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New Jersey Estate Planning and Probate Law Blog

Is it time to create an estate plan?

Estate planning is an important part of growing older. As you age, you start to collect more assets, develop relationships with others and gain the understanding that you won't always be here. You want to leave assets behind to those you love and to protect yourself and your family in the case that you're hurt and unable to care for yourself.

Estate planning covers those end-of-life concerns and issues you may struggle with if you're suddenly disabled and unable to care for yourself.

You could easily make one of these estate planning mistakes

There are people who spend a lot of time on the estate planning process, as well as those who put it off for as long as they can. Regardless of your current situation, it's critical that you take steps to prevent estate planning mistakes.

One mistake can cost you and/or your loved ones both time and money, so it's critical to take action to protect against trouble. Here are some of the most common mistakes:

  • Neglecting to create an estate plan: The most common mistake is one of the easiest to remedy. If you don't have an estate plan, make it your goal to create one as quickly as possible. That'll solve your problem.
  • Forgetting to update your estate plan: Just the same as neglecting to create an estate plan, this is easy to remedy if you take the time to do so. Remember, just because you've created an estate plan doesn't mean it's good enough to last forever.
  • Choosing the wrong executor and/or guardian: In your estate plan, you'll name an executor. This person is responsible for managing your estate upon your death. Just the same, you'll want to name a guardian for any minor children, as this person will raise them should you and your spouse pass on before they reach the age of 18.

What is the New Jersey estate tax?

An estate plan directs where a person wishes their wealth and assets to go, such as to their loved ones, friends and charities after death (also known as, the decedent). However, there is another place the estate assets may be sent depending on the organization and size of an estate -- taxes. New Jersey imposes an estate tax on estates of a certain size, and that cost can be significant for those who pass on.

The estate tax in our state may be as much as 16 percent of the value of the decedent's estate. Certain items of property may be excluded from consideration though, and may include items of property that pass to the decedent's spouse and those assets that transfer to new owners without every passing through the estate. The estate tax is different than the inheritance tax, which applies to certain beneficiaries of estates in our state.

How may fraud factor into the administration of a will?

Fraud is a legal concept that is often tied to the criminal justice system. When a person commits fraud, they have or have sought to have themselves enriched through deceitful actions or omissions. Claims of fraud often arise in business settings, but New Jersey residents may be interested to know that fraud may also arise in the administration of estates.

It is often when a person is creating their will that they may become the victim of fraud. For example, they may be given wrong information that is intended to deceive them into benefiting one party more in their will than others. If the person creates or rewrites their will to unduly benefit someone who has committed fraud, then the responsible party may be subject to legal action.

Understanding probate for estate planning purposes

Probate is a complicated legal process that can take time and legal knowledge to get through. It can be beneficial to readers of this New Jersey estate planning blog to discuss their probate questions with attorneys who are familiar with their estate planning needs. This post may be read as information only and should not be relied upon as legal advice.

Probate plays an important role in the administration of a decedent's estate. When a person passes away, their property must be properly assigned and given to the individuals or entities that are designated to receive it. While some items of property may be jointly owned or owned by a trust, others may be the exclusive property of the decedent and subject to transfer based on the contents of their will. Probate manages the property that is not directly given to a joint owner or trust recipient.

How does a power of attorney fit into an estate plan?

Estate planning should be based on the individual needs and desires of plan creators. While many of the estate planning tools that are included in individuals' end of life plans focus on how their property will be dealt with after their deaths, some serve the important role of providing guidance on estate matters when the planners are still alive. Although it may not seem like living individuals should need documentation to support their wishes regarding their lives, incapacitation and illness can rob them of their abilities to communicate their plans and wishes. In the event of incapacitation and illness, individuals can put into place powers of attorney to help them.

Powers of attorney can cover financial and healthcare topics. A financial power of attorney can discuss how a person wants their money invested and saved, what accounts exist and what expenses should be paid, and who has the right to direct the use of their funds during their incapacitation. Similarly, a healthcare power of attorney provides instruction on how a person's medical care should be handled if they are not able to make decisions on their own.

What does it mean to be of "sound mind" when planning a will?

Executing a will is an important legal process that can alter the way a person's estate and assets are distributed when they pass away. Because of this, some beneficiaries may be greatly enriched by a loved one's estate plan. Similarly, some who feel as though they should have benefitted from a loved one's will may discover that they were left out.

In New Jersey, there are several important requirements that must be fulfilled in order for wills to be considered valid. First, individuals must be adults to execute wills. Once a person reaches the age of 18 that person may create and sign their own testamentary document for the purposes of distributing their end of life estate.

A review of the federal gift tax

During the holidays, over loved ones' birthdays and for other special occasions, New Jersey residents may relish in offering to their friends and relatives tokens of their love and appreciation. These gifts may range from modest items of personal meaning to lavish assets with financial growth opportunities. Many gifts may be given without thought to the federal gift tax, but as gifts grow in value they may become relevant to this important financial consideration.

The gift tax is applied to gifts of value that exceed a federally established threshold. Over time the gift limit to avoid the gift tax has gone up, and for 2019 gifts to any one person that exceed $15,000 may be taxed. That is to say, a person may give up to $15,000 worth of gifts to someone they love before they will be subject to the gift tax.

Fitting digital assets into an estate plan

Digital assets are emerging as a new source of investment and wealth for individuals all across the United States and even the world. In New Jersey, residents may not be familiar with cryptocurrencies like Bitcoin and other online only resources that individuals may keep in their digital wallets. Cryptocurrencies are not physical tokens or other tangible items that holders may trade; transactions using digital assets like cryptocurrencies occur online and through secure blockchain interfaces.

Unlike traditional money that may be held in a bank and taken out at the owner's discretion, digital assets simply do not exist outside of the digital domain. The value of digital assets fluctuates and, due to the structure of digital transactions, the transfer of ownership of cryptocurrencies can be complex. All of these and many other reasons may complicate the estate planning wishes of individuals who choose to invest in these emerging financial tools.

Laws of intestacy in New Jersey

Intestate succession is a complicated area of estate administration law. It becomes applicable to the estate of a deceased individual when that person passes away without having first executed a valid will. As our readers in New Jersey may know, a will is a legal document that a person may use to identify beneficiaries who will receive items of the decedent's property once they have passed on.

If a decedent does not have a valid will in place when they die, the laws of intestacy may take over to govern intestate succession.

J. Jeffrey Press, P.A.
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