close
  • May 24, 2021Norris McLaughlin Attorneys Represent Firm in Meritas® Leadership Roles

    Steven A. Karg, a Member of law firm Norris McLaughlin, P.A., and one of the firm’s Meritas® Member Contacts, has been appointed to the Meritas U.S. Leadership Committee. “Being dedicated to building the relationship with other Meritas firms, it is my pleasure and honor to serve as the firm’s representative for the United States Leadership Committee,” said Karg.

    Melissa A.  Peña, a Member of the law firm and one of the firm’s Meritas Member Contacts, has been appointed to the Executive Committee of Meritas as Chair of its Finance Committee, and as Chair of the Meritas Women’s Leadership Congress Leadership Council. Peña commented, “It is my honor to lead this incredibly talented group of women with the common goal to increase and support female leadership within Meritas and, in so doing, show women how to leverage those leadership skills into more visible roles within their firms, as well as identify resources and programs that can help to inform policies and guidelines to improve diversity and gender equality within the legal industry.”

    In addition, Jill Lebowitz, a Member of the firm and Co-Chair of its Estate, Trust, and Tax Law Practice Group, serves on the Meritas U.S. Trusts and Estates Industry Group Steering Committee, and Shauna M. Deans, an Associate of the firm, will participate in the Meritas Black Lawyers’ Forum.

    About Meritas®

    Meritas® is an established global alliance of more than 180 independent, full-service law firms, with a comprehensive means of monitoring and enhancing the quality of its member firms—a process that saves clients time in validating law firm credentials and experience. Firms become members by invitation only and maintain membership by meeting the standards of a uniquely comprehensive Quality Assurance Program. Firms are regularly assessed and recertified for the breadth of their practice expertise and client satisfaction. Firm quality feedback is reflected in a Satisfaction Index score, which is available online. As the only Meritas firm in New Jersey, Norris McLaughlin enjoys an international reputation for excellence through its membership.

    About the Attorneys

    Steven Karg

    Karg focuses his practice on commercial litigation with an emphasis on products liability and consumer claims defense. He served a term on the Meritas Board of Directors and its Quality Assurance Committee. Karg is a past President of the Somerset County Bar Association, a member of the New Jersey Defense Association, a Former Chairperson of its Products Liability Committee, and a member of the Defense Research Institute as well as its Products Liability and Drug & Medical Device Committees.

    Karg has spoken about products liability issues to many organizations, and he is a co-author of the annual edition of “New Jersey Products Liability and Toxic Torts Law,” published by Gann Law Books. He earned his J.D., cum laude, from Seton Hall University and his B.S., magna cum laude, from Trenton State College in Mechanical Engineering Technology.

    Melissa Peña

    Peña, Chair of the firm’s Bankruptcy & Creditors’ Rights Practice Group, a member of the Management Committee, and Chair of its Diversity & Inclusion Committee, concentrates her practice in the areas of bankruptcy, commercial litigation, and mortgage foreclosures. Whether inside or outside the courtroom, Peña aims to find practical business solutions for her clients. She utilizes litigation as a tool to further her client’s business objectives in a cost-effective manner.

    Peña serves on the Board of Directors for Meritas, as Chair of the Meritas Finance Committee as an Executive Committee Member, and as Co-Chair of its Financial Services/CRABS Section. She is also a member of the Bankruptcy Inn of Court, New York County Lawyers’ Association, and National Association of Women Lawyers. Peña earned her J.D., cum laude, from The American University Washington College of Law in 2003 and her B.A., magna cum laude, in Political Science, from George Washington University in 2000.

    Jill Lebowitz

    Lebowitz devotes her practice to estate planning, trust and estate administration, and counseling tax-exempt organizations. She is a Fellow of The American College of Trust and Estate Counsel (ACTEC), a national organization of approximately 2,500 lawyers elected to membership by demonstrating the highest level of integrity, commitment to the profession, competence, and experience as trust and estate counselors.

    Lebowitz is a Past Chair of the New Jersey State Bar Association’s Real Property, Trust & Estate Law Section, and continues to serve on the Section’s Board of Consultors. She is also a Past President of the Greater Middlesex/Somerset Estate Planning Council and continues to serve on its Board of Trustees. Lebowitz earned her LL.M. in Taxation from New York University School of Law, her J.D. from Rutgers University School of Law—Newark, and her B.A. from New York University.

    Shauna Deans

    Deans, a member of the firm’s Diversity & Inclusion Committee, focuses her practice on estate planning and administration, including inheritance and gift taxation. She counsels beneficiaries and fiduciaries of estates and trusts on marshaling assets, issues regarding basis, and maximizing of tax savings. Deans is also certified by the State of New Jersey as a civil mediator and has assisted parties in the settlement of special civil, small claims, and landlord/tenant matters on behalf of the Court. Deans received her J.D. from Howard University School of Law in 2010, and her B.A., magna cum laude, from Spelman College in 2007.

    Posted in: Jill Lebowitz, Melissa A. Peña, News, Shauna M. Deans, Steven A. Karg | Tags: , , ,

  • Mar 26, 2020Tension Between Site Remediation and Expeditious Estate Administration

    When considering environmental liabilities in the context of an estate administration, property owners can take proactive steps to abate the risk, or at least make it more manageable for their heirs.

    Claims Against Estates 

    Environmental liabilities generally do not lend themselves to the typical resolution procedure applicable to non-environmental liabilities in estate administrations. Generally, a creditor of a decedent has nine months from the date of the decedent’s death to present a claim in writing to the executor or administrator of the decedent’s estate (collectively “Personal Representative”; N.J.S.A. 3B:22-4). If a creditor fails to present a claim within the nine-month period, the Personal Representative is not personally liable to the creditor with respect to any assets that the Personal Representative may have delivered or paid in satisfaction of any lawful claims, devises, or distributive shares. Id. After the expiration of the nine-month period and distribution of estate assets, creditors can still pursue their claims against estate beneficiaries under their Refunding Bonds (N.J.S.A. 3B:22-16).

    However, Personal Representatives of estates whose decedent held potentially contaminated real property, in his or her individual name or in a general partnership, face unique and difficult challenges in attempting to satisfy obligations under environmental law within the statutory framework discussed above. There are two distinct reasons for this difficulty: (a) environmental liabilities of estates often have not been quantified, an often-lengthy process; and (b) long-tail obligations may attach when an environmental remediation leaves contamination on-site and engineering and institutional controls are utilized.

    The enactment of the Site Remediation Reform Act (SRRA) in 2009 should have largely eliminated the first problem, since all properties with historical (pre-SRRA) contamination should already have been reported and investigated. Unlike the Industrial Site Recovery Act (ISRA) (which mandated remediation of only a subset of properties—generally properties with operating manufacturing, and certain warehousing and service businesses—and only upon their sale or closure), the SRRA required reporting of all properties with known contamination and set forth a strict schedule for completion of investigation (five years from the 2012 effective date, i.e., 2017) and remediation (10 years, i.e., 2022). Thus, by now, all contaminated properties existing in 2009 should have been identified, the investigation completed, and the remediation well underway.

    The reality, however, is different. Without a pressing transaction and the attendant infusion of funds, many owners of historically contaminated properties, especially those with no current productive use, simply have not complied with the SRRA’s mandates. Unlike ISRA matters, without a purchaser pushing for compliance and without an infusion of new funds, many owners felt neither the pressure to report nor the ability to fund an investigation and remediation; thus, their property remains unaddressed.

    However, upon the death of the property owner, the Personal Representative of the property owner’s estate now has the compliance obligation and should not risk sanctions for non-compliance. Naturally, the Personal Representative will face challenges in selling real property that needs to be liquidated for the payment of debts, expenses, and taxes, and for ultimate distribution to the beneficiaries. Where property is specifically bequeathed, the beneficiary is faced with the decision of whether to disclaim the property (a decision that must be made, pursuant to Internal Revenue Code Section 2518, within nine months of death to avoid U.S. Gift Tax consequences), or perhaps assert claims against the remainder of the estate for additional funds to investigate and remediate the contaminated property.

    Timing Challenges

    Personal Representatives face the timing challenges posed by the fact that the Preliminary Assessment, Site Investigation and Remedial Investigation (“PA,” “SI” and “RI,”) process can take several years. With the SRRA’s creation of the Licensed Site Remediation Professional (LSRP), the delay of seeking NJDEP approval at each step of the remedial process has been reduced. Nevertheless, inherent delays are associated with the process of preparing the PA, SI and RI. In addition, the finality of the “end” of the remedial process, the issuance of a Remedial Action Outcome (RAO), is subject to a three-year period during which NJDEP can audit and overturn the RAO.

    The other timing issue is that the obligations of the Responsible Party (RP) may never end. If contaminated soils are left in place under an impermeable cap (typically pavement, building slab, engineered greenscape, etc.), subject to a deed notice (often the only rational and cost-effective remedy), it is accompanied by a Soils Remedial Action Permit (Soils RAP). The RP is perpetually the permittee, although the then-current owner is a co-permittee. The Soils RAP requires inspection and maintenance of the cap, annual inspection, biennial report, annual fee, and perpetual establishment and maintenance of “hard” Financial Assurance (FA) in the form of a letter of credit, line of credit, or fully-funded trust in the amount of the net present value of performing the permit conditions.

    Matters involving groundwater contamination may require groundwater treatment, but even then, the very stringent State Groundwater Quality Standards (GWQS) are often not achieved.   In those fairly typical situations, the only remaining remedy is Natural Monitored Attenuation.  That means natural dilution and degradation processes are modeled, and a projection of the size and duration of the contaminated plume is calculated. The RP is obligated to periodically (typically annually, sometimes for 20 years or more) sample the groundwater plume for the calculated duration to ascertain that the GWQS have been achieved. If they have not, then the RP may have to extend the period of monitoring, or in some circumstances, implement additional remedial measures. These obligations are incorporated into a Groundwater RAP. As with a Soils RAP, the original RP is perpetually a permittee, with the current property owner a co-permittee. Unlike a Soils RAP, no FA is required.

    Dealing with Environmental Liabilities in Estate Administration

    Statutory liability for environmental liabilities is generally fixed, but the amount and timing of the payment obligation are uncertain, particularly where the investigative and remedial process is ongoing. In that circumstance, the Personal Representative would be ill-advised to distribute estate assets, even upon receipt of refunding bonds from all beneficiaries, without establishing an adequate reserve for environmental liabilities (See, N.J.S.A. 3B:22-11). But in the context of environmental liabilities, what amount will be adequate?

    Naturally the most conservative approach would be for the Personal Representative to keep the estate open and retain all assets available to satisfy the estate’s remedial obligations until completion. However, as indicated above, resolution may not come for many years after the decedent’s death, leading the Personal Representatives to seek alternatives to expedite distribution of estate assets to beneficiaries to the extent possible without exposing themselves to personal liability.

    One approach could be for the Personal Representative to seek an LSRP’s guidance to calculate an adequate reserve for environmental obligations and incorporate that reserve into an application for approval of a formal judicial accounting and discharge, putting the DEP on notice as an interested party. While liability may still exist for the beneficiaries under their refunding bonds, a discharge orchestrated in this manner should serve to exonerate the Personal Representative from personal liability for making distributions in excess of the reserve (See, N.J.S.A. 3B:17-8).

    The Personal Representative may also want to seek advice and direction from the court in certain situations before expending estate assets on environmental investigation, remediation and clean-up costs. For example, residuary beneficiaries and specific devisees of contaminated real property are likely to differ on the extent to which estate funds should be expended on environmental remediation costs, particularly where the liquid assets of the estate are not significant in relation to the potential exposure. An action for advice and direction gives all parties the opportunity to be heard and can protect the Personal Representative from potential breach of fiduciary duty claims.

    In sum, when considering environmental liabilities in the context of an estate administration, the adage “the best defense is a good offense” is apt. A review of the case law and statutes regarding environmental liability reveals that transparency is key. Property owners who know their property may be susceptible to environmental liability claims should be upfront with their executors, trustees, beneficiaries, and heirs to make them aware of potential issues facing properties that these people will come to own and/or manage. Transparency will also empower fiduciaries and/or beneficiaries to preserve the defenses available to them under state and federal environmental liability laws. For example, under both the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA) (federal law) and the New Jersey Spill Compensation and Control Act (NJ Spill Act) (state law), the “innocent purchaser” defense is available to subsequent titleholders of contaminated property who are able to prove that they made reasonable and appropriate inquiry into the condition of the property, the past owners of the property, and previous uses of the property; and to those who have not contributed to the contamination. Without knowledge of a potential contamination problem, or the threat thereof, subsequent titleholders are not likely to engage in a high level of due diligence prior to taking title to a property.

    In addition to preserving defenses available to a subsequent titleholder, being transparent in acknowledging and investigating the source of the problem may also highlight any right to contribution from previous owners or dischargers that the property owner may have. Such defenses may be preserved and carried forward by the Personal Representative or heirs upon the property owner’s death.

    Finally, although there is no way to totally remove the specter of environmental liability issues cast upon fiduciaries, beneficiaries, and heirs, a property owner facing these challenges can take proactive steps to abate the risk or make it more manageable for those they leave behind.

    Edward A. Hogan is co-chair of the Environmental Law Group at Norris McLaughlin in Bridgewater. James J. Costello Jr. is co-chair of the firm’s Trust, Estate, and Individual Tax Group. The authors are grateful for the assistance of their colleagues, Nicholas J. Dimakos and Shauna M. Deans, who are associates at the firm.

    Reprinted with permission from the March 25, 2020, issue of the New Jersey Law Journal. © 2020 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

    Posted in: Edward A. Hogan, Environmental, Estate Planning & Administration, James J. Costello, Nicholas J. Dimakos, Shauna M. Deans |

  • Feb 05, 2020The Secure Act and Its Impact on Your Estate Plan

    As the festivities of the New Year have waned and we approach Tax Season, we bring you news of a recent legislative development that warrants your attention and may require changes to your estate plan. During the final weeks of 2019, Congress enacted federal tax legislation known as the “SECURE Act.”

    The SECURE Act

    The law makes important changes to the federal tax code that will impact distributions from retirement accounts such as 401(k)s, 403(bs)s, IRAs, and tax-qualified annuities (referred to in this legal advisory collectively as “Retirement Accounts”). Those changes may affect you during your lifetime and may also affect the way Retirement Accounts are distributed to your beneficiaries after your death. Consequently, the law may also limit your ability to protect retirement accounts from your beneficiaries’ creditors in a tax-efficient manner.

    This legal advisory summarizes the key aspects of the SECURE Act, which is effective as of January 1, 2020, that may affect your estate plan. We hope you find it helpful in understanding certain major changes enacted by this legislation and how they might affect you. However, bear in mind that the law will affect everyone differently. Therefore, we strongly urge you to contact our office to arrange a time for us to discuss this new law in detail, so that we may act to make any necessary revisions to your estate plan as soon as possible.

    Changes Affecting You

    One component of the SECURE Act that will affect many people during their lives is a change in the age at which a person must begin taking distributions from a Retirement Account. Prior to the SECURE Act, most people (except those who were not yet retired) were required to begin taking distributions from Retirement Accounts by April 1st of the year following the year in which they reached age 70 ½. Under the SECURE Act, the age is increased to 72 for those who were not yet required to take distributions under the old law.

    Also, the SECURE Act removes the age cap for funding traditional (non-Roth) IRAs, meaning that qualifying individuals over age 70½ are now eligible to make deductible and nondeductible contributions to a traditional IRA (and may, in some instances, present additional opportunities for funding a Roth IRA).

    These changes involve additional detail and nuance beyond the summary provided in this Alert and may present an opportunity for some to take further advantage of the tax-deferred savings offered by Retirement Accounts. Feel free to reach out to any member of the Norris McLaughlin Trust, Estate, and Individual Tax Law Practice Group to discuss those opportunities in coordination with your accountant or financial advisor.

    Changes Affecting Your Beneficiaries

    Perhaps the most significant changes concerning estate planning brought about by the SECURE Act regard how Retirement Accounts are distributed after the account holder’s death to avoid penalties while continuing to defer taxes. Under prior law, it was possible to “stretch” the distribution of inherited Retirement Accounts over the life expectancy of a beneficiary. Beneficiaries were required to take a required minimum distribution each year based on their life expectancy and the undistributed balance of the Retirement Account could continue to grow income tax-free. Better yet, leaving the balance of a Retirement Account to a trust, properly drafted to meet IRS requirement, for the benefit of a beneficiary, could protect retirement benefits from the beneficiary’s creditors and ensure that those benefits remain in the family upon the beneficiary’s death, while still benefiting from income tax-free growth for the undistributed portion of the Retirement Account.

    The SECURE Act has changed those rules so that most beneficiaries will be required to receive the full amount of an inherited Retirement Account within 10 years of the death of the person who funded the Retirement Account. Certain beneficiaries, including your spouse; your minor children (but not grandchildren); and beneficiaries who are disabled, chronically ill, or no more than 10 years younger than you, are exempt from the 10-year rule and are still permitted to take distributions over their expected lifetimes (although, children who are minors at the time of inheritance must now take the full distribution within 10 years of reaching the age of majority). However, Retirement Accounts left to those beneficiaries in trust might not qualify for the life expectancy payout, depending on the terms of the trust. Even special needs trusts might require review, as they must be structured narrowly to ensure that the stretch is preserved. Provisions that allow the trust to benefit another individual might be problematic.

    The good news is that the SECURE Act does not change the method of designating your beneficiaries to receive Retirement Accounts. If you have existing beneficiary designations in place, those designations are still valid. However, the SECURE Act does introduce a host of new considerations that must be taken into account when structuring your estate plan to maximize the benefit of Retirement Accounts and best protect your beneficiaries.

    Unfortunately, Congress gave us little warning that these changes were imminent. Accordingly, estate plans that previously offered a sound approach to planning for Retirement Accounts may no longer provide a good solution.  For example, some of you may have plans in place that leave Retirement Accounts to a trust known as a “Conduit Trust.” All distributions from Retirement Accounts paid to a Conduit Trust must be distributed directly from the Trust to the beneficiary. That might have been a good approach under the old law since distributions could be stretched over the expected lifetime of the trust beneficiary. However, under the SECURE Act, that same Conduit Trust might now require distribution of the entire Retirement Account to the beneficiary within 10 years of the death of the account owner or upon a minor child reaching the age of majority. Depending on the circumstances, under the SECURE Act, other planning techniques might better serve the goals those plans are meant to achieve.

    Take Action

    With the implementation of the SECURE Act effective January 1st of this year, we recommend that we review your estate plan as soon as possible to ensure that it disposes of your Retirement Accounts in keeping with your objectives.  We welcome the opportunity to discuss these changes with you, answer any questions you may have, and make recommendations specifically for you. Please contact our office to arrange a meeting or phone conference at your earliest convenience so that we can help you find the best planning solutions to meet your needs and those of your family.

    Note:  The contents of this letter are for informational purposes only and are not intended to constitute legal advice or form an attorney-client relationship. For information and advice particular to your situation, please contact one of the following attorneys in our Trust, Estate & Individual Tax Practice Group:  A. Nichole Cipriani, James J. Costello, Jr., Shauna M. Deans, Nicholas J. Dimakos, Robert E. Donatelli, Victor S. Elgort, Hon. Emil Giordano (Ret.), Christopher R. Gray, Judith A. Harris, Abbey M. Horwitz, Dolores A. Laputka, Jill Lebowitz, Kenneth D. Meskin, Michael T. Reilly, Shana Siegel, Milan D. Slak.

     

    Posted in: A. Nichole Cipriani, Abbey M. Horwitz, Christopher R. Gray, Dolores A. Laputka, Estate Planning & Administration, Hon. Emil Giordano (Ret.), James J. Costello, Jill Lebowitz, Judith A. Harris, Kenneth D. Meskin, Michael T. Reilly, Milan D. Slak, Nicholas J. Dimakos, Robert E. Donatelli, Shana Siegel, Shauna M. Deans, Taxation, Victor S. Elgort |

  • Aug 12, 2019Norris McLaughlin Expands Estate Planning and Administration Group

    The law firm of Norris McLaughlin, P.A., is pleased to welcome Shauna M. Deans as an Associate of the firm.  She joins the firm’s Estate Planning & Administration Practice Group.

    “Joining Norris McLaughlin is an exciting step in my career. I’m looking forward to working with such a great team and putting my knowledge and experience to use for the firm’s clients,” Deans said.

    Deans focuses her practice on estate planning and administration, including inheritance and gift taxation. She is experienced in preparing estate and inheritance tax returns, and responding to and resolving audits of the returns. Deans counsels beneficiaries and fiduciaries of estates and trusts on marshalling assets, issues regarding basis, and maximizing of tax savings.

    “With the addition of Shauna, we are expanding our team of estate planning and administration attorneys to better serve our clients and their needs. With her breadth of knowledge, Shauna will be a valuable resource to not only the group, but the entire firm,” stated James J. Costello, Jr., Co-Chair of the firm’s Trust, Estate, and Individual Tax Group.

    Deans is also certified by the State of New Jersey as a civil mediator, and has assisted parties in the settlement of special civil, small claims, and landlord/tenant matters on behalf of the Court.

    While attending law school, Deans served as a Senior Articles Editor for the Howard Law Journal, where her article entitled “The Forgotten Side of the Battlefield in America’s War on Infidelity: A Call for the Revamping, Reviving, and Reworking of Criminal Conversation and Alienation of Affections,” was published. During and after law school, she clerked for the Honorable Frederick J. Schuck, Superior Court of New Jersey, Camden County, Law Division.

    Deans received her J.D. from Howard University School of Law in 2010, and her B.A., magna cum laude, from Spelman College in 2007.

    Posted in: Estate Planning & Administration, News, Shauna M. Deans | Tags: , ,

Categories