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My mom named me her power of attorney by signing a document I printed from the internet. She now has Alzheimer’s disease. Her Bank won’t honor the power because it doesn’t permit me to conduct banking transactions. What do I do?

We can accomplish many activities online.  That doesn’t mean it’s the smart or right thing to do.  That’s particularly true when it comes to legal matters.

Unfortunately, since your mother now has Alzheimer’s disease it is likely she does not have the mental capacity to sign a proper power of attorney after receiving legal advice.  This means that you will need to obtain guardianship to make financial and medical decisions for her.  A comprehensive power of attorney, prepared by a lawyer, can be executed in a week or, under some circumstances, in less time.

To the contrary, a guardianship requires legal documents to be filed in court with the appointment of a guardian occurring three to four months after an initial meeting with an attorney.  A verified complaint containing your mother’s assets, income and liabilities and two doctor’s reports need to be submitted to the court.  Your mother will need to be examined by these doctors.  Your siblings can object to your appointment as guardian which could further delay the process.  The court will also appoint an attorney to represent your mother’s interest.  Both attorneys’ fees are paid from your mother’s assets.

In short, significant expense and time can be saved by having a power of attorney properly prepared by an estate planning lawyer when you are still mentally and physically able to do so.  Printing out legal documents online without legal advice and hoping they meet your objectives is a recipe for disaster and uncertainty, exactly what an experienced estate attorney will help you avoid.

Nicholas Giuditta is a trusts and estates attorney in Westfield.  He prepares estate plans for high net worth individuals and regularly represents executors and administrators of estates.  Find out how your family can benefit by contacting Mr. Giuditta at 908-232-0099 or visit his website at www.giudittalaw.com.

The questions and answers by Nicholas A. Giuditta, III, of the Law Office of Nicholas A. Giuditta, III, provided herein are for general information purposes only.  The information does not, nor is it intended to, constitute legal advice and is not provided in the course of an attorney-client relationship.  Online readers should not act upon this information without discussing the particular facts of their matter with an attorney.

My aunt died and left me $25,000 in her Will. The Will gave her son $200,000. How come I have to pay a New Jersey inheritance tax and her son does not?

In New Jersey, any individual may leave an unlimited amount of money to their children and not pay inheritance tax. However, if a person leaves money to individuals other than their spouse, children, grandchildren, parents or any other lineal descendants, an inheritance tax applies. Lineal descendants are known as Class A beneficiaries who after 1985 were no longer subject to our state’s inheritance tax. A niece or nephew is known as a Class D beneficiary and is subject to a 15 percent tax on any inheritances up to $700,000. Thereafter the tax rate is 16 percent.

A brother or sister (sibling) of a decedent who inherits is known as a Class C beneficiary. The sibling of a decedent is entitled to an exemption on the first $25,000 of property inherited. Thereafter the sibling beneficiary is subject to an inheritance tax rate of 11 percent on any amount up to $1,100,000 with a progressively increasing rate on additional amounts.

The New Jersey inheritance tax is different from the New Jersey estate tax. The applicability of the inheritance tax depends on the relationship of the beneficiary to the deceased. The question of whether a New Jersey estate tax will apply depends on the value of the estate. Amounts in excess of $675,000 are subject to this tax. The New Jersey estate tax will be discussed in a subsequent posting.

Nicholas Giuditta is a trusts and estates attorney in Westfield. He prepares estate plans for high net worth individuals and regularly represents executors and administrators of estates. Find out how your family can benefit by contacting Mr. Giuditta at 908-232-0099 or visit his website at www.giudittalaw.com.

My mother passed away. I am the sole beneficiary of her estate which is worth approximately 1.3 million dollars. Am I subject to a New Jersey estate tax?

Estates in excess of $675,000 are subject to the New Jersey estate tax.  When a child inherits assets in excess of $675,000 from a parent, a New Jersey estate tax applies.  New Jersey has the notorious reputation of having the highest State estate tax in the country.  By comparison, a Federal estate tax does not apply in 2013 to estates that are less than 5.25 million dollars.

The property that is included in the determination of whether an estate is subject to a New Jersey estate tax includes real estate, bank accounts, brokerage accounts, life insurance policies, annuities, bonds, stocks and just about anything owned by the decedent regardless of where it is located.  The tax applies to assets owned by the decedent individually or jointly with another person.  The estate tax rate can be as low as 4 percent or as high as 16 percent, depending on the value of the estate.  Some estate expenses, such as the funeral bill, executor commissions and attorney’s fees, can be taken as deductions in the estate tax return thereby reducing the tax owed.

If you are an executor of an estate subject to the New Jersey estate tax, you should speak with an estate administration attorney who regularly deals with preparation of estate tax returns and can provide you with expert advice and guidance.

Nicholas Giuditta is a trusts and estates attorney in Westfield.  He prepares estate plans for high net worth individuals and regularly represents executors and administrators of estates.  Find out how your family can benefit by contacting Mr. Giuditta at 908-232-0099 or visit his website at www.giudittalaw.com.

I am my father’s power of attorney. Can I do his Will for him?

As your father’s power of attorney, you have very broad authority.  However, it does not allow you to write a Will for him.  Anyone who is 18 years of age, and of sound mind, can make their own Will.  It is not something the testator (a person making a Will) can delegate to anybody, including a power of attorney.  The making of a Will requires a private consultation between your father and his attorney.  Neither you as the power of attorney nor any other potential beneficiary under his Will should be present in that conference with the attorney.  It is important that your father provides his attorney with his wishes and that there be no suggestion whatsoever of coercion by you or anyone else that your father may choose to benefit in his Will.  Such a conference and subsequent execution of the Will outside your presence as power of attorney serves to protect your father and you in your role as power of attorney.  As power of attorney you do not want your siblings, or other beneficiaries in your father’s Will, to allege that you exercised undue influence in regard to choices he makes in his Will.

In short, while you have broad authority as your father’s power of attorney, his testamentary wishes must be his own and cannot be provided or prepared by you as his power of attorney.

My mom has Alzheimer’s disease. Can she give me power of attorney?

A person who makes a Power of Attorney (principal) gives another individual (commonly called the power of attorney or agent) the ability to act on their behalf.  The authority of the agent can be broad including signing the principal’s checks, withdrawing money from bank accounts, buying and selling real estate or gaining access to the principal’s safe deposit box at a bank. As a result, the principal must understand the consequences of what she is doing.  If your mother has advanced Alzheimer’s disease, it is very likely she does not have the mental capacity to sign a document naming you her power of attorney.  If there is a question about her capacity, a lawyer should meet with her and then, if required, have a doctor provide a letter stating his opinion as to whether your mother is sufficiently competent to understand the consequences of giving you power of attorney.

The prevalence of Alzheimer’s disease and other cognitive impairments in the elderly population is a compelling reason why a person should make a power of attorney when they are young.  Failure to prepare a power of attorney can lead to the much more time consuming and costly process of a family member having to obtain guardianship through the courts as to an ailing relative.

How do I get my sister to leave a house owned by our mother's estate?

Let’s say your mother died in 2010. Your father died before her. They had three children. The mother’s Will divided her estate equally between their kids. The older sister, Gail, is Executrix and has been living in the house since her mother’s death and won’t leave. Gail’s siblings want to sell the house so they can realize their inheritance.

The above scenario is common. Many times one heir will not leave the house owned by the last surviving parent. The other heirs want to receive their cash inheritance by selling the home. What can the other children do?

If the child living in the house refuses to sell the house after amicable attempts are made to resolve the matter, the other children can file an action in court to compel the resident heir to leave the property and sell the house. This is commonly called a partition action which can be instituted by way of an order to show cause in the Superior Court of New Jersey. This is a technical and complex process, but will ultimately result in the home being sold with its net proceeds being divided equally among the children. Gail’s refusal to leave the home is depriving her siblings of their inheritance and if she cannot afford to buy out their interest, the property must be sold to a third party.

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141 Elmer Street, Westfield, NJ 07090

Nicholas A. Giuditta, III, Attorney at Law

Phone: 908.232.2300

Fax: 908.232.9435