ABLE vs. SNT (Part 2)
Last week I was telling you about a call I received about the benefits of an Achieving a Better Life Experience (ABLE) account vs. a special needs trust (SNT). Joan called about her sister Mary, who is receiving an inheritance from their uncle’s estate. Mary is in a group home and receives SSI and Medicaid benefits. Joan correctly is concerned that the inheritance of $200,000 would cause Mary to lose those benefits. She wants to set up an ABLE account and place the inheritance proceeds into that account. She prefers an ABLE account because it is less expensive to set up and she believes it is easier to manage. I told Joan, however, that she was misinformed. Let me tell you why. First of all, an ABLE account can only be funded with $14,000 per year. Secondly, if the total account value exceeds $100,000, eligibility for SSI benefits will be suspended. Losing SSI will then cause a loss of Medicaid benefits. These reasons alone make an ABLE account impossible here. But there’s more. Even if Mary’s inheritance was small enough to meet the financial limits above, Mary’s disability must have occurred
ABLE vs. SNT (Part 1)
I received a call from Joan. She told me that her sister Mary is named as an heir to part of their uncle’s estate. Mary is disabled and living in a group home. Joan was concerned that the inheritance Mary would receive of approximately $200,000 would jeopardize her government benefits and continued residence in the home. Joan did a little research on the internet, always a little dangerous. She concluded that in order for Mary to preserve her benefits, she has two options. She can either have a special needs trust set up for Mary which could receive the inheritance proceeds or she could set up an ABLE account for Mary into which the proceeds could be placed. An ABLE account is relatively new. The Achieving a Better Life Experience Act of 2014 was passed by Congress and was intended to allow for the creation of something similar to 529 accounts for the benefit of disabled individuals. While the law is now almost 3 years old it took some time before financial institutions and organizations began offering the accounts. See my blog posts on 1/12/2015 and 1/19/2015 for more details. Joan
Found Money (Part 2)
Last week I was explaining what happens to abandoned or unclaimed property. New Jersey has in its possession more than $1 billion of property that people have abandoned, usually because they have forgotten about the accounts. Nationwide, there is well over $50 billion in unclaimed funds. Financial institutions and other holders of this property must report the property to the State Treasurer. The State, however, doesn’t get to keep the property forever. If the rightful owner reclaims it, then the State must turn it back over to the owner. But, where do you go to find this property? Luckily, in today’s online world it is easier than it has ever been to search and reclaim abandoned property. There are websites that can help you locate property you may have had in any state. Because each state has its own unclaimed property laws and acts as custodian for property held in that state it is important to run a check of any state where you lived or had a reason to take accumulate property. It is also a good idea to check states where a family who has left you an inheritance lived. Two
Found Money (Part 1)
In today’s world, change comes at a pretty rapid rate. That is certainly true when it comes to our assets and financial accounts. Many people move jobs and change financial institutions frequently. It is easy to understand how assets can be overlooked or forgotten. Maybe I never completed the paperwork to rollover all my retirement accounts, stock plans etc. from a former employer or I didn’t close out all the accounts I had at one bank before moving to another. If I change my address I will no longer receive account statements so it is easy to forget about these accounts. Out of sight. Out of mind. What happens to this property? The law calls it abandoned property. New Jersey, like many states has a body of law covering abandoned or unclaimed property, what is called the Uniform Unclaimed Property Act. The account holder (eg. financial institution holding the account) has a duty to report abandoned property to the Administrator. In New Jersey that is the state treasurer. Unclaimed property then must be turned over to the custody of the state. New Jersey alone is currently holding in its possession more than $1
What Constitutes a Validly Executed Will (Part 2)
Last week I was telling you about an Australian case in which the court held that a deceased man’s unsent text message found on his phone was considered to be a valid will. How might a New Jersey court rule on these facts? New Jersey law generally establishes that a will should be in writing, signed by the testator (the person who’s wishes are contained in the will) or in the testator’s name by another person in the conscious presence of the testator and at his/her direction. The will should also be signed by at least 2 witnesses who did so within a reasonable amount of time after witnessing the testator’s signature or the acknowledgement of the testator’s signature. What if these requirements aren’t met? New Jersey law states that a will that doesn’t comply with the witness requirements may still be valid as a “writing intended as a will” if the signature or material portions of the document are in the testator’s handwriting. That wouldn’t appear to help here since the Australian man texted his wishes. His stated wishes were not “in his own handwriting”. It may, however, still be considered a will if it can be proven
What Constitutes a Validly Executed Will
An interesting case caught my eye on the internet the other day. An Australian court found that an unsent text found in a deceased man’s phone, stating that he wanted his estate to go to his brother and nephew, not his wife and son, composed before he took his own life, constituted a validly executed will. The wife took the case to court, claiming the text was not valid because it was never sent. The court disagreed, finding the phrasing of the text indicated the man was of sound mind when he composed the text. It also considered the relationship of the decedent and his wife. Although they were still married at the time of his death the relationship was strained. Normally, under Australian law a valid will must be in writing and signed before two witnesses, however, a change in the law 11 years ago now permits less formal documents to be considered wills. A holographic will is one that is not witnessed and does not comply with the laws relating to the proper execution of a will. It is not uncommon for holographic wills to be admitted as validly executed wills. What makes this case interesting is