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New Jersey Estate Planning and Probate Law Blog

Can certain assets bypass the probate process entirely?

In New Jersey, when a person dies, his or her estate generally must go through the probate process before the assets can be distributed to the person's heirs either per the terms of the person's will or through the state laws of intestacy should the person die without a will. Many people wish to avoid probate, as it can be a time-consuming and costly process that could potentially reduce the size of a person's estate. However, it is important to note that certain assets are exempt from being probated.

First, assets placed in a revocable trust will not be probated. If a person owns a home or other piece of real estate via tenancy by the entirety or via joint tenancy with a right of survivorship, that real estate will not be probated. This is often the case when a couple is married, owns a home together and then one spouse passes away, while the surviving spouse is still alive.

What steps can you take to simplify the estate planning process?

Many people in New Jersey may have the vague idea that they should have an estate plan but may have no idea where to begin. Estate planning can be complex, but there are some basic steps you can take prior to executing an estate planning that may help the process run more smoothly.

First, determine what your goals are for estate planning. For example, you may wish to pass valuables on to loved ones, plan for incapacitation or both. Next, decide who you want to benefit from your estate plan. This could include family, friends, charities or even your pets. Depending on their age, health and stage in life, some of your loved ones will have different needs than others, and these needs should be identified.

Review your estate plan in light of federal estate tax changes

The Tax Cuts and Jobs Act passed in 2017 will take effect this year, and it means big changes for some New Jersey taxpayers. The jump in the federal estate and gift tax exemption to $11.8 million may be good news to those with a large estate. However, these individuals may want to review their estate plan in light of these tax law changes, so that they can ensure they are utilizing the new laws to their greatest advantage.

First, if a person wants the value of their taxable estate to drop low enough that the federal estate tax will not apply to them, they can consider making charitable donations. Specifically, they should choose charities that have been approved by the Internal Revenue Service. This could reduce the size of one's taxable estate.

Points to consider when choosing a trustee

When a person in New Jersey executes a trust, they will need to select a trustee. The trustee's role is very important, as it is their duty to oversee the management and distribution of trust assets, acting in the best interests of the trust beneficiaries with no self-dealing. People might initially think that they should choose a close relative or friend to fulfill this role, but it is important to understand that there are other options as well.

A trustee must be able to separate his or her personal interests from those of the trust beneficiaries. All beneficiaries must be treated impartially. A trustee must be able to competently oversee the investment of trust assets, but without taking unnecessary risks. Whoever serves as trustee must make sure they have the time needed to give an appropriate amount of attention to their fiduciary duties.

Guiding you through the estate planning process

For some, it is hard to think beyond this year, let alone this month or this week. Planning for the future can be challenging because there are many what-ifs and uncertainty. While no one can be completely prepared for what is to come, there are some measures individuals in New Jersey and elsewhere can take to help protect their assets and wishes in the event of their incapacitation or death.

The estate planning process can initiate for many reasons. One may have just got married, had a child, is about to undergo surgery, was diagnosed with an illness, is reaching retirement age or just simply wants to because they have reached the age of maturity. No matter the reason, at J. Jeffery Press PA, our experienced legal team is here to guide you through the process.

Who has standing to challenge a will in New Jersey?

The loss of a loved one can leave a family in New Jersey grief-stricken. The matter can be made even worse if a person believes the terms of their loved one's will should not be followed, for example, if they believe the will was executed under undue influence or when their loved one was incompetent. However, before a person can pursue estate litigation, he or she must have standing to challenge a will.

Not just anyone can contest a person's will. Only "interested persons" to the will can pursue litigation if they believe the terms of the will should not be followed. In general, only those who would inherit through intestacy laws if there was no will, those who were named as beneficiaries of a previous will executed by the deceased, or those who were named as beneficiaries of a subsequent will executed by the deceased may contest the will.

Those chosen as executors of an estate may seek legal help

Being selected to serve as the executor of a loved one's estate is certainly an honor, but it also comes with responsibilities. Moreover, many people in New Jersey aren't very familiar with the probate process. And, while probate in New Jersey is not as complicated as it is in other states, if mistakes are made they could end up being very costly.

For example, in New Jersey the executor must submit the sill to the surrogate court located in the deceased's county of residence. An inventory of the estate's assets must be compiled. Anything the deceased owed to creditors must be paid. Sometimes, assets need to be sold. Taxes will also need to be paid. Finally, any remaining estate assets must be distributed to the correct persons per the instructions in the deceased's will. Again, while this may seem relatively straightforward, if mistakes are made it could cost a lot both in time and money.

Is estate planning only for the old and wealthy?

When people in Parsippany think of estate planning, they may conjure up the image of a rich old relative dictating his last will and testament on his deathbed. However, even the young or those of modest means can benefit from having an estate plan. There are a number of good reasons why estate planning is valuable to just about anyone.

First, incapacity doesn't just happen in old age. While some people might develop dementia or Alzheimer's disease late in life, a person could suddenly find themselves in a coma after being injured in a car wreck or could find that a grave illness has made it impossible to make decisions on their own behalf. An estate plan can address such situations by including a medical power of attorney and financial power of attorney. The individuals a person selects to fulfill these roles will make medical and financial decisions, respectively, if a person is incapacitated.

Inheritance tax still applies to some New Jersey heirs

New Jersey does not have an estate tax as of January 1, 2018. However, it is one of the remaining states to have an inheritance tax. Also known as a "beneficiary" task, the basis of this tax is on the person who receives an inheritance as well as the amount of the estate that person inherited. An inheritance tax applies to bequests worth at least $500. The tax amounts from 11 percent to 16 percent on inheritances.

However, there are certain heirs who are exempt from the inheritance tax. These include: spouses; civil union partners after February 19, 2017; domestic partners after July 10, 2004; children; grandchildren; great-grandchildren; parents; grandparents; mutually acknowledged children and stepchildren. In addition, certain nonprofit organizations are exempt including: qualified charities; religious institutions; educational and medical institutions; nonprofit benevolent or scientific institution; and the State of New Jersey or any of its subdivisions.

What are the benefits of executing a companion animal trust?

While many people in New Jersey anticipate that, however much loved, they will outlive their pets, the fact of the matter is that sometimes our pets outlive us. Pets are often beloved members of the family, so it only makes sense to make plans as to who will care for your pet if you die before your pet does.

One option pet owners might consider is a companion animal trust or "pet trust." In a companion animal trust, a person can designate who will care for their pet if they die before the pet does. It can also contain instructions on how the pet should be cared for, as well as set aside money designated for the care of the pet. A trustee will be named to ensure that the funds allocated to the care of the pet are handled appropriately.

J. Jeffrey Press, P.A.
8 Wood Hollow Road
Plaza Level - Suite 2A
Parsippany, NJ 07054

Phone: 973-323-2654
Fax: 973-288-2070
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