Varian Law LLC

Administering A New Jersey Estate Without A Will Can Be Complicated And Frustrating

If a loved one passes away without a Will, you need to know what steps to take in order to properly administer the Estate.

If a relative dies without a Will, and you are chosen to distribute assets to family members, you will most likely find it is not a simple process, according to the Napa Valley Register in "Mom died with no will. Now what?"

You cannot just start handing property out to other people. This is especially true if the property in question is real estate.  You will need the necessary legal authority in order to transfer those assets.  In order to obtain that authority you will need to go to probate court and ask a judge to appoint you as the personal representative of the Estate.  Once you secure that designation, you will have the legal authority to collect and distribute the decedent’s Estate.  However, you cannot just distribute the assets in anyway you wish.  

Although every estate administration presents its own unique circumstances and challenges, the process of administering an Estate in a modern world is usually much more complex and time consuming than most people realize.  Estate administrations (even those with Wills) present the person administering the Estate with numerous requirements and tasks that must be performed in a timely manner, and most people simply do not have the knowledge, the skill or the time required to properly complete them.  Unfortunately, many people will attempt to administer the estates of their loved ones without professional assistance, and they eventually become frustrated, confused and intimidated when they encounter procedures/issues with which they are not familiar.  As a result, such people either encounter substantial difficulty in completing certain tasks or unknowingly fail to fulfill all of their responsibilities (which will likely lead to some form of litigation or other adverse ramifications).  In most circumstances, the assistance of experienced professionals is absolutely essential to the proper administration of an Estate.

An experienced estate administration attorney can assist you if you find yourself in the difficult position of having to administer an Estate.

Reference: Napa Valley Register (Feb. 1, 2018) "Mom died with no will. Now what?"

Leaving Assets to Minors Is Different than Adults

Protecting assets for your minor heirs can be a challenge.

If you plan on leaving assets to minors, you can leave it to the courts to decide on the best person to handle the funds or you can decide for yourself through a comprehensive estate plan, according to the Times Herald-Record in "Proper legal planning for minor beneficiaries."

The best option may be to create a trust and to fund the trust with the assets that you would like to leave for the minors. You can appoint a trustee of your own choosing to administer the assets for the benefit of the minors. You also can leave instructions about how and when the assets are to be distributed, which does not have to be the moment they reach the age of majority.

Additional challenges may arise when you want to leave non-probate assets, such as life insurance, to your minor children.  If you do not prepare properly, those assets could wind up under the control of a Court supervised custodian account.

An experienced estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, which may include leaving assets to minor children.

Reference: Times Herald-Record (Feb. 1, 2018) "Proper legal planning for minor beneficiaries."

Estate Planning in New Jersey Does Not Have to Be Complicated

Once you take the initial steps, estate planning often becomes an easy process.

You may only need a few essential documents to get your estate plan underway, but many people often delay because of the concern of complications, according to Forbes in "More Than Half of Americans Don't Have These Essential Estate Documents, Do You?"

A validly drafted general durable power of attorney can prevent the significant costs associated with guardianship proceedings if you were to become unable to manage your own affairs in the future.  And an Advance Directive (which includes a "Living Will") that is prepared in accordance with New Jersey law can help carry out your wishes with respect to the termination of medical treatment and, like a power of attorney, can also prevent significant costs in the event that you become unable to make your own medical decisions in the future.

In addition to those two basic documents, you would most likely need a Will and some form of Trust.  Both Wills and Trusts can vary tremendously in their complexity and purpose.

An experienced New Jersey estate planning attorney can advise you on creating an estate plan that meets your unique circumstances, which may include the creation of a Will and Trusts.

Reference: Forbes (Jan. 26, 2018) "More Than Half of Americans Don't Have These Essential Estate Documents, Do You?"

Children Need Information Before Receiving Their Inheritance

Information and education can go a long way in helping your children to use an inheritance wisely.

Mistakes can be made by children who inherit money and lack the information on how to deal with it maturely and wisely, according to Nasdaq in "5 Things Your Kids Should Know Before They Inherit Your Money."

Much of what your children will need to know depends on how they are receiving your wealth. If you are leaving them the money in your IRA by designating them as beneficiaries, they will need to know the best way to handle that IRA, when they have to make withdrawals and what they are not allowed to do without facing severe tax consequences.

If the money is being left to them through a will or a trust, they will need to be informed about how to properly handle different types of investments.

The best thing to do is to sit down with your children and talk to them about what they might receive and how they should handle it.  It is also a very good idea to let them know who to trust for legal and financial advice should they have questions after receiving their inheritances.

An experienced estate planning attorney can advise you and your children on creating an estate plan that fits all of your unique circumstances.

Reference: Nasdaq (Jan. 29, 2018) "5 Things Your Kids Should Know Before They Inherit Your Money."

Planning for Your Horses in New Jersey

Horses may have become part of your family.  However, under the law, horses and other pets are considered tangible personal property.

The law considers your horses and other pets in the same category as your tangible personal property, such as your automobiles and silverware.  However, there are options to guarantee their care, according to Newsmax in "Equestrian Legacy Planning Through Trusts."

In New Jersey, you can set up a trust for the benefit of your horses. You can put assets into the trust and leave directions for how those assets are to be used to take care of your horses.

A trustee can then be appointed to make sure your wishes are carried out when you are no longer around to care for your horses. This will ensure that there is a legally enforceable way for you to make sure that the horses are cared for as you want.

An experienced New Jersey estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, which may include a trust for your horses and other pets.

Reference: Newsmax (Jan. 17, 2018) "Equestrian Legacy Planning Through Trusts."

Should You Put Your Child’s Name on the Deed to Your House?

Putting  your child’s name on the deed of a home may avoid probate, but it is almost always a very bad idea for many other reasons, according to My Prime Time News in "Deeds and Probate Avoidance."

Many people are informed by some unwitting person that putting their child’s name on the deed to their home will avoid probate and protect the home from being taken away if the parent needs to go into a nursing home.  This is one of the most common and, unfortunately, worst pieces of advice that spreads across America like a plague. 

There are many reasons why putting a child's name on the deed to your home is generally a bad idea, but here are some of them:  By putting your child’s name of the deed to your home, the home becomes an asset of the child and any creditors the child has can put a lien on the home.  Doing so also has the potential for significant adverse income tax consequences for the child should the home be sold after you pass away.  And changing the ownership of your home will also most likely be treated as a transfer subject to penalty for Medicaid qualification purposes.

An experienced New Jersey elder law and estate planning attorney can advise you on creating an estate plan that avoids unnecessary risks.

Reference: My Prime Time News (Jan. 29, 2018) "Deeds and Probate Avoidance."

The Number One Reason for Estate Litigation

Stepmothers take one of the top spots in causing wars over estates.  However,  they may not be at fault.

Stepmothers are present in many of the battles launched over estate battles, according to Forbes in "Stepmothers: The Cause Of So Many Estate Fights."

But the real problem is not really stepmothers. When family members do not get along for other reasons, they often find themselves at odds over the estate of a deceased loved one. It just so happens that one of the primary familial relationships gone awry is that of stepmothers and their stepchildren.

What this means is that people who have entered a new marriage with children from a previous relationship need to understand the family dynamic and how it could have an impact on the administration of their estates.

An experienced estate planning attorney can advise you in creating an estate plan that fits your unique circumstances, including a blended family.

Reference: Forbes (Jan. 23, 2018) "Stepmothers: The Cause Of So Many Estate Fights."

An Estate Planning Attorney Can Explain New Federal and New Jersey Tax Laws

Significant changes in the law mean it is a good time to meet with your estate planning attorney.

The tax changes recently signed into law create a need to go to an estate planning attorney to make sure your estate plan is still optimal for you and your family. Forbes offered some suggestions of things to talk to your attorney about in "5 Questions to Ask Your Estate Planner After the New Tax Law," including:

• You need to know if the new law effects your estate plan at all. 
• If you are married, you will want to discuss what the new law means for spousal “portability” and how that could impact you and your spouse.
• Many states tie their state estate tax exemption to the federal exemption and you will want to discuss whether yours is one of them.
• Have the attorney review your plan to make sure it is still optimal for what you want to do.
• Before leaving your attorney's office, ask the attorney when you should come back and review your plan again. Estate plans should always be periodically reviewed with an expert, in case there are other changes that need to be addressed.

Reference: Forbes (January 9, 2018) "5 Questions to Ask Your Estate Planner After the New Tax Law."

Be Prepared for a Possible Disability

It is important to plan in case you are one of the people who will suffer from Alzheimer's disease or some other impairment.

Alzheimer’s disease is something that everyone should consider as a possibility in their future, according to the Times Herald-Record in "Disability planning is vital in case of cognitive impairment."

Unfortunately, experts do not think a cure for this disease is likely in the near future.  They expect that the number of people who suffer from it in American will double by the year 2060.  Fortunately, planning for Alzheimer's disease is not very difficult.

An experienced estate planning attorney or elder law attorney can assist you in getting your legal paperwork in order.  Among other things, you will need a health care power of attorney so someone of your choosing can make your medical decisions for you.  You will also need a general durable power of attorney so someone of your choosing can handle your day to day financial affairs.  And you should also have a living will so that doctors will know what to do and not to do when you are terminally ill with no chance of recovery.

Reference: Times Herald-Record (Jan. 18, 2018) "Disability planning is vital in case of cognitive impairment."

Implementing an Estate Plan Requires Some Preparation

Once you make the decision to create an estate plan, then you need to gather facts.

In order to create an estate plan, you need to know what you need in order to organize your affairs, according to The Daily Courier in "I'm dead. Now What?"

These steps include, among other things:

• Gathering all your important financial information. This includes all of your bank account information, your retirement account statements, Deeds to property that you own, life insurance policies, information about your business interests and other important financial information.  
• Put together a list of your beneficiaries and identify any special needs that they may have.
• Honestly assess your families' dynamics in order to identify any potential future disputes.
• Talk to your family members about any possessions of yours that they treasure and make a list of who wants what possession.
• Make arrangements for your own funeral, so your family will not need to worry about making them while they are grieving.

Once you are armed with all of the above information, contact an experienced estate planning attorney who can help you identify areas of concern and implement a comprehensive estate plan for you.

Reference: The Daily Caller (Jan. 11, 2018) "I'm dead. Now What?"