Estate Planning in New Jersey
Estate planning is the arrangement of your legal and financial affairs ahead of time in the event you die or are medically incapacitated. Making a plan for your estate can apply both after you pass and during your life, if you are medically incapacitated.
Whether or not you realize it, there are already default rules in place for your estate. In the event you unexpectedly pass and have no last will and testament or other documentation, your estate — which includes everything you owned in life — automatically passes to your spouse, children, or other surviving family members according to the laws of intestate succession in New Jersey. Dying intestate in New Jersey can have many consequences that run contrary to what you wish would happen, not the least of which is that your survivors must now handle all financial matters with no guidance or instructions from you.
To ensure your wishes and intentions are known, in life as well as in death, you can work with an experienced estate planning lawyer in New Jersey. Hiring an attorney allows you to talk through your goals, account for all of the most important factors, and gain confidence that your wishes will be understood and executable according to State of New Jersey law.
The attorneys at Van Dyck Law Group can provide you with their experience, knowledge, and guidance. We are here and ready to help you gain the peace of mind that comes with comprehensive estate planning. None of us can predict the future, but we can plan ahead for scenarios we may face. Increase the chances your wishes will be honored, and reduce the heavy burden that could be placed upon family and friends by starting your estate plan today.
Schedule a confidential case review and initial appointment with no obligation when you call (609) 293-2621 or contact us online.
What Does a New Jersey Estate Plan Include?
A comprehensive estate plan accounts for the following documents and estate planning areas:
Last Will and Testament
Your last will and testament (frequently just called a “will”) contain all of your wishes and intentions for how your estate property will be distributed, among other instructions. Your will can name your personal representative (also referred to as executor) and offer guidance for how to settle financial matters related to the estate. It can also describe how you wish your remains to be handled, among other concerns.
In order to be recognized as a valid will in New Jersey, the document must be in writing, it must clearly indicate the person to which it refers, and it must be witnessed and signed by two individuals over the age of 18. If the signings occur in the presence of a notary, the two witnesses will not have to appear in probate to testify to the validity of the will (a “self-proving” will). To reduce confusion, all copies of a will should be dated, and outdated versions should be destroyed or clearly marked as no longer valid.
Before a will can be executed, it must be processed through probate in most instances. There are some exceptions in New Jersey, however. Some assets will bypass probate, including property with transfer-upon-death designations, certain insurance/retirement benefits, and property placed in trust prior to the testator’s death.
Proper estate planning involves working with an attorney to anticipate what your chosen executor must go through for probate to be completed. You may decide to set aside money for creditor claims and estate administration costs, for example, or you may decide to place as much of your estate in a living (revocable or irrevocable) trust so that these assets can bypass probate.
A person planning their estate in New Jersey can choose to form a trust as part of their plan. Trusts come in many “flavors.” They can be simple or complex, and serve a variety of legal, personal, investment, or tax planning purposes.
At the most basic level, a trust is a legal entity with at least three parties involved: the trust-maker (trustor), the trustee (trust manager), and the trust beneficiary. Oftentimes, all three “parties” can actually refer to one single person or a married couple. In the case of a revocable living trust, for example, a person may create a trust as trustor (the trust-maker) and name themselves the current trustees (trust managers) who manage the trust assets for their own benefit (trust beneficiaries).
Depending on the situation, there may be many advantages to establishing a trust, including avoiding probate court. In most cases, assets owned in a revocable living trust will pass to the trust beneficiaries (or heirs) immediately upon the death of the trust maker(s) with no probate required. Certain trusts also may result in tax advantages both for the trust-maker and the beneficiary, particularly irrevocable trusts. Or, they may be used to protect property from creditors, or they can simply provide for someone else to manage and invest property on behalf of the trust maker(s) and the named beneficiaries. If well-drafted, another advantage of trusts is that they continue to be effective even if the trust-maker dies or becomes incapacitated.
Trusts may also be formed automatically as a result of the execution of the will. These are referred to as “testamentary trusts”. However, the property to be placed in this type of trust will first go through probate, in nearly all instances.
Many goals for passing property along to individuals or having certain financial matters resolved can be accomplished through the creation of a trust. Refer to a New Jersey estate planning lawyer for more information and guidance.
Powers of Attorney
“Power of attorney” refers to a legal document granting a specific agent the ability to legally make certain decisions and take actions on behalf of the maker of the document (principal). The most common powers of attorney granted give the agent (known as the attorney-in-fact) the ability to make medical decisions or financial decisions while the principal is incapacitated. Powers of attorney can be very broad or very limited and specific, depending on the way they are worded.
All powers of attorney terminate upon the death of the maker and some powers of attorney may terminate when the maker (principal) becomes incapacitated (unable to make or communicate decisions).
When the intent is to designate a backup decision-maker in the event of incapacity, then a durable power of attorney should be used. Durable Powers of Attorney should be frequently updated because banks and other financial institutions may hesitate to honor a power of attorney that is more than a year old.
Without powers of attorney documents in place, there is no automatic granting of the power to make decisions on your behalf to a spouse, parent, or adult child in the event you are incapacitated. To obtain the legal authority to make these decisions requires guardianship and/or conservatorship hearings, which can be lengthy and expensive. To reduce the burden on loved ones in the event you are medically incapacitated, be sure to have recent powers of attorney documents in place with specific powers transmitted under specific situations.
Health Care Documents (or Advance Directives)
“Advance directive” is a blanket term for documents stating your specific wishes and the decisions you would like made in the event you are medically incapacitated. For example, the advanced directive would state what kinds of life-saving care you wish to receive under particular circumstances. A typical example is that someone may wish to have a feeding tube and/or breathing apparatus used to prolong their life if there is the hope of medical recovery within a reasonable timeframe, but they do not wish to receive life-sustaining care if they are in a prolonged coma with no hope of recovery.
A “do not resuscitate” order is also commonly drafted with specific instructions on the individual’s wishes, and can include instructions for certain situations.
An advance directive can also provide instructions to care providers and disclosure to family members regarding how your remains are to be handled, whether you would like to donate organs, etc.
You can think of an advance directive as a form of “living will” that activates any time you are medically incapacitated and incapable of communicating your own wishes. These documents can be drafted by anyone over the age of 18, and they are legally binding so long as they contain executable language and comply with all relevant state and federal laws.
Commonly, an advance directive is used to delegate responsibility to certain family members, loved ones, or agents in order to ensure your wishes will be carried out. These directives will need to be accompanied by a medical information access authorization document known as a HIPAA release. Otherwise, the care provider may decline to share critical health information for fear of being in violation of HIPAA laws. Designated agents may also require powers of attorney in order to legally make decisions on your behalf.
Estate Tax Planning in New Jersey
New Jersey technically eliminated the state’s estate tax as of January 1, 2018, but there are still federal taxes and a state inheritance tax to be aware of. Nearly all property and asset transfers can trigger some sort of tax, so comprehensive estate planning in New Jersey requires careful estate tax planning.
Van Dyck Law Group can help you anticipate what tax burdens might be placed upon your estate or your loved ones who receive transferred property. You will be able to plan ahead for these costs using techniques like trust formation or specific testator language that provides liquid assets to cover any applicable taxes.
Estate tax planning in New Jersey is a major part of the process for ensuring that your vision for what happens after you die can come to fruition as you intended.
When Do I Need an Estate Plan in New Jersey?
Anyone over the age of 18 should have an estate plan in place, regardless of their health or the risks (or lack thereof) present in their current lifestyle. Accidents can happen at any time, as can an unexpected acute illness. Without the proper documentation in place, loved ones will be left managing intestate probate or struggling to obtain guardianship/conservatorship powers in order to help care for you. Further, providing specific instructions gives loved one’s confidence in their decisions, and it increases the chances that the vision you had in mind for your legacy will come to fruition.
Estate planning is particularly recommended for individuals over the age of 65 or those who have a medical condition, chronic health diagnosis, or occupation or hobby known to carry a high risk of medical incapacitation or mortality.
While certain individuals may have a higher likelihood of needing an estate plan, the truth is that none of us can predict what could happen tomorrow or even today. Estate plans give us some measure of confidence that our wishes will be known, and they provide guidance loved ones will look towards in the event of a sudden and unexpected tragedy.
How Often Should I Update My Plans With a New Jersey Estate Planning Attorney?
Estate plans should be revisited at least once every 3–5 years. Outdated plans may not reflect the current condition of the estate, and they may also not reflect the current wishes and intentions of the testator. Further, state and federal law changes may have been passed that affect the executability of previous plans.
Individuals should revisit their estate plan after major life events: marriage, divorce, the birth of a child, retirement, purchase of a new home, etc. By accounting for your current situation and the most up-to-date inventory of your estate, you can reduce the risk that your estate plans will be put into question in the event of an unexpected tragedy.
Am I Legally Required to Hire an Attorney to Create My Will and Other Estate Plans in New Jersey?
There is no legal requirement that an attorney assists with your New Jersey estate planning, but technical considerations and the complicated nature of the law can mean that proper estate planning is nearly impossible without some form of input from a legal professional. Your will could be un-executable, for example, or it could contain language that ends up confusing the courts and/or your administrator. You may also overlook key aspects of estate planning, such as the possibility of setting aside funds for all probate costs so that the remainder of your property can be inherited as intended.
Without professional guidance from a New Jersey estate planning lawyer, the language you use can even have the opposite of the intended effect. You also want to anticipate possible grounds for contesting your will by your close relatives.
Further, creating durable powers of attorney documents and advanced directives without assistance from an attorney can easily become overwhelming. You must choose legal language carefully, and you must be able to anticipate specific situations so that your documents can execute as you intend them to. Otherwise, health care providers, the courts, or upset family members can dispute the executability of the documents, forcing loved ones to go to court before they are able to make critical medical decisions on your behalf, for example.
Overall, working with an estate planning lawyer in New Jersey is about giving you confidence and peace of mind. You can put your wishes into specific words and know what situations could arise, allowing you to plan ahead for the most likely scenarios. With this guidance, you can help your loved ones get through a difficult time in their life by making it clear what you wish to happen and how they can best honor those wishes.
Be Prepared, and Be More Confident About the Future When You Speak With New Jersey Estate Planning Attorneys
The attorneys at Van Dyck Law Group have decades of experience assisting individuals with a broad range of backgrounds and financial situations. No matter your age or current health status or what assets you currently hold, there will be questions about what should happen next in the event that you pass. By working with a local estate planning attorney familiar with state and federal laws, you gain control over your future outcomes and provide your loved ones with guidance and support they will most assuredly be grateful for having.
Learn more about what estate planning involves and how to prepare for your idealized future when you call (609) 293-2621 or contact us online to schedule a no-risk, confidential appointment today.