Common Questions And Misunderstandings About New Jersey Wills, Trusts, Powers of Attorney and Probate:
Planning for the inevitable is a difficult task as no one likes to face their own mortality; however, it is important to financially protect those you love after you have died. Your loved ones will have enough to deal with as a result of your passing and the last thing you would want to do would be to further complicate matters and financially saddle your loved ones with bills and other complications. Callahan & Fusco, LLC can help you protect what you worked so hard to earn and create an Estate Plan that addresses your concerns.
While people believe they understand what a Last Will and Testament, Power of Attorney, Living Will and Trust is, most people put off making these important Estate Planning Documents because they don’t understand how these important documents can save you and your loved one’s time, money and a lot of unnecessary complications during very difficult times. The common questions, misconceptions, and misunderstandings are:
A Will is not needed because I have family. It is because you have a family that you should have a Will. You should control what happens to all that you have worked so hard to attain. You should decide who should be the Guardian of your minor children and take care of them physically and financially. A Last Will and Testament gives you control over your property so that you can help the who are important to you. If you do not have a Will, your assets will pass under the New Jersey laws of Intestate Succession after the Court names the person to take care of your Estate and that person posts an insurance bond to secure your assets.
Once I make out my Will, Power of Attorney and Living will, I won’t be able to change them. No. So long as a person is legally competent, a person is able to change their Will, Healthcare Directive, or Power of Attorney by simply making and properly signing new documents.
A Healthcare Directive prevents a doctor from talking to me about my treatment. No. A Healthcare Directive, also called a Living Will or Health Care Proxy, designates someone to make medical decisions on your behalf if you are not able to do so. The Living Will allows you to tell the treating doctors what end-of-life treatment and/or care you want and names the person you trust to consult with your medical team to make these important and difficult choices on your behalf if you are incapacitated.
A Power of Attorney can be used after death or can’t be changed. No on both counts. Upon your passing, the Power of Attorney ends. Your named Power of Attorney can no longer do anything on your behalf after you die. Your death nullifies the Power of Attorney as this is a type of document that can be used to manage an individual’s financial affairs during the individual’s life; upon death, the individual’s Will takes control. The Power of Attorney can be revoked at any time if you are legally competent and feel that your circumstances have changed.
#5: A Will allows someone to avoid probate and keep their assets private. No. In New Jersey, a Will is filed with the Surrogate Court located in the County where the deceased person resided, after ten (10) days from the date of death, a process known as Probate. The probated Will directs the decedent’s representative and the Court how to distribute the decedent’s property. Moreover, once a Will is probated, the Will becomes a public document and can be seen by anyone by searching the Surrogate’s Court records.
A copy of my Will is enforceable. Not easily. The original Will is the document that matters; the original Will must be the document probated with the County Surrogate’s Court. There is never more than one original Will as any newly executed Will automatically revokes previously executed Wills. In the event that an original Will cannot be located then a Court proceeding must be filed to evaluate whether there is enough proof to determine legally the “testamentary intent” of the decedent and what should happen with the decedent’s Estate.
All Trusts are not subject to the probate process. Generally, Trusts are not subject to the probate process in New Jersey; however, if a person has a Testamentary Trust—a trust that is part of a decedent’s Will—it will be probated. Additionally, a Trust may be subject to a different kind of public notice. Trusts that involve real estate require a Memorandum of Trust to be filed with the County Clerk’s Office where the real estate is located; the specific Trust Agreement is usually not a public record. In addition, if you have a handicapped child you should consider establishing a “Special Needs Trust” to provide a benefit to the handicapped child without effecting government benefits. If a party files a litigation which involves the Trust, the Trust may become public record within a Court proceeding outside of the probate process.
If you probate a Will, you are subject to a New Jersey Estate Tax therefore a Trust is the only way to avoid the exorbitant New Jersey Estate Taxes. Currently, the State of New Jersey has an Inheritance Tax for individuals who inherit who are not children, grandchildren, parents, or spouses of decedents. New Jersey does not currently have any Estate Taxes; however, there is a 2022 Federal Estate Tax for Estates that are valued at $12,060,000.00 and above. Accordingly, you will not need to pay any Estate Taxes unless you exceed the Federal Estate Tax threshold.
Those named in a Will are the only individuals that need to be notified of the probated Will. Notifying the individuals named in the decedent’s Will is only part of the requirement. In New Jersey, every heir who would inherit under the intestate succession laws must be notified of the probated Will; however, simply notifying an individual does not mean they are receiving anything pursuant to the Will. Additionally, if you only notify those under New Jersey’s intestate succession laws, the friends, neighbors, and/or charities that may be named in the decedent’s Will would not be notified which would create a Notice issue as a copy of the probated Will must be served on all individuals.
It is important that after working your whole life and providing for your loved ones, you do not leave them in a lurch without having prepared an Estate Plan for the disbursement of your assets or to handle your affairs (either financially or your health needs) in the event you can no longer do so. The Estate Planning Professionals at Callahan & Fusco, LLC will listen to your concerns, explain the legal choices you are facing and will assist you in creating a plan that makes sense to you.