Wills, Trusts & Estates Insights — Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events

Estate Planning After Divorce: Revisit Your Beneficiary Designations or Your Estate Could Pay the Consequences

Published on: February 19, 2026 | by Elizabeth Engert Manzo and Meghan Lawlor

Many people direct the disposition of their bank accounts, investments, retirement accounts and life insurance upon their death by designating beneficiaries of those assets. When an asset passes by beneficiary designation, otherwise called a pay-on-death provision, it becomes a non-probate asset and therefore passes outside of a person’s probate estate.

In New Jersey, New York, and Pennsylvania, among other states, a divorce automatically revokes any provisions in a will which benefit a former spouse, unless the will expressly states otherwise. Similarly, New Jersey statute 3B:3-14 provides that a divorce revokes any revocable appointment directing the disposition of property – such as a beneficiary designation – to a former spouse unless the governing instrument, court order, or divorce agreement dividing marital assets expressly states otherwise.

This year, the New Jersey Supreme Court considered whether a decedent’s pay-on-death provision on his U.S. savings bonds survived his divorce and satisfied the terms of his divorce settlement agreement (“DSA”). The decedent, Michael Jones (“Michael”), bought Series EE U.S. savings bonds while married to Jeanine Jones (“Jeanine”) and named her as the pay-on-death beneficiary of the bonds. When Michael and Jeanine divorced in 2018, the DSA required Michael to pay Jeanine $200,000 over time and also stated that any marital asset not specifically listed in the DSA “belong[ed] to the party who ha[d] it currently in their possession.” The DSA did not explicitly mention the savings bonds.

Timely Mailing May Not Be Timely Filing – Change to U.S. Postal Service Rules

Published on: February 19, 2026 | by Anne Marie Robbins

On November 24, 2025, the U.S. Postal Service (“USPS”) finalized a rule regarding when and how postmarks are applied. See 39 C.F.R. § 111 (2025). It is important for taxpayers and their advisors to be aware of the change because it has an impact on proving that a document was filed. While the rule does not change how mail is processed, it does change how postmarks should be understood, especially when deadlines matter.

What Changed?

While postmarks have long been relied upon as evidence that a document was mailed on a certain date, the new rule makes clear that this assumption is not always accurate. In most cases, postmarks are applied by automated machines at regional processing facilities, and not at the local post office where a piece of mail is dropped off. As a result, the date printed on a postmark may reflect the date the piece was first processed—not the date it was actually placed in the mail or collected by the USPS.

Federal Transfer Tax Exemptions for 2026

Published on: February 11, 2026 | by Anne Marie Robbins

As a result of the 2025 tax legislation passed in July of last year, there has been a significant increase in the estate, gift, and generation-skipping transfer tax exemptions to $15 million effective January 1.

The increase means that in 2026, an individual may make gifts during life or at death totaling $15 million without incurring gift or estate tax, and a married couple will be able to transfer $30 million of assets free of transfer taxes.

The annual gift tax exclusion provided by Code section 2503 remains at $19,000 per donee (or $38,000 if spouses elect gift-splitting).

A Greener Garden State: Human Composting Legalized

Published on: October 10, 2025 | by Elizabeth Engert Manzo

On September 12th, 2025, Governor Murphy legalized “natural organic reduction” making New Jersey the 14th state to permit the composting of human bodies as an alternative to traditional burial or cremation. While the Board of Mortuary Science has yet to issue regulations which will govern the process, funeral businesses are expected to become licensed and start offering this service, also known as “controlled supervised decomposition,” by July 2026.

Advocates state that human composting is environmentally friendly because it does not use toxic embalming chemicals, uses less energy, and releases less carbon into the atmosphere than cremation. It also requires less land and leaves less of a carbon footprint than traditional burial.

Human composting uses a closed reusable vessel, along with other organic materials, to encourage natural decomposition over a 30 to 45 day process. Approximately 1 cubic meter of nutrient rich soil is created to support the ecosystem. Safety protocols, consumer protections, as well as how and where the transformed soil can be utilized will be clarified in the regulations.

How H.R. 1 Reshapes Estate Planning for Individuals, Families, and Business Owners Alike

Published on: July 30, 2025 | by Elizabeth Candido Petite

The recent enactment of H.R. 1, commonly known as the “One Big Beautiful Bill Act,” or the “Act,” which has been signed into law, includes a critical provision that permanently and significantly increases the federal estate and gift tax exemption amounts. This will have a profound impact on wealth transfer strategies and may require the review and updating of existing estate plans.

For years, families and their advisors have navigated the complexities of fluctuating tax laws, often planning around temporary provisions and sunset clauses. This new law provides a welcome measure of certainty and offers opportunities for high-net-worth families and owners of closely held businesses to refine their legacy plans.

The Game-Changer: A Permanent Increase in Exemption

Estate Planning for Business Owners: Avoiding Family Disputes

Published on: July 8, 2025 | by Elizabeth Candido Petite

When the founder of a family-owned business passes away, the impact can be both financial and personal. Even successful companies can face significant conflict if there isn’t a clear plan for how ownership and control will transfer to the next generation. This risk is particularly high when some children are actively involved in the business while others are not.

For example, one child might be managing job sites, handling bonding, or overseeing client relationships, while their siblings may have different responsibilities at the company or no involvement in the business. If the owner dies and leaves the business equally to all children, disagreements about leadership, control, pay, and profit distribution can quickly harm both the business and family relationships.

Fortunately, with proper planning, these conflicts can be avoided.

Umbrella Liability Insurance

Published on: January 17, 2025 | by Elizabeth Candido Petite

Clients often ask about ways to protect their assets and limit liability in the event of future creditors. Transferring assets to trusts, limited liability companies, or into the names of others (for example, a spouse or child) may work in some instances but all have their drawbacks. Some states allow a grantor to create a self-settled asset protection trust, which safeguards assets from creditors and keeps the assets available to the grantor. However, New Jersey law does not allow such trusts. Limited liability companies provide protection for legitimate business or income-producing endeavors, such as a rental property, but not for personal assets. And spouses may be liable for their partner’s debts in certain circumstances. What, then, can be done?

One option to consider is purchasing umbrella liability insurance. An umbrella policy provides additional coverage beyond the limits of homeowners or auto insurance policies. An umbrella policy typically covers the following:

Personal injury

Charitable Residuary Beneficiaries Under a Will

Published on: January 17, 2025 | by James K. Estabrook and Gozde Celik

For many, designating a portion of one’s estate to charities and charitable purposes is an essential and significant part of their Last Will and Testament. Those seeking to make contributions to causes and organizations they are passionate about should be wary of the costs entailed in how such contributions are distributed. Under New Jersey law, when such contributions are designated in the form of a residuary bequest, the State Attorney General is required to exercise its power to protect the public’s interest in charitable gifts and seek costly accounting and lengthy review services, which ultimately drain the estate of funds it could have extended to the aforementioned charitable causes and organizations.

Under N.J. Ct. R. 4:80-6 and R. 4:28-4, the New Jersey State Attorney General is required to review and approve the accounting and administration of an estate when the estate leaves a residuary, or percentage, amount to a charitable organization. The Office of the Attorney General will require the filing of: (1) intermediate and/or final Accounting; (2) statement and calculations of any commissions paid to trustees or executors; (3) final distribution and disbursement schedule of bequests; (4) affidavit of any attorney’s and accountant’s rendered services; and (5) Refunding Bond and Releases executed by the charitable beneficiaries.

After receiving such documentation, the Attorney General’s office must approve the amount the charitable beneficiaries are being given, and such approvals could face backlogs and other administrative delays. Further, a thorough examination into the charitable organization could jeopardize its ability to receive its bequest and could even result in a court redirecting the bequest to a different charity under the cy pres doctrine, as a recent decision in the Appellate Division revealed. See Matter of Estate of Heinecke, No. A-3604-21, 2024 WL 1125186 (N.J. Super. Ct. App. Div. March 15, 2024).

Transfer Tax Exemptions for 2025

Published on: January 17, 2025 | by Anne Marie Robbins

On October 22, 2024, the IRS issued Revenue Procedure 2024-40 setting forth the inflation adjusted transfer tax exemptions for 2025. The Basic Exclusion Amount (BEA) will be $13,990,000. The increase means that in 2025, an individual may make gifts during life or at death totaling $13,990,000 without incurring gift or estate tax; a married couple will be able to transfer $27,980,000 of assets free of transfer taxes. The Generation-Skipping Transfer (GST) Exemption under section 2631 of the Code will also increase to $13,990,000.

The annual gift tax exclusion provided by Code section 2503 will increase in 2025 to $19,000 per donee (or $38,000 if spouses elect gift-splitting).

The gift tax annual exclusion for gifts to non-citizen spouses as set forth in Code sections 2503 and 2523(i)(2) will increase to $190,000.

“Smaldino v. Commissioner”: An Estate Planning Cautionary Tale

Published on: December 18, 2024 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

A recent Tax Court case, Smaldino v. Commissioner, T.C. Memo. 2021-127 (Nov. 10, 2021), emphasizes the need to ensure that the phases of transactions are completed properly, and certain formalities are observed in order for an estate planning strategy to be successful. It is important to be careful even (and perhaps especially) in the case of emergency planning (i.e., planning because of health scares or impending tax law changes).

In the Smaldino case, rushed planning caused a tax deficiency that may have been avoided with a team of advisors working together to ensure that Mr. and Mrs. Smaldino’s plan was properly implemented.

Mr. and Mrs. Smaldino were married in 2006. Mr. Smaldino had six children from a prior marriage and 10 grandchildren. Mr. Smaldino was a CPA turned real estate investor, with a real estate portfolio worth approximately $80 million. Mrs. Smaldino held a master’s degree in economics and had worked in her husband’s business for many years.