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IN THIS ISSUE
UNDUE INFLUENCE?
ARE YOU A LIVING
TRUST CANDIDIATE?
A SMALL BREAK FOR
SMALL BUSINESSES
ARTICLES OF INTEREST
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Most estate planning discussions are about the transfer of wealth to create a lasting legacy. Although this might be most important for passing on your assets, there remains a question that does not get quite as much attention as it is more personal and even harder to contemplate - the decision concerning the disposition of your body. Our recent blog discussed this, and I want to share parts with you.
Every January, estate planners from around the country meet in Orlando, Florida, for the Heckerling Institute on Estate Planning. This year, included among the discussions of tax strategies and business succession planning was a different topic, "Planning to Meet One's Maker: The Intersection of Religious Beliefs and Estate Planning." The discussion concerned religious considerations in the disposition of bodies after death.
Until the late 19th century, burial was the only legal method for managing one's body upon death. Since cremation was legalized, it has slowly but steadily gained popularity as a choice, with an estimated 62% of people choosing cremation in 2024.
Law professors Tanya Marsh and Quincey Pyatt conducted a survey in March 2024 to learn how much the public knows about the choices that are now available. These are:
Cremation - in which the body is placed in a chamber and heated to an extremely high temperature until it is reduced to ashes.
Casket burial - the placement of the body in a specially designed box called a casket, which is either buried in the ground or kept in a mausoleum.
Donation to science - in which the body is given to a medical school or other organization that uses the body for medical research or education. When that usage is complete, the body is cremated, and the ashes are returned to the family.
Green burial - is the burial of the body without treatment with chemicals (embalming) either directly in the ground or in a biodegradable container in the ground.
Natural organic reduction - sometimes called "human composting," places the body in a container filled with natural materials and microorganisms that break down the tissues into soil.
Water cremation - or more formally, alkaline hydrolysis, places the body in a chamber with a mixture of water and chemicals, which is then heated and pressurized until the body is reduced to liquid and powder called "ashes."
More than 90% of the respondents to the survey were familiar with the first three options, and more than 40% were open to considering any of the newer choices.
Respondents were then asked to rank their preferences for these disposition approaches. Some 62% ranked cremation as a first or second choice, while only 38% identified casket burial that way. Surprisingly - Casket burial was the first choice of only 16.7% of those ages 60-78 in the survey, and it was not much higher for younger respondents.
Interest in green burial was strong, with roughly 60% of those under age 60 saying they would consider it (only 46% of those over 60 felt that way).
As new technologies emerge, there may be more reasons to choose the ashes route as we touched on in our blogpost "Bereavement and Remembrance" last year, with companies such as Eterneva and PartingStone turning ashes into jewelry or stones so that a remembrance can be worn or kept nearby without feeling intrusive.
Many people have strong feelings about what will happen to their bodies after life; others are less concerned. Whatever your feelings are, communicate your preference with family members early and clearly. Do not rely on papers in a safety deposit box--those might not be discovered until it is too late.
One of our roles in estate planning is serving as executor or personal representative of your estate. Who should you choose to settle your estate? We have the skills, the experience, and the knowledge to properly manage the job of estate settlement, which includes making sure that your wishes are followed for the disposition of your body. We are available, and we are impartial. We understand the nature of fiduciary responsibilities, and we know how to discharge them.
| | MONTHLY QUESTION & ANSWER | | |
Q. What can you tell me about the New Jersey Funeral Trust?
A. The New Jersey funeral trust is a financial arrangement that allows individuals to set aside funds specifically for their funeral and burial expenses. Individuals looking to prepay their funeral expenses very often utilize the New Jersey Prepaid Funeral Trust Fund, commonly known as Funeral Planning CHOICES. Established in 1981 and endorsed by the New Jersey State Funeral Directors Association (NJSFDA), this trust is one of the largest prepaid funeral trusts in the country, administering over 48,000 consumer accounts through nearly 600 participating funeral homes.
Key Features of Funeral Planning CHOICES:
- Flexibility: Consumers can choose between revocable and irrevocable trust accounts. Revocable accounts allow for changes and refunds, while irrevocable accounts are typically used for Medicaid eligibility purposes and cannot be altered or refunded.
- Financial Security: All funds are deposited into FDIC-insured bank accounts, ensuring the safety of your money. The trust earns competitive interest rates, which can help offset future funeral cost increases.
- Transparency: Account holders receive annual statements detailing the principal and interest accrued. Additionally, online account balance information is available 24/7, providing full transparency.
- Portability: Accounts are fully portable, meaning you can transfer your account to another participating funeral home at any time without penalty.
To establish a Funeral Planning CHOICES account, you would select a participating funeral home and work with a funeral director to prearrange your desired services and merchandise. After reviewing and signing the necessary agreements, your funds are deposited into the trust, and you receive confirmation of your account.
While Funeral Planning CHOICES is widely used in New Jersey, other funding options exist, such as assigning existing life insurance policies or purchasing preneed funeral insurance. Consulting with a funeral director can help determine the best option for your individual needs.
We hope this helps with your understanding of the New Jersey Funeral Trust.
HAVE A QUESTION ON TRUSTS, WILLS, OR INVESTMENT MANAGEMENT?
| | For general informational purposes only. This information does not constitute legal advice. | | |
Find out if a living trust is right for you. Read about four key benefits to consider in one of this month's Informational articles, Are You a Living Trust Candidate?
Should you have a special needs child you should read the 5-step plan in our Of Interest article, How to Plan for Retirement When Your Child Has Special Needs. You should also read A Special Trust for a Special Need. We are so proud of the many years of experience we have in meeting the needs of our special needs clients as their trustee.
For those of you who celebrate Easter this coming weekend, I wish you a day filled with sunshine, spring flowers, and colorful eggs. Happy Easter!
Sincerely,
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This is a true story, from a court report. Donald "Doc" Traylor was a chiropractic doctor in Casper, Wyoming. He had one son and two grandchildren, but he was estranged from them. Doc last saw his grandchildren in 2007, and his final face-to-face meeting with his son, Chadwick, lasted for about an hour in 2007. The nature of subsequent contacts, if any, is not mentioned in the decision.
Doc retired in 2006. He divided his time between Casper and a home in Florida. He befriended his Florida neighbors, the Whites, and in 2019 he asked them for suggestions for his estate plan. They referred him to their lawyer, who had Doc execute a revocable trust. Chadwick and Shannon White were named as successor trustees, and the remainder beneficiaries were primarily Chadwick and his children.
In June the Whites drove Doc from Florida back to his Casper home. They enlisted a neighbor, the Greens, to help care for Doc's dog and to visit him regularly. About this time, Doc became friends with a handyman, Mr. Dandurand. He drove Doc to Florida in October 2019, and flew to Florida to drive Doc back to Casper in June 2020.
Visiting Doc in August 2020, Mrs. Green discovered he had fallen and could not get up. A visit to the hospital revealed that Doc had prostate cancer. Upon his release Doc engaged Mel's Helping Hands to provide 24/7 care as he recuperated, owned by Melody and Kevin Kraft. The service was satisfactory.
Doc decided his Florida estate plan was no longer satisfactory, and asked the Krafts for help in getting it revised. Among the changes in the Second Amended Trust, Kevin Kraft was named successor trustee for a $150,000 fee, Mr. Dandurand was left $200,000 and a 21.6% residual interest in the trust, and Mrs. Green was named trustee of a pet trust and also received a residual trust interest. The remainder interest for Chadwick and his children was reduced to 10.58% each.
One of the nurses at Mel's Helping Hands became concerned that Doc was being exploited for his money. She resigned her position and filed a police report. A police investigation found no exploitation, that Doc was "very well taken care of, articulate, and aware of what he was doing and how his funds were being used."
Doc died in August, 2021, leaving an estate worth $4 million. In January 2022 Chadwick filed a lawsuit against Kraft, the Greens, and Dandurand alleging undue influence, seeking to have the second trust set aside. After hearing the evidence, the lower court held that there had been no undue influence. What's more, the second trust had included a very clear no-contest clause, which operated to remove Chadwick as a trust beneficiary because he had challenged the testamentary plan. Finally, the court ordered Chadwick to pay the defendant's lawyer's fees. The lower court decision was affirmed on appeal.
It appears that although Chadwick lost his inheritance by challenging the trust, his children did not lose their trust interest.
(April 2025)
© 2025 M.A. Co. All rights reserved.
| | Are You a Living Trust Candidate? | | |
Any comprehensive review of an estate plan is likely to touch upon the value of a revocable living trust for investment management. The trust approach provides a great tool for delegating investment responsibility into experienced hands without giving up control of assets. Anyone with a substantial portfolio should consider a trust and the benefits of professional trusteeship, such as we provide. Other good candidates for a living trust include those who:
- own assets in more than one state;
- are concerned about financial management upon illness or incapacity;
- value family financial privacy; or
- want to ensure immediate family access to assets after the owner's death.
For a real-life example of family financial privacy, one need look no further than the will and living trust of actor Gene Hackman, who died earlier this year. There was a flurry of speculation when the details of his will included no mention of his children, but the talk died down quickly when it was learned that there was much more to Hackman's estate plan than first reported--he had living trusts in place as well.
Think you might be a candidate for a living trust? Please come in and talk it over with us to learn more.
(April 2025)
© 2025 M.A. Co. All rights reserved.
| | A Small Break for Small Businesses | | |
The Anti-Money Laundering Act of 2020 was enacted to protect the financial system from money laundering, terrorism financing, and other illicit activity. One component of this legislation was the Corporate Transparency Act (CTA), which required millions of entities and individuals to register with the Treasury Department and to disclose personal information.
Reporting Companies were to file reports that provide the required information about the business entity involved, and information about any individual who is deemed under the complex CTA rules to be a "beneficial owner." The information that had to be reported included:
- The legal name and any trade names such as DBAs (doing business as) of the entity. This meant the exact legal name as reflected on the documents used to create the entity and all names under which the business operates.
- The actual street address for the company's principal place of business, not a P.O. box, or in care of a lawyer or other adviser's address.
- The name of the state in which the entity was formed.
- The Tax Identification Number (TIN) for the business. For some business entities, this required that they first obtain a TIN.
- An identifying document from the state in which the entity was formed (the "issuing jurisdiction") was to be uploaded. This could be, for example, a certificate of incorporation, limited partnership certificate, articles of formation, etc.
- Most significantly, reporting Companies were to report information on their Beneficial Owners. The definition of Beneficial was complex, starting with owning at least 25% of an entity. Ownership could include holding a profits interest, convertible instruments, warrants, options, puts, calls, and more. Finally, someone who had "substantial control" of an entity, even if they didn't own any part of it, was subject to the reporting requirements.
The CTA went into effect on January 1, 2024. Later that year several lawsuits around the country were filed challenging the new law on various grounds. Injunctions were issued, then appealed (one appeal made it all the way to the U.S. Supreme Court), the injunctions were narrowed, filing deadlines were extended, and a state of confusion ensued.
On March 2, 2025, the Treasury Department announced that the CTA would be enforced only as to foreign entities. Purely domestic companies are excused from compliance.
(April 2025)
© 2025 M.A. Co. All rights reserved.
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| | Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. ©2025. All rights reserved. | | | | |
