Understandably, many find estate planning difficult, since it requires you to consider what happens when you die. You may think you do not need to plan for your estate until you are older, especially if you do not own much property. So why is estate planning in New Jersey important? With a complete estate plan, you can provide for your loved ones, contribute to important causes, and make your life easier as you age.
As you explore your options, consider reaching out to Weiner Law. Our experienced New Jersey estate planning attorneys have decades of experience helping clients set up estate plans that meet their unique needs.
What Is Estate Planning?
Estate planning is the process of creating legal documents directing what happens to your property when you die. An estate plan typically includes:
- A will,
- One or more trusts, and
- One or more advance directives.
Depending on your situation, your estate plan may also address more topics, like creating a family LLC for your small business.
Wills
Your will passes your property to new owners after you die. To manage the estate, you usually designate an executor.
Wills Formalities
Anyone 18 or older and of sound mind can create a will, and the law refers to the person creating the will as a testator. To meet the strict legal formalities, a will must be:
- In writing,
- Signed by the testator, and
- Signed by two witnesses.
Unlike many states, New Jersey considers writings intended as wills to be valid without witness signatures as long as the material parts are handwritten by the testator.
Probate
When a testator dies, the executor brings the will to probate court. The probate judge determines whether the will is valid. If it is, the executor satisfies the testator’s debts and distributes their assets per the will’s terms.
During probate, interested parties may challenge the will’s validity. Typical challenges include the claims that the testator:
- Lacked testamentary capacity, i.e., was of unsound mind or did not intend the document to be their will;
- Failed to meet the will requirements; or
- Was unduly influenced by another to create the will or put certain terms in the will, e.g., if the testator created the will because someone else coerced, threatened, or manipulated them.
Interested parties can challenge the will, and such parties generally include your legal heirs and any former will beneficiaries. Such challenges make the somewhat tempting “writings intended as wills” exception to the will requirements extra risky. Your loved ones may already have to testify that the handwriting is yours and grapple with any errors or omissions in the document. On top of those requirements, they may have to fend off the legal challenges listed above.
Trusts
Trusts may have a reputation for being the domain of the wealthy and their children, but trusts are an adaptable, multi-use tool. Even if you do not have seemingly endless funds, trusts may prove vital in your estate plan.
Trust Roles
When you create a trust, you become the trust’s grantor (sometimes alternatively called the settlor or trustor). The trust is established on behalf of one or more beneficiaries and administered by a trustee.
Trust Types
Your trust may be revocable or irrevocable. You may create a living trust or a testamentary trust. You create a living trust while you’re alive, and you can fund and alter it throughout your lifetime. A testamentary trust is created in a will and is established after you die.
These options may be combined with varying trust purposes, such as:
- Providing for loved ones,
- Protecting assets for Medicaid purposes, or
- Contributing to charitable causes.
With these possibilities—and more—available, trusts may fit into your plan better than you ever imagined.
Advance Directives
Estate planning also helps you care for yourself as you age. Advance directives allow you to express your wishes, typically through a living will and powers of attorney.
A living will allows you to declare your wishes related to healthcare treatments if you become incapacitated. For example, you may address whether you want to:
- Be placed on a ventilator,
- Be resuscitated if your heart or breathing stop, or
- Receive antibiotics or antivirals.
Many people also designate a durable power of attorney. Your power of attorney may be authorized to act on your behalf with respect to your financial affairs, healthcare, or both.
What Happens If You Do Not Have an Estate Plan?
If you die without a will, your estate passes to your legal heirs through intestate succession. Someone must notify a probate court about your death. The court appoints an administrator, who would serve in the same role as an executor.
That administrator is responsible for the following:
- Inventorying your assets and liabilities,
- Determining who your legal heirs are and notifying them about the probate action,
- Satisfying debts out of your estate funds, and
- Distributing the remaining assets to your legal heirs.
Each step in this process is complicated when you leave behind no will. Why is estate planning important? Because it avoids many complications and injustices that might result from impersonal, one-size-fits-all intestate succession laws.
Inventorying Assets and Liabilities
Even if you meticulously document your assets and debts, the chances are that someone else will struggle to figure out what you own, what you owe, and where to find it. And if you do not have careful records, the process can be downright difficult.
Identifying and Notifying Legal Heirs
New Jersey law identifies your legal heirs if you leave no will. If you leave behind a surviving spouse or domestic partner, the spouse or partner takes some or all of the estate.
If you also have surviving parents or children separate from your spouse, they take a portion of the estate. If you do not leave a spouse or domestic partner, your assets go to your surviving:
- Descendants,
- Parents,
- Siblings and their descendants,
- Grandparents and their descendants, and
- Step-children and their descendants.
Depending on your life circumstances, your administrator may struggle to locate your heirs. Unfortunately, intestate succession could result in your property going to people who you would not have included if you’d created a will, and it could leave some people you love with nothing.
Satisfying Debts
Your administrator is also responsible for notifying creditors of the probate action and paying legitimate creditor claims. Paying debts may be simple if you leave behind primarily liquid assets. However, an administrator often has to sell property before they pay your debts.
Distributing Assets
Depending on who your heirs are, the administrator may have to do complicated math to determine what proportion of your overall estate each heir should receive.
Then, the administrator has to decide which assets go to whom. Again, this may be simple if you mainly leave behind liquid assets. Otherwise, it may be a challenging process.
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How Much Does Estate Planning Cost?
How much does an estate planning lawyer charge? Unfortunately, there is no easy answer to this question. Lawyers typically charge by the hour or a flat rate for a set amount of work. Speak to a few lawyers and ask how their fees work. You will likely find one that fits your budget.
Speak with an Experienced New Jersey Estate Planning Lawyer
We hope you see why estate planning is important. But you might wonder what you should do next. Contact Weiner Law to speak with our experienced estate planning team.
We can help you make a plan, advise you on what options work best for you, and create legally enforceable documents that put your mind at ease.
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