New Jersey Lawyers Blog

Published on: March 9, 2015

New Jersey Pet Trusts Ensure Your Pets Are Cared For During Their Lives

Many people feel that their pets are members of their family and want to make sure that their pets will be well cared for in the event of their death or incapacity. You must plan if you want to make sure that someone will care for your pet were you to pass away or become incapacitated, since that is not necessarily the case and people and normally under no obligation to do so. As a result, pets are often abandoned after their owners are no longer able to care for them.

In order to ensure that your beloved pets continue to be cared for, you can establish an “animal care trust,” which will designate a caregiver, provide funding for your pet’s care and appoint a trustee to fulfill the terms of the trust. New Jersey is one of forty-six states which have laws allowing for the creation of a pet trust. These trusts are gaining in popularity with pet owners who love their pets and want to guarantee that their pets are well cared for, and want to determine who will provide that care.

New Jersey law, NJ ST 3B:11-38, authorizes the creation of an animal care trust. The trust must be created specifically for the purpose of providing care for a domestic animal. It is only permitted to last for a period of 21 years, or the life of the pet (whichever is shorter). The trust must designate who shall be the caregiver of the pet in the event you are no longer able to provide such care. It must also designate a trustee who will be charged with carrying out the terms of the trust. TheTrustee will ensure that the pet is delivered to the caregiver and will oversee disbursement of the funds in the trust for the purposes of caring for the pet. The trust should designate an alternate caregiver and an alternate trustee to serve if the primary caregiver and/or trustee are not able or willing to do so. The principal and income of the trust must only be used to provide care for the pet. The trust must also designate who will receive any funds remaining upon the trust’s termination. The trustee’s final duty under the trust shall be to transfer the unused trust property pursuant to the terms of the trust.

Typically, an animal care trust will direct the trustee to utilize the principal and income of the trust as the trustee deems necessary for the care, maintenance and medical treatment of the pet. The caregiver must request funds from the trustee, and the trustee must decide if the funds should be paid out of the trust.
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Published on: September 5, 2014

Retainage in New Jersey Construction Law

by Maurice W. McLaughlin

Retainage in New Jersey Construction Law

One of the areas which our construction lawyers often address is retainage.

The Use Retainage in New Jersey Construction Law

Retainage is an important device in construction law. Our attorneys have helped New Jersey contractors, subcontractors, owners and construction suppliers with issues related to retainage.

Retainage is an amount intentionally withheld from payment. It may be withheld by an owner from payment to a contractor, from a general contractor, to a subcontractor, or from a subcontractor to a lower tier subsubcontractor.

Retainage in Construction Contracts & Drafting Effective Retainage Provisions

Retainage is a creature of contract law. It is governed by the provisions of the contract or subcontract between the parties. Whatever the contract says about retainage will control; and if retainage is not provided for in the contract, it is not allowed.

Since the terms of the retainage are governed by the terms of the contract or subcontract, drafting the contract is extremely important. It is essential to have an experienced attorney on your side. Our construction attorneys negotiate and draft contracts, subcontracts and supplier contracts. We review construction contracts for our clients and advise them on their rights and responsibilities.

Litigation Over Construction Disputes

Disputes are common, as retainage is typically required to be paid when the work is “subtanitially complete.” Parties often disagree on what that term means. When these disputes arise, our attorneys fight aggressively for our clients’ rights in negotiations, mediation, arbitration and litigation. However, we first attempt to avoid these disputes by drafting clear language in contracts which protect our clients’ rights.
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Published on: August 29, 2014

Payroll Withholding Tax Basics for Both Employers and Employees

by Pauline M.K. Young

Requirements regarding withholding payroll taxes are something that every business owner should be familiar with, particularly businesses which handle their own payroll internally (as opposed to outsourcing to a payroll company). Employers are almost always required to withhold taxes from employees’ salaries, wages, and other compensation, such as commissions or bonuses.

While many people think of paying income taxes as what they do when they file tax returns by mid-April of each year, income taxes are actually considered a “pay as you go” tax. The tax returns at the end of the year then adjust the withholdings calculation depending on various other considerations such as deductions, marital status, and other income.

The employer withholds a certain amount of taxes from each paycheck which the employer is then required to turnover to the government.

There are both federal withholdings and New Jersey state withholdings.
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Published on: August 6, 2014

New Jersey’s Use Tax

by Pauline M.K. Young

New Jersey’s Sales and Use Tax Act is most often cited to refer to sales taxes while the use tax http://www.state.nj.us/treasury/taxation/pdf/pubs/sales/anj7.pdf tends to be less well known. When goods or services are purchased outside of the state for use in New Jersey, and the sales tax was not collected by the out of state retailer, or collected at a rate less than the New Jersey sales tax rate, then the use tax comes into play.

New Jersey recognizes the concept of reciprocity when considering the sales taxes of other states. This means that when goods or services are purchased and received in another state to be brought into and used in New Jersey, and sales tax is paid to that non-New Jersey state, New Jersey credits the purchaser for the taxes paid. However, New Jersey does not allow this credit unless there is a reciprocity agreement between the two states where both states recognize and honors the same reciprocity for each other.

If the tax rate in the state is equal to or greater than New Jersey’s, no use tax is due. (New Jersey’s current sales tax rate is 7 percent.) For example, if the non-New Jersey purchase was for $100 and the sale tax rate paid by the purchaser in that state was 5 percent, the purchase paid taxes in the amount of $5.00. Thus, the New Jersey use tax would be $2.00. If the non-New Jersey purchase taxed at a rate of 8 percent, no additional use tax would be due and owing to New Jersey.

If the out of state purchase is delivered directly to the purchaser in New Jersey, there is no credit for any sales tax paid to the other state. New Jersey’s use tax is therefore due for the full 7 percent of the purchase price, including any delivery charges.
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Published on: June 13, 2014

New Jersey Property Tax Sale Certificates and Foreclosures

by Jennifer C. Meusel

In New Jersey, every municipality is required by law to hold sales of unpaid property taxes at least once each year. The municipalities sell the tax liens to obtain the tax revenue which they should have been paid by the property owner. The municipal tax collector conducts the sale which allows third parties and the municipality itself to bid on the tax sale certificates (this is the document evidencing the taxes due and owing). The successful highest bidder then pays the outstanding taxes to the municipality and become the tax sale certificate holder. Then the holder records the tax sale certificate with the county clerk, who records the tax sale certificate as a lien against the property.

Purchasing the tax sale certificate is merely the first step. The tax sale certificate holder does not own the property, but merely has a lien against the property. The amount of the lien is the amount paid for the tax sale certificate plus interest (which normally accrues at a rate of 18%), costs and fees, including the certificate holder’s attorneys fees. The tax sale certificate holder must foreclose on the tax lien in order to become the owner of the property. The certificate holder has priority over any other liens against the property, including mortgages and other lien holders. The certificate holder must wait a statutorily proscribed period after the date of the sale of the certificate to initiate a foreclosure action. A municipality which purchased the certificate must wait six months; any other purchaser must wait two years.

Non-municipal tax sale certificate holders must provide thirty days written notice of their intention to foreclose before they can begin the foreclosure process on the certificate. This notice must include the amount which the delinquent property owner can pay to redeem the tax sale certificate and have the lien released. The notice must be sent by certified mail return receipt to all owners and to the municipal tax collector.

Then, if the property owner does not redeem the tax sale certificate within that 30 day period, the certificate holder is permitted to file its complaint for foreclosure. The complaint must name everyone who has a recorded interest in the property, which includes all mortgage and lien holders. The complaint must identify the property, the property owner and state the redemption amount. It must be served by certified mail return receipt. The property owner continues to have the right to redeem the tax sale certificate up until date of the final judgment. If the certificate is redeemed after a foreclosure action has been commenced, the property owner should file an Affidavit of Redemption and the foreclosure action will be dismissed by entry of an Order.
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Published on: June 2, 2014

New Jersey Lemon Law – Protection for New Vehicles

by Boris Peyner

Purchasing a new car is a major financial investment. Consumers incur high costs to purchase a vehicle and even higher costs to repair defects. Understanding the economic impact, New Jersey’s Legislature passed the New Jersey Lemon Law Act. The law is one of the strongest, most comprehensive, and effective in the country. It protects consumers who purchase or lease vehicles that are defective.

The New Jersey Lemon Law covers all new vehicles that develop a defect during the first two years of ownership or 24,000 miles, whichever comes first. The law covers new passenger cars, trucks, motorcycles, and certain authorized emergency vehicles purchased, leased, or registered in the State of New Jersey. Commercial vehicles are not covered.

The law requires manufacturers to repair reported defects within a reasonable time. The law also provides for remedies to consumers whose vehicles are not repaired and the defect impairs the use, value, or safety of the new vehicle. The law, however, does not vehicle defects which are the results of an accident, abuse, vandalism, or wear and tear. Also, the law does not cover defects caused by repair or modification to a vehicle by a person other than the manufacturer or car dealer.

Defects should be immediately reported to the dealer. Consumers should keep copies of all receipts for repairs and record mileage as well as the repair work completed. Dealers are permitted a reasonable amount of time to make repairs to correct a defect.
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Published on: May 30, 2014

New Jersey’s Anti Retaliation Laws

by Boris Peyner

New Jersey employees in the private sector and many in the public sector are known as at-will employees. This means that employees may be fired at any time, for any reason, or for no reason. Employees, however, cannot be fired for retaliatory reason. New Jersey has expansive laws that protect employees from their employers’ retaliatory conduct, including termination.

Employers can retaliate against employees in many different forms. Employers can retaliate against employees through harassment. For example, employers may try to reprimand, demote, or pass over for promotions employees who raise certain complaints or file certain claims. Another form of retaliation is firing an employee for engaging in certain activity.

However, not every termination or reprimand allows employees to have an actionable claim against employers. Instead, employees must engage in certain protected activity and the retaliatory conduct must be the motivation for the employees’ protected activity.

New Jersey’s Conscientious Employee Protection Act also known as New Jersey ‘s “Whistleblower” law makes it illegal for employers to retaliate against employees who object to or refuse to participate in an activity which the employees reasonably believe are illegal, criminal or fraudulent, or violates a clear mandate of public policy relating to public health, safety, welfare or the environment. Employers which retaliate against employees who object or refuse to participate in this type of activity can subject themselves to a lawsuit and significant consequences.
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Published on: May 28, 2014

New Jersey Guardianship Proceedings

by Jennifer C. Meusel

When a person can not continue to manage her own affairs due to a physical or mental incapacity, another person needs to have the power to do so. If the incapacitated person had executed a valid power of attorney prior to their incapacity, the individual incapacitated person chose and appointed as their agent has that power. However, once a person is no longer able to take care of themselves, they can no longer execute a valid power of attorney. In that case, an application for guardianship must be made to the Superior Court of New Jersey to have a trusted family member, friend or professional to handle the person’s affairs. Unless the person appointed someone prior to their incapacity through a power of attorney or the court appoints a guardian there will be no one with legal authority to act on behalf of the incapacitated person.

A guardianship proceeding is an involved and difficult process where the court must be satisfied that the person is indeed incapable of managing their own affairs, and then determine the appropriate person to appoint as their guardian to make decision for the mentally incapacitated person (who is called a “ward”). This is commonly needed for older adults who have become incapacitated due to physical or mental illness.

A guardianship must be established when a person has lost capacity and there is no one who can lawfully act for him or her. Guardianships are divided into two types, the guardianship over the person and guardianship over the person’s property. Guardianship of the person authorizes the guardian to make personal and medical decisions for the incapacitated person. Guardianship of the property authorizes the guardian to make financial decisions for the incapacitated person. While these are legally two separate roles which can be filled by separate individuals, most often one individual will be appointed as guardian of both the person and the person’s property. There can also be more than one guardian, where two or more people are appointed as co-guardians and must act together. The law allows any responsible adult to be a guardian, but the law gives priority to the spouse of the incapacitated person, and if the spouse is unwilling or unable, priority is then given to an adult child.

An action for guardianship is commenced in Superior Court of New Jersey in the county where the prospective ward resides. In order to get a guardian appointed the court will review the personal, medical, and financial information regarding the ward. Every guardianship action starts with a complaint filed in Superior Court of New Jersey in the county where the incapacitated individual is domiciled. The complaint must state the petitioner’s name, age, domicile and address, the mentally incapacitated person’s name, age, domicile and address, a list of the names and addresses of immediate family members, her finances, and why the guardianship is needed.
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Published on: May 18, 2014

Death Taxes: Estate and Inheritance Taxes

by Pauline M.K. Young

Both the federal and many state governments in the United States, including New Jersey, assess an estate tax upon transfer of a deceased person’s assets. Thus, while it is often begrudgingly referred to as a “death tax,” it is actually a type of transfer tax which is imposed upon the transfer of the property in the taxable estate of every decedent (the deceased) who was a citizen or resident of the United States.

The “taxable estate” can be calculated by subtracting permitted deductions from the gross estate. The “gross estate” includes the value of all property that the decedent had an interest in at the time of her death. The gross estate may also include any interest in the estate as dower or curtesy (an amount promised by one spouse to another in the event of death), items that the decedent transferred in the three years prior to death which were not sold for value or excluded as gifts, certain property that the decedent transferred but retained a life estate in, the value of property in which the decedent had a reversionary interest in excess of five percent of the property value, annuities, some jointly owned property, powers of appointment, and some life insurance policies, among other things.

Some common deductions from the gross estate, which are used to calculate the total “taxable estate,” may include funeral expenses, estate administration expenses, claims against the estate, some unpaid mortgages, certain charitable contributions, property or bequests left to the surviving spouse, interest in a qualified family-owned business, and state estate or inheritance taxes.
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Published on: May 8, 2014

Understand the Difference between Marketable Title and Title When Purchasing a Foreclosed Property

by Jennifer C. Meusel

When you purchasing a foreclosed property, you often get a property which seems to be worth more than you are paying for it. One of the reasons you are getting a bargain is because most selling banks will only accept your offer if you will agree to accept insurable title. They will not guarantee that you will get marketable title. If you are purchasing a property in foreclosure in New Jersey, it is important to understand the distinction and know what you are getting.

The selling bank will often add an addendum to the contract for your purchase specifically stating that the bank will often provide only “insurable” title at closing, as opposed to the standard contract provisions requiring a seller to provide “marketable” title. The bank will further offer to pay for all or part of the costs to obtain title insurance if the buyer obtains the insurance from the title insurance company designated by the seller. While this can result in significant savings, it is important to understand what you will get (and what you will not get) as part of this bargain.

Prior to issuing a policy of title insurance, a title insurance company will conduct numerous searches on the property to determine if there are any clouds on the property’s title, if there are issues with the deed, the ownership status of the property, any tax liens against the property, the status of property tax payments, and judgments, etc. The question is, will you be satisfied with receiving insurable title, as opposed to marketable title?

“Marketable” title means that the chain of ownership to a particular piece of property is clear and free from defects. It can be sold without additional effort by the seller or potential buyer to “clear” the property’s title. To transfer marketable title, a seller must cure or repair any defects found during the title search, such as, for example, paying off liens and/or having them discharged as of record.
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