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When we get to the end of the year, it’s time to look ahead to what numbers may change in 2024 for the government programs from which our clients receive benefits.  It starts with the Social Security Administration, which announces its cost of living adjustment (COLA).  Other government programs then adjust their numbers, sometimes using the same COLA as Social Security.  In the last 2 years because of the highest inflation rates that we have seen in 40 years, the adjustments were large at 5.7% for 2022 and 8.7% for 2023. Inflation, has steadily declined, however, so the COLA for 2024 is a more modest 3.2%.  This means that Social Security recipients will receive an increase in their monthly payment of 3.2%.   Medicare numbers will also change next year.  The standard Medicare Part B premium that most people pay will increase by 6% to $174.70.  This follows last year when the premium actually decreased from $170.10 to $164.90.  Certain Medicare deductibles and copays will increase next year.  The Part A hospitalization deductible will increase by $32 to $1632 and the copay for days 61 through 90 will increase from $400 to $408 per day. Medicare covers the cost of rehabilitation in a skilled nursing but there is a copay for that

In this last post of 5 I explain the reasons why the estate administration process takes as long as it does - why it isn’t as simple as getting appointed administrator and closing out all the decedent’s accounts and distributing them in a matter of days or weeks. This week we cover taxes.  We almost always must address the issue of taxes but there are different types of taxes.  When someone dies we must consider estate taxes and inheritance taxes.  Federal estate tax is owed on estates greater than $12.9 million (soon to increase to $13.6 million in 2024).  Only a small percentage of estates ever owe federal estate tax.   New Jersey no longer has an estate tax for anyone who died on 1/1/2018 or later, however, there still is an inheritance tax.  This is based on the relation of the heirs to the person who died.  Certain “Class A” beneficiaries are exempt from tax.  They include spouses, children and grandchildren.  Distributions to more distant relatives and non relatives are subject to tax depending on which class they are assigned to.   Estate tax returns are due and the tax owed 9 months after death.  Inheritance tax returns are due and the tax owed 8 months after death.  Interest accrues on unpaid tax after

In my post last week, I covered the complications that can arise if there is no personal representative named - either because there is no will or because none of the named executors in the will are able to serve.  This week I discuss the difficulties when there are no clearly identifiable heirs.  We must then consult the intestacy laws which establish who are entitled to a share of the estate. The law establishes the categories of heirs and the order in which they take.  Identifying those individuals however, isn’t always easy.  The decedent may have had children from different relationships, some of whom he may have lost touch with.  When there isn’t a spouse or children it can get trickier. More distant relationship such as aunts and uncles and cousins can be especially problematic to identify.  A family member from the maternal side of decedent’s family, for example, may not have knowledge of family members on the paternal side.  The family tree on each side must be identified because they have equal right to share in the estate. There is not a central database that can be consulted to identify all the heirs.  Professionals may need to be hired to locate heirs.  Searches must be methodical to capture all possible heirs

In this week’s post explaining why estate administration takes so long, I cover the scenario when there is no will.  New Jersey law establishes who has the first right to serve as administrator and who inherits the estate.  Often, however, identifying the correct individuals is not easy. An administrator is tasked with the job of gathering together the assets, paying the debts and taxes if any and distributing the balance to the correct heirs.  The law establishes that a spouse has the first right to serve as administrator if he or she wishes.  After that, the next in line are the remaining heirs or some of them if any will accept.  That’s where it has the potential to get complicated.  For example, if the heirs are three children, each has equal right to serve.  Each child must either apply to serve or decline to serve by signing a renunciation.  Locating and arranging for the necessary paperwork to be signed can take time depending on how cooperative each person is. If any of the heirs refuse to cooperate by indicating one way or the other what they want to do, then an application must be made by way of order to show cause before a judge, on notice to all interested

In my post last week I addressed a common question concerning the process of administering the estate of someone who has died.  Why does it take so long? On average it can take 9 to 12 months for most estates to be completed although I did explain last week that easier estates can take less time.  Such cases are where there is a will, few assets to administer and one heir (who is also the executor or administrator). Having an original validly executed will  does expedite the process.  That’s because the New Jersey probate process is very easy if you have the original will and it complies with the State’s document execution requirements.  No judicial court order is necessary.  Submitting an application with the original will and certified copy of the death certificate allows the county Surrogate to issue the appointment, usually within a week or so. If, however, you don’t have the original will or it lacks any of the execution requirements per state law, the will can still be accepted as the “official” last will, but that determination must be made by a judge by way of an order to show cause.  Copies of this court filing must be provided to all heirs and next of kin.  The court

When I explain the estate administration process, I am usually asked, “how long will it take?”  The person will often preface that question by first stating that “it’s a simple estate” or “all the heirs are in agreement”. I tell people that, on average, an estate can require 9 months to a year to finalize.  It does, however, vary depending on how much of a decedent’s (the person who died) assets are passed by way of a will (or intestacy laws when there is no will) vs. other methods such as by payable on death designation or operation of law (ie. joint with right of survivorship), whether there is a validly executed will, whether there are multiple heirs and whether there are any estate, inheritance and/or income taxes due. Conversely, the estate administration process is quite simple and relatively quick in many cases.  The commonalities to an “easy” estate tend to be few probate assets, no tax issues and a sole heir who is also the executor or administrator.  Estate administration in these instances can be accomplished in a matter of weeks or a couple of months. So, why is it that some estates take longer to administer?  There are a variety of reason but we can start