Everyone should have a will. There are many reasons to have a will even if the individual does not have substantial assets. The will provides for the distribution of probate assets. The person making the will can make specific bequests to named individuals or charitable institutions. The assets remaining after the specific bequests are distributed as provide in a residuary clause. Non-probate assets include banking and investment accounts whose distribution will be governed by the beneficiary designations on file.
Working with an experienced professional is the best course of action. Schwartz Hunter, PC prepares documents that satisfy the needs of the client at a reasonable cost. We work with a wide range of clients from couples with young children to business owners and senior executives of major corporations. “Do It Yourself” forms may not be tailored to the laws of New Jersey. The instructions to the forms may not request all of the relevant information to create a will that meets the individual’s needs. Almost everyone thinks that “all I need is a simple will” but that is rarely the case. An experienced professional will ask questions about issues that the individual wouldn’t have thought of on their own. We have been involved in many estate litigation matters that resulted from poorly drafted wills. It is far more costly, financially and emotionally, to do no planning or poor planning.
If a person dies without a will, their assets will be distributed as provided in the New Jersey intestacy law – which may be substantial different from what would have been provided in the will. Furthermore, if there is no will, then there is no designated executor and a court proceeding would be required to have an administrator appointed. In addition to the expense of the court proceeding, there could be individuals seeking to be the administrator that the person would not have wanted to be handling the estate.
Trusts can be established to be effective immediately or upon the death of the person establishing the trust. Many trusts were established in the past for tax planning purposes. However, with the recent elimination of the New Jersey Estate Tax and the substantial increase in the federal estate and gift tax exclusion amount (currently over $11,000,000 per person), for most persons this is no longer a concern. Everyone who has a will that is more than five years old should have it reviewed. In the past, many wills established trusts based on formula provisions that no longer work because of the changes in New Jersey and federal law. There are still some traps for the unwary with the New Jersey Inheritance Tax but these can be addressed without the use of trusts.
Other uses for trusts include situations where a beneficiary may not be able to responsibly manage a bequest because of immaturity, addiction or other issues. Trusts may also be useful for when there are children from prior marriages. A trust is usually needed when a beneficiary has special needs and has to continue to be eligible to receive public benefits.
Living trusts can be established in New Jersey. However, unlike in other states, there are no significant benefits to living trusts in New Jersey. A number of clients have come to us with previously established living trusts that have not been properly implemented and have problems that must be rectified.
Contact Schwartz Hunter, PC to arrange a consultation with a lawyer at a reduced rate by calling 973-895-1175 or by contacting us online. For those clients who may have a difficult time coming to our Randolph, New Jersey, office for an appointment, we can make arrangements to meet with you.