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Camden NJ Business & Commercial Law Blog

Make the right choice when it comes to trust planning

Why do New Jersey residents make the choice to include a trust in their estate plan? Well, for starters, as previous posts here have mentioned, a trust can be a great way to make sure that your assets are passed on in the most efficient way. For some, the main goal is to avoid probate court. For others, it is to minimize tax exposure. Whatever the reason, in many cases trusts can be a great tool to include in an estate plan.

But, when it comes to trusts, it is important to make the right choice. If a mistake is made, say, with an irrevocable trust, you may not have an opportunity to correct that mistake. And, as our readers probably know, there can be quite a few options when it comes to trusts, not only in deciding between irrevocable or revocable trusts, but also in choosing between options like spendthrift trusts, testamentary trusts, constructive trusts or charitable trusts.

Why worry about "due diligence" in business purchases?

Having the opportunity to explore the possibility of buying a business can be exciting for companies in New Jersey. When the conditions are right, businesses that are ready to expand might explore this possibility. However, when it comes to business purchases, there are certain steps that can be important, like going through the "due diligence" process.

Why should businesses in New Jersey worry about the due diligence process? Well, for starters, although you hope against it, this process could expose potential problems that might put an end to any consideration of going through with the sale. For instance, in the due diligence process the acquiring company will likely be going through all of the target company's financial documents. If there are serious errors or inconsistencies in the target company's finances, that could spell trouble for the business transaction.

"Payable on death" beneficiaries in estate planning

As our readers know from previous posts here, there are many different options to consider when it comes to estate planning. Different people enter the process with different goals, which means that different estate planning documents could be ideal for each individual's circumstances. For some people, avoiding the probate process is the highest priority. For these people, it might be smart to consider "payable on death" options in an estate plan.

Some people may not realize it, but they have probably already used some of the different types of accounts that can have a payable on death designation. As a recent article notes, bank accounts, investment accounts and certificates of deposit are all the types of accounts and investments that people can attach a payable on death designation. This means that the funds in the accounts are marked to be paid out to a particular beneficiary when the account holder dies.

An overview of the "cy-pres doctrine" and charitable trusts

Many people in New Jersey are finding out that it can be very beneficial to establish a charitable trust as part of an estate plan. These types of trusts allow a person or family to make sure that a significant part of their assets are designated to help a cause in which they believe deeply. However, as with many things in life, sometimes the purpose of these trusts can be frustrated in some way. In estate planning law, issues with charitable trusts can sometimes invoke what is known as the "cy-pres doctrine."

So, what is this legal doctrine and how does it impact charitable trusts? Well, in essence, this is a doctrine which allows the funds or assets in the charitable trust to still be used by the designated charity if the original purpose of the trust is no longer possible to complete. Say, for instance, that a charitable trust is established with the general intent to help the charity, but with the hope that the funds would be used for the specific purpose of funding the construction of a particular building for the charity in question. But, it is later learned that the building in question cannot be constructed for some reason. The cy-pres doctrine still allows the use of those funds by the charity for other reasons, as long as the purpose is as "nearly like" the original intent as possible.

When a poorly drafted estate plan leads to a will contest

Previous posts here have mentioned the importance of making sure that an estate plan is carefully crafted and comprehensive. But, why is that so important? Well, one of the primary reasons is that a poorly drafted estate plan could lead to a will contest in probate court - something most people want to avoid.

Fortunately, not just anyone can challenge the validity of a will. In most cases, the only people who can challenge the validity of the will are those who are - or would be - impacted by the terms of the will or state intestacy laws. This includes heirs and beneficiaries, or other relatives who believe that they might have received benefits from the estate if the will was found to be invalid.

Do you have a compelling reason to doubt your loved one's will?

Did other family members and friends accuse you of grumbling about your inheritance, or the lack thereof, after the death of a loved one? They might not have the information or doubts that you do about the validity of the last will and testament of your loved one. Doubts aren't enough to question the will legally, however.

In order to file a contest to the will, you need more than mere suspicion or theories. Contesting a will requires a commitment of your time and resources. The process often complicates personal relationships, but if you believe you are right, it could be worth it. You need convincing evidence of the fact that the will is invalid in order for the court to declare it invalid.

Make sure you're in compliance with business transactional law

For most businesses in New Jersey, the main goal of the company is to keep customers happy and earn a profit. These are the basics but, as many of our readers know, this can be "easier said than done." Many companies in New Jersey will run into legal problems that can complicate the efforts to achieve these basic goals at times, making it supremely important to make sure that they are in compliance with business transactional law.

However, business transactional law isn't an area where many people involved in company management spend a lot of time. The decision-makers might take care of the "big picture" details, but leave the details of contract negotiation and review, lease terms and ownership agreements to others. That's fine, as long as the ones who are taking care of the details in these documents and transactions know what they're doing.

An overview of deceptive trade practices

In the business world, there are many different issues that can lead to litigation. Deceptive trade practices is one. But, like many areas of business law, the concept of a deceptive trade practice might be foreign to many entrepreneurs and business leaders in New Jersey.

In short, a deceptive trade practice is something that a company engages in to intentionally lure or mislead another party - usually consumers - into purchasing a particular product or service. As our readers can probably imagine, it can be incredibly hard to prove that a company engaged in deceptive trade practices, which is why, in many of these types of cases, so-called "whistleblowers" can be important.

What do you need to know about charitable trusts?

The overall benefits of establishing a trust as part of an estate plan have been discussed in previous posts here. But, as has also been mentioned previously, there are a wide variety of different types of trusts that New Jersey residents can consider. Charitable trusts, for instance, are gaining in popularity. So, what do our readers need to know about charitable trusts?

First and foremost, our readers need to know that charitable trusts are a great mechanism for supporting the charity of their choice. But, there are benefits for the person who establishes the trust as well, particularly when it comes to taxes. For instance, anything that is put in a charitable trust won't be included in the overall value of the estate, so it won't be part of the calculation for estate tax purposes.

Survey results show that estate planning is still a touchy topic

Many of our readers have heard it before: the majority of Americans don't have a will. Previous posts here have touched on just how much of a risk it is to continue to avoid the issue of estate planning. Unfortunately, a recent report noted a study that confirms, again, that Americans are not doing what they should when it comes to estate planning.

The report notes that the study found that 52 percent of Americans don't have wills. So, we should applaud the 48 percent that do, right? Well, not necessarily. The study also found that of those who have addressed their estate planning needs, about 40 percent of them have not discussed the content of those estate plans with their children. And about 33 percent of people reported that their relatives don't even know where to find their estate planning documents when the time comes.

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