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New Jersey Estate Planning and Probate Law Blog

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.

Don't make these mistakes with your revocable trust

Many people in New Jersey wishing to avoid probate may have taken the step of executing a revocable trust. Doing so means that the assets in the trust will not go through the lengthy and expensive probate process. Moreover, trusts are not made public, which may also make them attractive to many. However, it is important to avoid these estate planning mistakes that could render one's trust ineffective.

First, after the trust is executed, it is important to actually fund it. Assets in the trust must be titled in the trust's name, or else they will not be included in the trust. One option to consider is a "pour over" will that, when the grantor dies, will transfer any remaining property into the revocable trust. This way, they will be distributed per the grantor's wishes without having to go through probate.

Music legend Aretha Franklin dies without an estate plan

The music legend and "Queen of Soul" Aretha Franklin passed away on August 16 of pancreatic cancer. While this is certainly a blow to music fans in New Jersey and worldwide, it is also blow to her loved ones left behind, in part because Franklin did not have an estate plan at the time of her death.

Because Franklin did not have a will or trust, her estate must be probated. This is a public process. Per state laws of intestate succession, her four sons will receive the proceeds of her estate and will share them equally. This is because if a person has no will or trust and does not have a surviving spouse at the time of his or her death, his or her estate will be shared between his or her children in equal portions.

When can a person's estate bypass administration in New Jersey?

When a loved one dies and was married at the time of his or her death, his or her surviving spouse will be dealing with a lot emotionally. What the surviving spouse may be unprepared for is the time and expense administering the deceased's estate will take. However, if the value of the deceased's estate is small enough and if other elements are met, it may be possible to bypass administration of the estate (probate).

Under New Jersey Statutes ยง3B:10-3, if a person dies intestate (without a will or trust) and the value of his or her real property and personal assets does not exceed $50,000 then the deceased's surviving spouse or domestic partner may receive the assets of the estate without having to go through administration.

Choosing who will fulfill the roles specified in your estate plan

Most people in New Jersey will agree that contemplating their death is anything but pleasant. Nevertheless, by executing an estate plan, you can address the inevitable by dictating who will inherit your assets and what kind of end-of-life care you prefer. However, there are important aspects of estate planning that could have a major impact on how your estate plan will be handled when the time comes.

When executing an estate plan, you must make decisions giving other people the right to act on your behalf, either during your lifetime or upon your death. For example, an agent will need to be selected to make health care decisions on your behalf in an advance medical directive or power of attorney. If you have a trust, you will need to select one or more trustees to administer the trust after you pass on. And, the person responsible for seeing that your will is followed upon your death through probate is known as an executor.

Celebrity death exemplifies benefits of estate planning

Foodies and travelers alike in New Jersey may have been saddened to hear of the death of celebrity television personality, Anthony Bourdain, who rose to fame through his food and travel shows. Sometimes, when we hear of a celebrity death, we also find out that the celebrity lacked a proper estate plan, often leading to disputes and litigation. However, Bourdain did leave an estate plan that highlights what was important to him.

First, Bourdain's estate plan made provisions for his daughter, who will inherit most of his estate, which is worth more than $1 million. In addition, as Bourdain traveled extensively through his work, he earned a significant amount of frequent flyer miles. His estranged wife will inherit these miles, with direction to do with them what she thinks Bourdain would have wanted.

You do not need to handle estate litigation matters alone

Last week this blog discussed will contests and what steps a person in New Jersey must take to contest a will. Will contests are a common type of estate litigation. However, estate litigation can cover a wide variety of issues that people might face when it comes to carrying one out an estate plan after a person's death.

For example, a person's heirs could accuse the executor of the deceased's estate of breaching their fiduciary duty, for example, by stealing estate assets. Another cause of estate litigation is fraudulent real estate transfers. And, not all estate litigation is pursued after a person's death. There could be disputes over who should be the guardian of an incapacitated person or who should be named the executor of a person's estate.

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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