Legal Question in Wills and Trusts in New Jersey

Re: No Will

Your husband and brother-inlaw should execute a shareholders' agreement to arrange for the business affairs on the death or disability of either shareholder.

Ronald J. Cappuccio, J.D., LL.M.(Tax)

(856) 665-2121

Re: No Will

First, understand that the asset involved is the stock shares in the S corp, not the underlying asset owned by the corporation. If your brother-in-law died, the question is who would inherit his shares. New Jersey's intestacy laws would govern - with spouces and children, if any, getting the shares. If there are none, parents are the next to inherit, if none then siblings (brothers and sisters). It would appear that as a step-brother, your husband would be the inheritor.

More important, is the fact that your brother-in-law has no will, but potentially substantial assets. There could be estate tax ramifications, both federal and NJ, depending upon the value of the stock.

I suggest proper estate planning, which, at a minimum, should include a Will.

Since there are potential tax questions, perhaps there is a need for more sophisticated planning, to minimize or eliminate the tax potential. This could include the use of an irrevocable trust and, possibly, a voting arrangement on the shares of stock.

There are important questions to be resolved and the cost for proper document preparation and disposition of the shares is minimal compared to the potential taxes involved.

I can assist and if there is interest, I can be reached at (973)-377-3313 or by e-mail [email protected]

Walter

Re: No Will

You raise two very interesting and different questions. As to your husband's step-brother, his interest would go to his next of kin if there is not will or stockholders agreement to the contrary. It is treated like any other stock.

As to your brother-in-law, the next of kin would share equally in his estate without a will. The in-laws would not receive anything unless named in a will. If you or your relatives need more advise, please contact us. If you mention Law Guru, the first consultation is free. Good luck.

Bernard J. Berkowtiz

973-808-2003