Estate Planning by Creating a Last Will and/or Living Trust
Creating a Last Will and/or a Revocable Living Trust is very effective when planning for your estate. Each document must be in writing and is legally recognized in virtually all states. A trust or Last Will can be simple or more complicated. Costs for either document will vary depending upon the size and complexity of the estate, but many attorneys will charge a flat fee for each document.
Once the document is prepared, be sure to let family members or those named in the will or trust know where to find it. Confiding with trusted family members on the location of your important family documents is absolutely essential in the event of unexpected death or incapacity.” Anybody who has possession of your will or trust (often a family member or your attorney) is obliged to turn it over to the executor or trustee so it can be filed with the county surrogate upon your death.
A Checklist to Consider With Your Last Will and Testament
Is it Better to Have a Trust Instead of a Will in New Jersey to Avoid Probate?
The use of a Last Will is more common than a Trust. A will is subject to probate but probate in New Jersey is simple and inexpensive. In fact, with most family consultations, I recommend clients sign a Last Will with or without a testamentary trust contained within the will rather than having a Revocable Living Trust done. In Florida, everyone pushes the use of trusts but in New Jersey they may not be the best tool for your estate planning goals.
One common reason for setting up a trust, rather than a will, is to avoid court proceedings, known as probate.
So why do some attorneys and accountants push trusts over a Last Will? Probate proceedings can sometimes be costly and time-consuming, taking as long as a couple years, if there is a will contest by contentious family members.
Administrative fees and commissions can cost between 1% and 5% of the estate. Then there is the State of New Jersey to deal with if an inheritance or death tax return is to be filed. The New Jersey Division of Taxation is a nightmare and audits are frequently demanded.
Another reason some professionals prefer trusts is that it makes it easier to handle your health care and personal decision-making if you become medically incapacitated. You can stipulate in your trust that your assets be used to pay for your care, and the trustee will be able to disburse money from your estate without going to court.
With a trust, your assets are legally transferred to the designated trustee (or trustees) either before or after your death. A brief “pour-over will” usually declares that any assets not owned by the trust at time of death be transferred into the trust upon your death.
You can also set up a “trust within a trust” or a trust within a will, usually for one (1) or multiple beneficiaries. Upon your passing, the executor of your estate carries out the instructions of the will and transfers estate assets to the trust. The trustee plays a similar role, but usually for a much longer time- typically until all assets are distributed to the beneficiaries. A trustee is also usually given discretionary authority over when and if distributions can be made to beneficiaries.
The responsibilities of a trustee are considerable. Including paying or negotiating debts with creditors, notifying and paying beneficiaries, filing income tax returns and managing investments.
Whether you have a will or a trust, any debt you have at the time of your death will need to be settled. If your assets aren’t liquid, creditors could force the sale of your property to get paid.
Want to learn more about a Last Will or Trust and which document is best for you? Call Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or e-mail him at email@example.com today and speak to him personally. He welcomes your call.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Estate Planning Attorney
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