two most common forms of protective arrangements under New Jersey Law are Guardianships and Conservatorships.   ....
• Stark & Stark Attorney Featured on WHYY's Newsworks Tonight Program Noah A. Schwartz, member of Stark & Stark’s Business & Corporate Group in the firm’s Marlton, New Jersey office, will be featured on this evenings edition of WHYY’s Newsworks Tonight. The program will air from 6:00 – 6:30 PM on station 90.9 FM. Mr. Schwartz joins host Maiken Scott as they discuss a common issue facing many families after the death of a loved one: do we have to pay bill collectors looking for money after our family member has passed away? Mr. Schwartz discusses special considerations offered after the loss of a spouse, child and parent. **Updated September 28, 2011 - 8:40 AM** In case you missed last night's edition of Newsworks Tonight with Mr. Schwartz, you can listen to the full program online here. ....
• Attorney Fees in Probate Court Actions Are Not Permitted on Proceeds on Life Insurance Policies or Pension In probate court actions, the award of attorney fees to a contestant of a last will & testament, is within the discretion of the Court. Except in a "weak or meretricious" case, Courts will generally allow counsel fees to both sides.   However, when a case involves non-probate assets, such as life insurance policies and pension proceeds, attorneys fees will not be paid out of these assets as they pass by operation of contract and property law and are outside of the decedent's estate.   In the Matter of the Estate of John Oliva, Jr., Deceased, a case decided by the Superior Court of New Jersey, Appellate Division, on August 25, 2011, the attack was on assets resulting from the decedent's life insurance policy and pension. The Court found that there was no authority for finding that such assets were part of the probate estate available to satisfy an award of counsel fees. In addition, the Court found that there could only be an award of counsel fees against an ....
• Future Rights Under a Will May Be Given Away by Contract In the Matter of the Estate of BELVA PLAIN, Superior Court of New Jersey, Chancery Division, Probate Part, Essex County, Docket No. ESX-CP-0048-2011, decided on July 22, 2011, the question was raised as to whether a child of a decedent was precluded from challenging the Last Will and Testament of his mother by his execution of a settlement agreement eighteen years before her death.  In that settlement agreement, the son covenanted not to challenge his mother's documents after her death.   The son filed a complaint seeking to invalidate his mother's will on the basis that she lacked the testamentary capacity to make the will or that the will was the result of undue influence.  The family history of the parties was one of considerable animosity and extensive litigation. Prior to the mother's death, she found it necessary to seek multiple restraining orders against her son.  At one point, the restraints barred her son from entering the municipality where his mother ....
• Will A Court Award Counsel Fees to a Plaintiff That Was Unable to Prove Lack of Testamentary Capacity or Undue Influence? In a recent case decided by the Appellate Division of the Superior Court of New Jersey on June 17, 2011 (In The Matter of the Estate of Blanche T. Riordan, Deceased, Docket  No. A-4123-09T4; Docket No. A-4464-09T4; Superior Court of New Jersey, Appellate Division), the Trial Court concluded that the decedent had testamentary capacity when she executed her will and that the will was not the product of undue influence.    The Plaintiffs argued that the Trial Court's finding that the decedent possessed the requisite testamentary capacity to execute a will was not supported by sufficient, credible evidence and rather, "was so far wide of the mark and contrary to competent evidence in the record as to amount to a manifest denial of justice.” The Appellate Division found the findings of the Trial Court on the issues of testamentary capacity and undue influence, though not controlling, were entitled to great weight since the Trial Court had the opportunity of seeing ....
• ERISA: Exhausting Remedies As a general rule a party must exhaust its administrative remedies before it can invoke the jurisdiction of the courts. However, the Third, Fourth, Fifth, Sixth, Ninth, and Tenth Circuits have all held that exhaustion is not a prerequisite to suits alleging statutory ERISA violations. One potential administrative remedy that employees should consider is filing a complaint with the US Department of Labor, Employee Benefits Security Administration. ....
• Withdrawal Liability & Enforcement of Contribution Obligations Under ERISA Before Congress enacted the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), “many employers were withdrawing from multiemployer plans because they could avoid withdrawal liability if the plan survived for five years after the date of their withdrawal,” and Congress was concerned “ ‘that ERISA did not adequately protect multiemployer pension plans from the adverse consequences that result when individual employers terminate their participation or withdraw.’ ”   The MPPAA was therefore enacted and was “designed ‘(1) to protect the interests of participants and beneficiaries in financially distressed multiemployer plans, and (2) to encourage the growth and maintenance of multiemployer plans in order to ensure benefit security to plan participants.’ ”   To accomplish these goals, the MPPAA “requires that a withdrawing employer pay its share of the plan's unfunded liability,” which ....
• ERISA's Anti-Cutback Rule ERISA section 1054(g)(1), provides in relevant part: “The accrued benefit of a participant under a plan may not be decreased by an amendment of the plan ….” The anti-cutback rule is a “crucial” aspect of ERISA's protection of pension benefits. In light of the importance of the anti-cutback rule and in order to avoid work-arounds that curtail accrued benefits by means other than formal plan amendments, courts have deemed actions to be violative of the anti-cutback rule even when there had not been a formal amendment of a pension plan.    Treasury regulations implementing the anti-cutback rule make the point explicitly: a pension plan may not deny a protected benefit “directly or indirectly, through the exercise of discretion ....”  Moreover, plan participants are entitled to notice whenever a plan amendment is seriously considered or enacted.    Sometimes a violation of the anti-cutback provision will give rise to a ....
• ERISA Funding Requirements Each plan subject to minimum-funding requirements must maintain a minimum-funding standard account and meet a minimum-funding standard. A funding standard account consists of charges for normal costs, amortization costs and funding deficiencies, offset by credits for amounts contributed by the employer, amortization gains, waived funding deficiencies, and the excess of any debit balance in the funding standard account over any debit balance in the alternative minimum standard account, if any.   All costs, liabilities, rates of interest, and other factors under the plan must be determined on the basis of actuarial assumptions and methods that must be reasonable in the aggregate and in combination offer the actuary's best estimate of anticipated experience under the plan. A plan meets the minimum-funding requirements only if, at the end of each plan year, the account does not have an accumulated funding deficiency. ....
• Fiduciary Duty Under ERISA ERISA establishes the fiduciary responsibilities applicable to employee benefit plan administrators and sets out certain fiduciary standards by which trustees' actions will be measured, including the mandate that trustees are to discharge their duties solely in the interest of the plan with the care, skill, and diligence which a prudent individual would use in similar circumstances in accordance with the instruments governing the plan and through diversifying the plan's investments.   Supplementing these fundamental standards prohibits specific transactions. A plan fiduciary may not cause the plan to engage in a transaction that constitutes a loan, sale, or other transfer of assets to a party in interest, or the improper acquisition of employer security or real property. The statute also forbids a fiduciary from dealing with assets of the plan in his own interest or receiving consideration from any party dealing with the plan in a transaction involving plan assets; nor may a ....
• The Employee Retirement Income Security Act As a long-term employee, it is important to know what is happening with your pension plan, but more importantly, what could happen.  There is an enormous body of law that covers retirement plans, however, given its convoluted nature, a simple question or issue may require a lengthy and complex answer.  Nonetheless, below, and following in later posts, is a condensed discussion of the general law and some of the more prominent issues that arise in the context of pension plans. The Employee Retirement Income Security Act of 1974 (“ERISA”), established a comprehensive regulatory and remedial scheme designed with a curative aim to protect individual pension rights and is liberally construed to safeguard the interests of fund participants and beneficiaries and to preserve the integrity of fund assets.  ERISA's policy is to protect the interests of employee-benefit plan participants and beneficiaries, by requiring the disclosure and reporting to them of financial ....
• Pension Protection Act of 2006 On August 17, 2006, President Bush signed into law the Pension Protection Act of 2006 (the “PPA”).  The PPA establishes new funding requirements for defined benefit pensions and included reforms that affect cash balance pension plans, defined contribution plans, multiemployer plans and deferred compensation plans for executives and highly compensated employees.  However, as it relates to multiemployer plans such as union pension plans, most of the funding requirements for multiemployer plans that were in effect before enactment of the PPA remain in effect under the new law.  The PPA simply establishes new requirements for multiemployer plans that are in financial distress as a result of being significantly underfunded.  Essentially, the PPA abrogates certain anti-cutback rules and establishes a new set of rules for improving the funding of multiemployer plans that are deemed to be in “endangered”, “seriously endangered” or ....
• Courts Will Not Create a Will or Trust Where None Exists What happens when an individual hires an attorney to engage in estate planning but never signs a will?  Will the "probable intent" of that individual be carried out or will it be ignored because the will was never signed?  The simple answer is that a failure to sign a will can have disastrous results. On December 29, 2010, in the case of "In The Matter Of The Trusts To Be Established In The Matter Of The Estate Of Margaret A. Flood, Deceased", the Appellate Division of the Superior Court of New Jersey found that probable intent could not be carried out if there was no signed will and an individual dies intestate. In the Flood case, the decedent, who was a widow, had four children.  Two of her children were disabled and were receiving benefits from supplemental security income and Medicaid.  One was receiving benefits from the Division of Developmental Disabilities (DDD).  The decedent was concerned about protecting any inheritance that she ....
• Estate Tax Limbo: Here We Go Again! We’re just a few days away from witnessing something that was never supposed to be.  I have always cautioned client against expecting tax law to be logical.  In many areas of the law, the correct answer is the one that makes the most sense.  But tax law is driven by politics, not by common sense.   Even so, in more than 30 years of practicing law, I have never seen anything as absurd as what is happening now.  In 2001, a political compromise led to a temporary reduction in the federal estate tax.  Without the 2001 tax reduction, the amount exempt from federal estate taxation would have been $1,000,000.  The 2001 law temporarily increased that exemption through 2009, eliminated the estate tax for 2010 estates, and will reinstate the $1,000,000 exemption on January 1, 2011.   By its very nature, estate planning deals with uncertainty because so many life events will always be unpredictable.  How long will I live?  What health issues ....
• Repeal of the Federal Estate Tax - Here's the Bad News Under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the federal estate tax was repealed for 2010.  This repeal, however, is only effective through December 31, 2010.  The federal estate tax returns in 2011, at the rates and exemptions in effect in 2001 when EGTRRA was effective.     Although bills were introduced in Congress in 2009 to repeal the repeal, possibly to retain the $3.5 million estate tax exemption and 45% maximum tax rate in effect in 2009, nothing was accomplished.  So we have reached 2010 with less taxes on the books – why is this a bad thing?     First of all, the federal estate tax has not been permanently repealed, but only disappears for one year.  At midnight on January 1, 2011, it returns with a vengeance – with an exemption of only $1 million and a maximum tax rate of 55%.  In addition, most commentators and practitioners are unsure that the estate tax has truly ....
• Contesting a Will - State Court or Federal Court Lawsuits over the validity of a Last Will and Testament have become a common form of litigation around the country, as well as in the State of New Jersey.  Preparing an estate plan is something that is necessary and something that everyone should take care of while they are in an appropriate physical and mental state.   However, there are no rules as to when estate planning must be done.   Some individuals plan their estates well in advance.  Others wait until the last minute.  Some make sure that they frequently update their estate plans.  Others ignore what has to be done.  The result of late planning is often litigation. In addition to the act of getting estate planning done, many other factors play into the fact that so many probate estates end up in litigation.  As families grow away from each other, natural suspicions arise.  Did someone influence the preparation of the Will?  Was the maker of the Will competent?  ....
• Contesting a Will In New Jersey It is an eventuality that virtually all of us will face sometime during our lives, the loss of a loved one.  Whether this loved one is one of your parents, a sibling, a relative, or a friend, litigation may arise concerning the Probate of their Will in order to administer their Estate.  Estate litigation is often emotional, costly and is similar in the emotions it evokes to that of a divorce proceeding.  Often times, the Executor of the Estate may use the Estate’s assets to defend the Will.  On the other hand, a contestant of the Will must often pay their own counsel fees with only a possibility of being reimbursed by the Estate.  As such, a person challenging a Will should first evaluate the value of the Estate and their potential gain as compared to the expenses they may incur in seeking that relief .  In addition, a party should consider the emotional trauma which is very prevalent in Estate litigation.  An Executor of the Estate or ....
• Beneficiaries of Retirement Assets Rosemary D. Durkin, Shareholder in Stark & Stark's Trusts & Estates group, authored the article Beneficiaries of Retirement Assets: One of the most basic and important aspects to review, for the February 16, 2009 edition of the New Jersey Law Journal. Ms. Durkin discusses the steps that should be taken when reviewing retirement assets, and warns that the failure to review and update the beneficiary designations for a client’s retirement assets may result in the client’s estate becoming the recipient of the retirement assets.   You can read the full article online here. ....
• Claim of Undue Influence Resolved by Court Before Death of Testator A will is obviously prepared when a individual is still alive.  A will contest usually comes about after the individual dies.  However, a California Appellate Court has recently decided that when a conservator secures Court approval of an estate plan while the individual is still alive, any challenge to the will must be made at that time and not after the individual dies. In the case of Murphy v. Murphy, in the Court of Appeal of the State of California, First Appellate District, Docket No. A115177, a dispute arose between siblings after their father had a stroke and could no longer operate his business.  The son was concerned that his sister was exercising undue influence over the father, and, with Court approval, hired a conservator to wind down the business and deal with the father's assets.  At that time the son learned that his father's will left all assets to his sister and none to him. The conservator sought Court approval, through a ....
More