To schedule a confidential consultation, call (732) 572-0500
Kenneth Vercammen & Associates, P.C. 2053 Woodbridge Avenue - Edison, NJ 08817

Thursday, January 30, 2014

Post Will instructions

I recommend that you review your Will
periodically in order to keep it up-to date regarding changes in your family,
your property, your wishes, and the law. 
I suggest that approximately five (5) years from the present time, you
contact my office and schedule an appointment again so that we can review your
Will together.

do not let this periodic review program prevent you from considering the making
of a change in your Will at any earlier date. 
Changes should be made whenever you believe such changes are necessary.
A person's family, property and wishes may change over the years and for these
and other reasons you should re-examine your will from time to time in order to
make sure that it will carry out your present wishes.
caution you against making any marks upon your original Will because this can
lead to a Will contest. If you want to make a change in your Will, please come
back to my office and we will either make a Codicil (a short addition) to your
Will or a new Will depending upon your needs and wishes.

the event that a death occurs in your family, may I suggest that you contact my
office immediately in order to determine what, if anything, must be done in
order to settle that person's estate. I also suggest that you instruct your
Executor and the members of your family to contact my office immediately, in
the event of your death, in order to determine what, if anything, must be done
to settle your estate.

         It has been a pleasure handling your
legal affairs. If I can be of any help to you in the future, please be sure to
call on me again. Thank you again for allowing my office to be of service to
you.  We hope you are satisfied with the
services performed by my office.  The
file is now closed.


                          SPEEDING and RADAR                  
                     By Kenneth A. Vercammen
         It is well established
that the prosecution of a defendant for a motor vehicle violation is a
quasi-criminal proceeding.  In such a
proceeding the burden of proof is upon the state to establish all elements of
the offense beyond a reasonable doubt.
         In every charge of a
speeding violation, the complaint or summons should specify (l) the speed at
which the defendant is alleged to have driven, (2) the speed which is prima
facie unlawful, and (3) the time and place of the alleged violation.
         A sign showing a speed
limit is merely notice of the law or an ordinance or regulation prohibiting a
greater speed.  The sign itself does not
set the speed limit.  There can be no
conviction for violation of the edict of a posted sign, but only for violation
of the statute, ordinance, or regulation having the force of law.  There are many unauthorized signs in the
state which may serve as a warning but have no effect in creating an

       Speed-measuring radar in various forms has been
accepted since State v. Dantonio 18 N.J. 570 (1955), where the N.J.
Supreme Court held it is not essential that the court determine the precise
speed at which the vehicle was being operated when the alleged offense
occurred, and that the operator of the vehicle must be adjudged guilty if the
evidence established, beyond a reasonable doubt, that the drive exceeded the
statutory speed limit.
         It is not necessary for
the trial court to make a particular finding as to the precise speed in excess
of the speed limit at which the defendant was traveling at the time of the
violation.  State v. Bookbinder
82 N.J. Super. 179, 183 (App. Div. 1964).
         However, if the defendant
is found guilty, the trial court should determine the quantum of excess was so
many miles per hour in exercising its discretion as to the penalty to be
imposed within the statutory limitation. 
The precise speed a motorist was traveling thus is material only on the
question as to the penalty to be imposed, not on the question of guilt or

         State v. Readding
169 N.J. Super. 238 (Law Div. 1978), restated the general rule that in order
for the radar speedometer reading to be admissible into evidence, it should be
established that: (l) the device is scientifically reliable; (2) the particular
speedometer used in the case being tried is accurate; (3) the operator is
qualified; and (4) the device was operated properly in the case being tried.

How Radar Operates

       In State v. Wojtkowiak 170 N.J. Super. 44
(Law Div. 1979), rev'd on other grounds, 174 N.J. Super. 460, Judge Wells
examined in detail the K-55 Radar, and his conclusions were incorporated by the
Appellate Division.  This case should be
read and reread for a detailed explanation of Radar by a Court.  
         The traffic radar method
speed detection measurement depends upon the Doppler effect.  Simply stated a radio wave which strikes a
moving object is reflected from that object at different frequency from that of
the incident wave.  A radar which
transmits waves and receives reflected waves can determine their frequency
difference and calculate the speed of the object which produced the reflective
         Courts have accepted as
scientifically reliable MPH Industries' K-55 Traffic Radar. In State v.
174 N.J. Super. 460 (App. Div. 1980), the appeals court held in
all future cases the state should adduce evidence at the municipal court level
as to (1) the specific training and extent of experience of the officer
operating the radar, (2) the calibration of the machine was checked by at least
two external tuning forks both singly and in combination, and (3) the
calibration of the speedometer of the patrol car in cases where the K-55 is
operating in the moving mode.
         MPH Industries,
manufacturer and distributor of the K-55, sets forth the following eight points
an officer must be able to testify to:
         -  The officer must establish the time, place
and location of the radar device at the time he made the reading.
         - The officer must be able to identify the
         - The officer must identify the defendant as the
operator of the vehicle
         -  The officer                    must testify that he made a
visual observation of the vehicle and that it was going at an excessive rate of
         -  At the time of the radar reading the officer
must testify that the vehicle was out front, by itself, nearest to the radar.
         -  The officer must state his qualifications and
training in radar use.
         -  The officer must establish that the radar was
tested for accuracy both prior and after its use.
         -  If used in the moving mode, that at the time
of the radar reading the patrol speed indicated on the unit compared to the
speedometer of the police vehicle.

Qualified Operator?

         While it appeared to the
court in State v. Wojtkowiak, Supra that the K-55 Radar is an accurate
and reliable tool for the measurement of speed, its accuracy and reliability in
any case are no better than the skill of the person operating the radar. Id.
at 174.  The court made this emphasis as
a warning to all police departments that proper courses of instruction be
developed before the K-55 Radar device is employed in any municipality.
         A calibration check is
accomplished with the use of two tuning forks and their accuracy must be the
subject of the documentary proof.  Use of
the K-55 does not eliminate the need for such proof.  State v. Wojtkowiak 170 N.J. Super. at
50, n.1
         In State v. Overton
135 N.J. Super 443 (Cty. Ct. 1975), four external tuning forks were used to
test the radar unit 12 times within a period of approximately 90 minutes.  The court noted there is authority to the
effect that a radar unit should be checked for accuracy each time it is set up
at a different location.  MPH Industries
argues this is not necessary with moving radar.
         In State v. Readding
160 N.J. Super 238 (Law Div. 1978), the court reiterated the decision in State
v. Overton
135 N.J. Super. 443 (Cty. Ct. 1975), where the court found there
are three universally accepted methods of testing the accurate operation of a
radar speed measuring device:

            1.  By
use of the internal tuning fork built into the machine itself (which the    court found to be improper).
            2. By running the patrol car with a
calibrated speedometer through the  
"zone of influence" of the radar machine.
            3. By use of external tuning forks
calibrated at set speeds and which emit sound waves or frequencies identical to
those which would come from a vehicle traveling through the Radar bearer at the
same speed for which the tuning fork has been cut.

         It is also important to
recognize that in State v. Readding 160 N.J. Super. 238, the court
stated: the proper operation of the device must be proved, usually by detailed
reference by the qualified operator to the procedures called for by the
manufacturer of the device.

Tuning Forks
       Before a radar speed reading is admissible, the
state must establish the machine was operating properly. MPH Industries' test
procedure uses two tuning forks:  First,
the lower-speed fork is struck on wood or plastic and the ringing fork is held
in a fixed position two to three inches in front of the antenna with the harrow
edge of the fork facing the antenna front. 
This will cause the Patrol Monitor Window to display the fork's
speed.  While continuing to hold this
ringing fork in place, the higher-speed fork is struck and held next to the
lower-speed fork (both forks must be vibrating while being held an equal
distance from the antenna). The target should then display the
"speed" difference between the two forks. For example, if the forks
used are 35 mph and 65 mph, then the target window will display the difference,
which is 30 mph.

Admissibility of Evidence
state should establish through documentary evidence the tuning fork itself was
accurate.  The state must produce and be
able to admit into evidence certificates as proof of the accuracy of the
devices used for testing the proper operation of the machine.
         In State v. Cardone
146 N.J. Super. 23 (App. Div. 1976), the court held that while certificates do
not have to satisfy the normal rules of evidence, an Evidence Rule 8 hearing
[now Evidence Rule 104] still can be held, at which the court can determine
preliminary issues of admissibility of evidence.  In such a hearing, the rules of evidence --
except for Rule 4 or a valid claim of privilege -- do not apply. Id. at
         The Cardone court
found that the certificates of calibration and accuracy of the radar machine --
and for the tuning forks used to test the machine -- were properly admitted in
evidence, even though no proof was offered to qualifying the certificates as
records made in the regular course of business. 
The certificates were used solely as evidence of proper operating
conditions or as a prerequisite to the admissibility of the radar reading, and
the defendant made no effort to prove the internal calibrating device or the
tuning forks were inaccurate.
In State v.
supra, the Superior Court exonerated the defendant, stating:
              It is entirely possible for a particular
RADAR device to function properly and record accurately a 50 m.p.h. but
inaccurately at higher speeds....
              Accuracy of the particular speedometer
should be established by more   than one

The 'Pace' or 'Clock' Method

       A "pace" or "clock" is performed
by an officer in a patrol car with a calibrated speedometer for a duration of
distance or time wherein the officer accelerated to a speed equivalent to the
suspect's, and then keeps a steady distance behind the suspect's vehicle following
that vehicle.  It is essential that the
patrol car's speedometer be calibrated and that the certificates of calibration
both before and after, be admitted into evidence.  
         An officer may also sometimes admit he
was unable to get a good "clock" but may say that his vehicle was
going 70 mph, for example, and he was still losing ground to the offender.  The obvious shortcoming to
"clocking" as vehicle is that the officer's objective judgment may be
brought into question, the interference by other traffic, or other
non-reasonable factors.  It is for these
reasons that the "clock" method is used less frequently than radar
and laser speed detection.

Laser Speed Detection
The landmark case
on Laser speeding tickets is In the Matter of the Admissibility of Motor Vehicle
Speed Readings Produced by the LTI Marksman 20-20 Laser Speed Detection System

314 N.J. Super. 233, 714 A.2d 381; (Law Div. 1998) aff’d 326 N.J. Super.
110. (App. Div 1999)

         Reginald Stanton, Assignment Judge wrote: …the general
concept of using lasers to calculate the speed of motor vehicles is generally
accepted within the relevant scientific community and is valid. Despite the
fact that the testing conducted was far from perfect, it was adequate, and I am
satisfied from the totality of the evidence presented to me that the laser
speed detector produces reasonably uniform and reasonably measurements of the
speed of motor vehicles under conditions likely to be present on New Jersey
highways when the detector is used for law enforcement purposes.

The error trapping
programs and mechanisms built into the detector are fully adequate to prevent
unreliable speed measurements when used for law enforcement purposes.
Accordingly, under the broad teaching of cases such as Romano v. Kimmelman,
96 N.J. 66, 474 A.2d 1 (1984), and State v. Wojtkowiak, 170 N.J. Super.
44, 405 A.2d 477 (Law Div. 1979), reversed on other grounds, 174 N.J. Super.
460, 416 A.2d 975 (App. Div. 1980), speed readings produced by the laser speed
detector should be received as evidence of the speed of motor vehicles without
the need for expert testimony in individual prosecutions arising under the
motor vehicle laws.

The Law Division
held admissibility of such readings shall be subject to the rules set forth

1. Expert testimony in support
of admissibility shall not be required, except as specifically set forth below.

2. Appropriate training
of the law enforcement officer operating the laser speed detector shall be
shown in each case.

3. Pre-operational
checking procedures recommended by the manufacturer of the laser speed detector
shall be shown to have been made in each case.

4. Speed measurements
shall be admitted whether made in daylight or at night and within any
temperature range likely to be found in New Jersey, even if made under
conditions of light or moderately heavy rainfall, but speed measurements taken
during heavy rain or while snow is falling shall not be admitted without the
support of adequate expert testimony in the individual case.

5. Speed measurements
made at any distance up to 1,000 feet shall be admitted, but measurements made
at any distance in excess of 1,000 feet shall be admitted only with the support
of adequate expert testimony in the individual case.

This case was
affirmed State v. Abeskaron (In re Admissibility Hearing of the LTI Marksman
20-20 Laser Speed Detection Sys.),
326 N.J. Super. 110. November 24, 1999

         It is no defense to argue
unlawful arrest, selective enforcement, custom and usage, non-ownership of car
driven, ignorance or mistake of law, lack of precise speed proved, defective
speedometer or cruise control.  Obey the
law, follow speed limits and you will have no need to know about Radar.
About the Author

A. Vercammen is a trial attorney in Edison, Middlesex County, New Jersey.  He has lectured on traffic and criminal law
for the New Jersey State Bar Association, New Jersey Institute for Continuing
Legal Education and Middlesex County College. 
He often lectures for the New Jersey State Bar Association on personal
injury, criminal / municipal court law and drunk driving.   He has published 55 articles in national and
New Jersey publications on municipal court and litigation topics. He has served
as a Special Acting Prosecutor in seven different cities and towns in New
Jersey and also successfully defended hundreds of individuals facing Municipal
Court and Criminal Court charges.
          In his private practice, he has devoted a substantial
portion of his professional time to the preparation and trial of litigated
matters.  He has appeared in Courts
throughout New Jersey several times each week on many personal injury matters,
Municipal Court trials, matrimonial hearings and contested administrative law

1985, his primary concentration has been on litigation matters.  Mr. Vercammen gained other legal experiences
as the Confidential Law Clerk to the Court of Appeals of Maryland (Supreme
Court), with the Delaware County, PA District Attorney Office handling Probable
Cause Hearings, Middlesex County Probation Dept as a Probation Officer, and an
Executive Assistant to Scranton District Magistrate Thomas Hart in Scranton,

2014 update Wills and Estate Planning Seminar

update Wills and Estate Planning Seminar materials
         By Kenneth Vercammen, plus the Greenbaum Rowe Law
Office Alert - An Overview of Key Provisions of the American Taxpayer Relief
Act. We
the Greenbaum Rowe office for permitting us to share their valuable

1. Federal Estate Tax exemption now permanently increased so no tax for
Estates under
$5,340,000., and will
be adjusted annually for inflation. However, New Jersey taxes estates over

2. Gifts permitted
without Federal Estate & Gift tax was increased to $14,000 per person. 

3. We
recommend Self- Proving Wills since witnesses often move or pass away

4. Non-formal
writings could be
Wills under the New Probate Law

5. Undue influence: Recent cases can void Will signed under suspicious
6. NJ Inheritance tax
7. Power of Attorney
8. Federal Health Privacy Law (HIPAA)
9. Competency required to sign a Will or Power of Attorney
10. Taxpayer relief act

         1.  Federal Estate Tax exemption is now
permanently increased so no tax for Estates under $5,340,000, and will be
adjusted annually for inflation. However, New Jersey taxes estates over
Federal Exemption Amount for
Non-Citizen Spouses is $145K up from $143K.
        New Jersey has an Estate Tax on amounts over $675,000.  So, even if no Federal Estate Tax due, the
estate must still file a Federal Estate Tax Return, plus NJ Estate Tax Return.
So, for an unmarried or widowed person with
assets of $1,000,000, there is No Federal Estate Taxes, but

the Estimated State Estate Tax:  $33,200.00

   For  an unmarried or widowed person with assets
of $1,500,000, estimated NJ Estate Tax is over $60,000.
The Federal Tax rate on estates over $5,340,000 has been
increased from 35% to 40%.
How to avoid NJ Estate Tax- hire an attorney to set up a
personal residence trust or irrevocable trust and have the assets taken out
of your name and put into a trust or given to children and grandchildren in
the trust. Minimum fees for trust are $3,000. This is probably not something
a non-attorney can do on their own. It is illegal for a non-attorney to provide
legal advice or prepare most legal documents.

2. Gifts permitted without Federal Estate &
Gift tax was increased to $14,000 per person. 

        However, the amount permitted for
Medicaid transfers is zero.

3. We
recommend Self- Proving Wills since witnesses often move or pass away
         An old
New Jersey Probate law required one of the two witnesses to a Will to travel
and appear in the Surrogate’s office and sign an affidavit to certify they were
a witness. This often created problems when the witness was deceased, moved
away, or simply could not be located. 
Some witnesses would require a $500 fee to simply sign a surrogate
paper. My Grandmother’s Will was not self- proving, and the witness to Will
extorted a $500 fee.
New Jersey Legislature later passed a law to create a type of Will called a
“Self-Proving Will.”  In such a Will, the
person for whom the Will is made must sign. 
Then two witnesses sign.  Then the
attorney or notary must sign; with certain statutory language to indicate the
Will is self-proving.  Beware of online
documents not prepared by an attorney
             When done properly, the executor does not
have to locate any witnesses.  This
usually saves time and money.  If your
Will is not “self-proving” or if you are unsure, schedule an appointment with
an elder law attorney. Some law offices ignore the revised law, and fail to
prepare self proving Wills. Do not use a law office that follows old methods
and does not do a self-proving Will.

4. NJ
SENATE Law No. 708 made a number of substantial changes to the NJ Probate Law.

writings could be Wills under the
Revised provisions governing the
administration of estates and trusts in New Jersey.  So make sure you have a Formal Will drafted
by an estate attorney.

       The law
expanded situations where writings that are intended as Wills would be allowed,
but requires that the burden of proof on the proponent would be by clear and
convincing evidence. Possibly a Christmas card with handwritten notes could be
presented as a Will or Codicil.
  To present a non-formal Will or writing
requires an expensive Complaint and Order to Show Cause to be filed in the
Superior Court, and a hearing in front of a Superior Court Judge.
  Be careful; have a Will done properly by an
experienced attorney.

   Beware of the “Elective share” rights of a
new spouse. Have a Prenuptial Agreement if entering into a 2nd
elective share provisions of the present Code has still not been changed
yet.  Currently, the new spouse who is
not given money in a Will can challenge the terms of the Will. This is called
"electing against the Will by a spouse". A spouse could receive up to
1/3 of the estate, even if only married for 2 weeks. The spouse must file a Caveat
or lawsuit in Superior Court.  We suggest
a formal prenuptial agreement in 2nd marriage situations.
            A Testator now means both male and female
individuals, removing the term “Testatrix”. Will forms that say executrix
should not be used.
        The law provides a statute of
limitations with respect to creditor claims against a decedent's estate. There
is no longer a need to publish a Notice Limiting Creditors.

5. NJ Supreme
Court held a Will could be void if signed under suspicious circumstances
When there is a confidential
relationship coupled with suspicious circumstances, undue influence is presumed
and the burden of proof shifts to the Will proponent to overcome the
there is undue influence in making of Will and transfer by Deed of a house by
persons in Confidential relationship, this could subject those persons to
punitive damages in some instances, plus voiding of the Will. In the Matter
of the Estate of Madeleine Stockdale, Deceased
196 NJ 275 (2008)

grievance based upon undue influence may be sustained by showing that the
beneficiary had a confidential relationship with the party who established the
account. See Estate of DeFrank, 433 N.J. Super. 258,
(App. Div. 2013) Accordingly,
if the challenger can prove by a
preponderance of the evidence that the survivor had a confidential relationship
with the donor who established the account, there is a presumption of undue influence,
which the surviving donee must rebut by clear and convincing evidence.

of Ostlund v. Ostlund
391 N.J. Super.
, 401 (App. Div. 2007).]

perhaps difficult to define, the concept "encompasses all relationships 'whether
legal, natural or conventional in their origin, in which confidence is
naturally inspired, or, in fact, reasonably exists.’” Pascale v. Pascale113 N.J. 20,
34 (1988) (internal citation omitted). "And while family ties alone may
not qualify, parent-child relationships have been found to be among the most
typical of confidential relationships." DeFranksupra,
slip op. at 13 (citing Ostlundsupra, 391N.J.
 at 401).
           In the context of inter vivos gifts,
"a presumption of undue influence arises when the contestant proves that
the donee dominated the will of the donor or when a confidential relationship
exists between the donor and done." Pascalesupra,
113 N.J. at 30 (internal citations omitted). "Where
parties enjoy a relationship in which confidence is naturally inspired or
reasonably exists, the person who has gained an advantage due to that
confidence has the burden of proving that no undue influence was used to gain
that advantage," In re Estate of Penna,322 N.J. Super.
, 423 (App. Div. 1999), and "the donee has the burden of
showing by clear and convincing evidence not only that 'no deception was
practiced therein, no undue influence used, and that all was fair, open and
voluntary, but that it was well understood.'" In re Estate of
349 N.J. Super.
, 522-23 (App. Div. 2002) (citing In re Dodge50 N.J. 192,
227 (1967)).

The person receiving gifts and greater benefit had a burden to
show no deception was practiced and that all of the transactions were fair,
open and voluntary, and that they were well understood.  

           Wills should be prepared without
undue influence. No one other than the person who is signing the Will should be
in the room. We usually request the person who wants the Will to fill out the
interview form themselves.

6. NJ
Inheritance tax
NJ Inheritance Tax Return instructions and NJ Estate Tax Forms were revised. Don’t
use old forms.  Even if no inheritance
tax due, a Tax Waiver on a house must still be obtained and filed if the house
was not co-owned by the spouse.

Power of Attorney-
Do not use a form purchased online.
       A Power of Attorney should contain reference
to the NJ statute requiring banks to honor the Power of Attorney. Section 2 of
P.L. 1991, c. 95 (c. 46:2B-11).

Federal Health Privacy Law (HIPAA)- Have a new Living Will prepared
         A federal regulation known as the
Health Insurance Portability and 
Accountability Act (HIPAA) was adopted regarding disclosure of
individually identifiable health information. This necessitated the addition of
a special release and consent authority to all healthcare providers before
medical information will be released to agents and interested persons of the
       The effects of HIPAA are far reaching, and
can render previously executed estate planning documents useless, without
properly executed amendments, specifically addressing these issues.
        Any previously executed Powers of
Attorney, Living Wills, Revocable Living Trusts, and certainly all Medical
Directives now require HIPAA amendments.   
         Powers of attorneys and Living Wills
should be updated to reference this new law. More information on the HIPAA law
       After you sign the
Living Will in your attorney’s office, provide a copy to your doctor and

9. Competency
required to sign a Will or Power of Attorney
law office cannot prepare a Power of Attorney, Will or any other legal document
unless a person is mentally competent. If someone is unable to come into our
office, we require the client or client’s family to have the treating Doctor
sign the “Doctor Certification of
Patient Capacity to Sign Legal Documents” It is the
client or client’s
family’s responsibility to contact the doctor, obtain the signed Certification
at the clients’ expense, and then provide the law office with the original
signed Certification. The law office cannot accept phone calls stating someone
is competent. Therefore, it is wise do have your documents drafted while you
can drive and are healthy.

More information on Wills and Probate

2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500

10. American Taxpayer Relief Act

     By the Greenbaum Rowe Law Office
        On January 1, 2013, Congress
passed the American Taxpayer Relief Act ("Act"). While certain
provisions of the Act are considered to be "permanent", an
overhaul of the Internal Revenue Code later this year or in a subsequent
year could impact certain of the "permanent" changes. An overview
of some of the Act's provisions, which are likely to be applicable to our
clients, is provided below.

Important Provisions Included in the Act 

       The old $5,000,000 gift and estate
lifetime exemption has been made permanent and will be adjusted annually
for inflation (IRS set it at $5,250,000 for 2013 and
for 2014
The $5,000,000 indexed exemption for the generation skipping transfer tax
has also been made permanent. Portability (i.e., the provision in the
estate tax law that allows a surviving spouse the benefit of the unused
lifetime exemption of his or her predeceased spouse) has also been made
permanent. The one downside of the new law is that the maximum estate tax
rate has increased from 35% to 40%.

Income Tax Rates

Ordinary Income.  
The new law increased the highest marginal federal income tax rate to 39.6%
for married couples filing jointly with $450,000 of taxable income, heads
of household filers with $425,000 taxable income, and single filers with
$400,000 of taxable income. The existing tax brackets for lower income
thresholds were not changed.
 Long Term Capital Gains.  
Although the long term capital gains rate remains at 15% for most filers,
those in the 39.6% tax bracket will be faced with a 20% capital gains rate
and a 3.8% additional investment surtax (which will be used to fund
Temporary Payroll Tax Cut Expires.  
For each of the past two years, FICA withholding on wages had been reduced
from 6.2% to 4.2% on the first $100,000 of wages. The new law does not
extend this payroll tax holiday. As a result, wage earners will see a
direct adverse effect on their paychecks (of up to $2,000 per year).


temporary tax provisions were extended for 2013, including but not limited
to the child tax credit, the earned income credit, the American Opportunity
tax credit, qualified tuition deductions, bonus depreciation, various
research and energy credits, the temporary exclusion of the gain on the
sale of certain small business stock, and the reduction of the recognition
period for built-in gains tax in the case of S corporations.

401(k) Conversions

January 1, 2013, 401(k) plans could be amended to permit participants to
convert pre-tax accounts, including amounts accumulated prior to 2013, to
designated Roth accounts within the same plan, without regard to the
participant's eligibility to take a distribution from the plan. Prior to
the enactment of the new law, 401(k) participants could only complete an
in-plan Roth conversion with respect to the portion of their account
balance that was otherwise distributable under the terms of the plan, such
as on account of severance from employment, attainment of a particular age
(e.g., 59½ ) or disability. Pre-tax contributions, and earnings on such
amounts, that are converted to a designated Roth account are includable in
the participant's gross income in the year of the conversion. Subject to
certain timing and other restrictions, however, all Roth 401(k)
contributions and earnings may be withdrawn tax-free. The new, more
flexible Roth conversion rules also apply to 403(b) and governmental 457(b)

Charitable Distributions from IRAs

Act reinstates, through the end of 2013, the ability for individuals aged
70½ or older to make "qualified charitable distributions" from
their traditional or Roth IRAs to certain charitable organizations without
having to include such amounts in gross income or take a charitable
contribution deduction. To constitute a "qualified charitable distribution,"
the amount(s) donated by an IRA owner must, among other requirements, be
transferred directly from the IRA to the recipient charity and cannot
exceed the aggregate amount of $100,000 in a single taxable year. Although
excludible from gross income, qualified charitable deductions still count
toward the annual "required minimum distribution" that generally
must be taken by an IRA owner beginning in the calendar year after
attaining 70½ years of age. Under special rules applicable for 2012, a
taxpayer may make a qualified charitable distribution in January 2013 and
elect to treat it as having occurred in 2012. In addition, a taxpayer may
retroactively elect to treat an IRA distribution received in December 2012
as a qualified charitable distribution for that year, provided, among other
requirements, that cash in the distribution amount is transferred to the
charitable organization in January 2013.

Planning Opportunities and Next Steps

     As a result of the stability provided
under the Act in the estate and gift tax areas, it is now an opportune time
for individuals to review their personal situations and consider moving
forward with certain wealth transfer transactions or changes to their Wills
which may have been put on hold. In addition, individuals with significant
holdings in a 401(k) plan or an individual retirement account or annuity,
may want to revisit the possibility of making a Roth election or
contributing retirement holdings to a charity. The 4.6% increase in the
highest marginal federal individual income tax rate makes contributions to
qualified retirement plans more attractive than they have been in the last
few years.

you to the
Greenbaum Rowe Law Office  
Tax, Trusts
& Estates Department
for this information