GeriLaw | Robert Fleming, Tucson elder law attorney, and colleagues

Biological father entitled to half of assets in daughter's SNT by Thomas D. Begley, Jr., Esquire

Jennifer Rogiers was born on September 30, 1983, severely handicapped as a result of a cervical cord injury doctors inflicted upon her at birth. Her mother, Rosa Rogiers, filed a malpractice claim and recovered $2.6 million, which was placed in a special needs trust for Jennifer’s benefit. On September 2, 2005, Jennifer died intestate and without children. The Superior Court of New Jersey, Appellate Division,[1] made a careful analysis of the law and determined that Jennifer’s biological father was entitled to a share of the assets remaining in the trust, even if he did not support his daughter during her lifetime. The court also held that the custodial parent, Jennifer’s mother, Rosa, was not entitled to back child support.

While Jennifer was in Rosa’s custody, Rosa received funds from the trust to attend to Jennifer’s needs. After Jennifer died, her father, Ruben Martinez, sought half of the balance remaining in the trust as his intestate share under New Jersey intestacy laws. Rosa challenged his entitlement and claimed that she was entitled to retroactive child support, though she made no claim for child support while Jennifer was alive. On appeal, Rosa asserted that Martinez did not contribute to Jennifer’s support during her lifetime and does not qualify as a parent under the New Jersey intestacy laws and, as a result, he is not entitled to any portion of Jennifer’s estate. The court pointed out that order establishing the special needs trust provided that any portion of the principal and undistributed income of the trust that Jennifer shall not have validly appointed by her Last Will and Testament shall be paid over and distributed to the persons who would be entitled to receive the property under the laws of the State of New Jersey then in force and in the proportions prescribed by such laws as if the primary beneficiary had died intestate and a resident of the State of New Jersey. Martinez claimed he was entitled to one-half of Jennifer’s intestate estate and that the probate code does not require a parent to fulfill any affirmative obligation of support or care to inherit from the child. The intestate estate of a decedent not survived by a spouse or a domestic partner, or by any descendants, passes to the surviving parents in equal shares. N.J.S.A. 3B:1-2 defines “parent” as “any person entitled to take or who would be entitled to take if the child, natural or adopted, died without a will by intestate succession from the child whose relationship in question and excludes any person who is a stepparent, resource family parent, or grandparent.” The New Jersey Parentage Act,[2] defines the parent/child relationship as “the legal relationship existing between a child and a child’s natural or adoptive parents, incident to which the law confers or imposes rights, privileges, duties, and obligations. It includes the mother and child relationship and the father and child relationship.

Previously, no appellate court in the State of New Jersey addressed the issue as to whether a parent’s right to take from a child’s estate is conditioned on the parent having supported the child during her lifetime. A 1985 trial court opinion[3] concluded that it is not necessary that a parent support a child to inherit from the child under the intestacy laws. The trial judge, Judge Connor, found that while the mother’s arguments that the father had waived his right to any portion of the estate because he abandoned the child was compelling, the plain language of the statute does not prohibit the abandoning parent from taking under the intestate laws.

With respect to the issue of retroactive child support, the court held that Rosa was able to care for Jennifer’s needs with trust funds and that there was no further need to financially aid the child.

Unfortunately, this is a significant case because in many situations where a child has severe disabilities, one parent, often the father, abandons the child. In some cases, the identity of the father is not even known. In New Jersey, it is not possible to draft a special needs trust with testamentary provisions for a minor or an incapacitated adult beneficiary. In situations where there is a minor, the trust document can provide the beneficiary with right to exercise a testamentary power of appointment. Upon the minor’s attaining majority, this can be done and that would be a solution to the problem. If the minor dies prior to obtaining majority or without exercising the power of appointment, or if there is an incompetent beneficiary, an unwanted and unfair result is often achieved. In some cases, adoption may be a solution. The legislature should be encouraged to revisit the probate code to provide that an abandoning parent should not be entitled to inherit through intestacy.

---

[1] In the Matter of Jennifer Rogiers, Deceased, 396 N.J.Super. 317, 933 A.2d 971 (Oct. 23, 2007).

[2] N.J.S.A. 9:17-39

[3] In re Estate of Rozet, 207 N.J.Super. 321 (Law Div. 1985).

Thomas D. Begley, Jr., Esquire

Begley & Bookbnder, P.C.

www.begleylawyer.cm

Aging in Place

One of the most common concerns seniors have is whether they will be able to stay in their homes for as long as they want.  Most people prefer to age in place rather than to move to a long-term care facility as they get older.  There are many financial concerns to consider with aging in place; however, an important, and often overlooked consideration is the physical layout and condition of the home.  Most homes are currently built for younger individuals who are healthy and mobile.  As people age, a home that was suitable for them when they were younger may not be as suitable, making living in the home difficult and uncomfortable.  With proper planning and some remodeling, however, they can make their homes comfortable, elegant, and senior-friendly.

As people age, it is important to have a well-lit home with easy to operate switches, so a general whole-house modification is lighting.  Designers suggest equipping many of the lights with dimmers, to make certain that the lighting is at a comfortable level, but may be increased as necessary.  Rocking switches can be easier on arthritic fingers than a traditional light switch.

The bathroom can be a major obstacle to staying in one’s home.  Many seniors suffer from arthritis and joint problems, making movement more limited.  This can make getting into a traditional shower or tub difficult.  The solution is to modify the bathroom to have a walk-in shower.  If possible, the shower should be large enough for two people to sit or stand in comfortably.  This will make it easier for a caregiver to assist with bathing if it becomes necessary.  The senior may not want to add grab bars at this stage of the remodeling if these bars are not immediately needed, but the senior should reinforce the wall so grab bars could be installed in the future.  A temperature regulator should also be installed in the shower or bath, because older skin is less sensitive to heat and can easily be burned.

Flooring is another important design element.  If seniors become less mobile, they can easily trip on rugs or have problems walking on carpet.  A practical and elegant alternative is to install hardwood or laminate flooring that is smooth, easy to walk on, and reduces the possibility of tripping.  Hardwood or laminated flooring is also a practical solution if the occupant needs to use a wheelchair or walker.

Other useful modifications are to use drawers instead of cupboards where possible, raise dishwashers and low cabinets to avoid excessive bending, widen doorways if possible to accommodate a wheelchair, and design an entryway that does not require a step.  Many care managers suggest that your home be modified so that you can live on the ground floor if necessary.  This may require expanding a half-bathroom to a full bathroom.

Many baby boomers are planning for their future.  They are making these home modifications now to plan and prepare for their senior years.  The designs and possibilities for these modifications are elegant and attractive; fifty years ago such modifications tended to look institutional and were unattractive.  Many manufacturers are developing product lines to meet the demands of seniors.  For example, Kohler® has developed their “aging gracefully” concept and has created products that fit into that model.

Andrew Hook
Oast & Hook
www.oasthook.com

How to talk with your parents about aging

We see it all the time. The adult children of aging parents come to our offices looking for direction. Yes, they have legal questions (How do I start using my power of attorney without disturbing or offending Dad? How will Mom ever be able to pay for nursing home care?). Often, however, their questions are much more vague, and much more difficult.

What these clients often need is counseling, advice and reassurance. It is hard to initiate conversations with parents. It is hard to begin the shift to parenting our parents. When they were parenting us they had Dr. Spock for help, and we had Dr. Brazelton in our turn. But there isn't a good single guidebook for this process. And it is becoming much more commonplace.

Yesterday, with NPR on the car radio, I practically had to pull over to give my full attention to one of the best conversations I have ever heard on the subject. "Talk of the Nation," with Lynn Neary filling in for Neal Conan, devoted its January 17, 2007, program to "How to talk to parents about aging." With guests Amy Dickinson ("Ask Amy") and Joseph Coughlin (from the MIT AgeLab), the half-hour program was a goldmine of small nuggets and reinforcement.

I loved it. I predict you will, too -- whether you are looking for help dealing with your own aging parents, or are an elder law attorney or other professional in the aging network. You can get transcripts, you can read and contribute to the "Talk of the Nation" blog, or you can listen to the program itself online at the NPR site. I'm a big fan of NPR generally, and this excellent program provides good support for that view.

Robert B. Fleming
Fleming & Curti, PLC
Tucson, Arizona

Tax Relief for Widows and Widowers

The Mortgage Forgiveness Debt Relief Act of 2007 is best known for its provisions regarding income tax treatment of mortgage debt forgiveness.  This Act also changed the rules governing the exclusion of gain realized on the sale or exchange of a principal residence.  A taxpayer generally can exclude $250,000 of such gain ($500,000 for certain married couples filing joint income tax returns).  The taxpayer has to have owned the residence and used it as a principal residence for at least two years of the five-year period ending on the date of the sale or exchange. 

For an unmarried taxpayer whose spouse is deceased on the date of sale of the property, the period that the unmarried individual owned and used the property includes the period the deceased spouse owned and used the property before death.   Under the previous law, a surviving spouse could exclude $500,000 of gain only if the following conditions were met:

1. The sale occurred in the year of the deceased spouse’s death;
2. The surviving spouse and the deceased spouse’s executor or personal representative filed a joint return for the year of death;
3. Either the surviving spouse or the deceased spouse met the two-year ownership requirements with respect to the property immediately before the spouse died;
4. Both spouses met the two-year use requirements with respect to the property immediately before the spouse died; and
5. Neither spouse was ineligible for the benefits of the exclusion with respect to the property by reason of the one sale every two years rule.

This could present problems when the spouse died late in the year and the survivor wanted to sell the family residence.  The surviving spouse would have to quickly sell the house in order to preserve the $500,000 exclusion.  If, however, the deceased spouse owned the house outright, the surviving spouse would receive the benefit of a full step-up in basis to the date of death or alternate valuation date value, and there would be no rush to sell the house before the end of the year of death.

The new law, effective for sales or exchanges after December 31, 2007, gives the surviving spouse additional options with respect to selling the residence after the deceased spouse’s death.  The taxpayer can still qualify for the $500,000 exclusion by meeting the conditions listed in items 1 through 5 above.  The taxpayer can also qualify for the exclusions if the sale occurs not more than two years after the date of death of the spouse, and the conditions listed in items 3 through 5 listed above are met.  If the sale meets these requirements, then the gain on the sale is treated in the same manner as if the spouses had sold the residence immediately before the deceased spouse’s death.  The new law should generally provide the greatest tax benefit for a surviving spouse who owned the residence in his or her own name before the death of the deceased spouse, and both the deceased and surviving spouse used the residence.  In this case, the residence would not receive a step-up in basis to the fair market value at the date of death or alternate valuation date, but the taxpayer could exclude up to $500,000 of gain.

If the surviving spouse remarried before the residence is sold or exchanged, this new section will not apply because the sale or exchange has to be made by an unmarried individual in order to qualify for the higher exclusion.  If the gain on the sale or exchange would exceed $250,000, and the taxpayer intends to sell the residence, then he or she should consider doing so before remarrying.

Andrew Hook
Oast & Hook
www.oasthook.com
Offices in Virginia Beach and Portsmouth, Virginia