Estate Planning by Creating a Last Will and/or Living Trust
Creating a Last Will and/or a Revocable Living Trust is a must when planning your estate. To be legally recognized in all 50 states, each document must be in writing.
A trust or Last Will can be simple or it can be more complex. Complex does not make it better, it just makes it complicated. Your document(s) can be long or it can be short. A long will or trust with many pages does not necessarily make it better. It may be better but it may not and just be long and expensive. Costs for either document will vary depending upon the complexity of the estate, but many attorneys will charge a flat fee for their services.
Once your document(s) 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?
Is Avoiding Probate Necessary in New Jersey?
My wife, Joann and I met with Fred Niemann to discuss our Estate planning. Fred and his supportive staff, Michele, Lucille and Valarie were always attentive and responsive. All emails and phone calls were immediately addressed. Fred and his staff made our visit extremely comfortable. I would absolutely and highly recommend Hanlon Niemann & Wright for my future legal needs!
– Robert and Joann Klein
The use of a Last Will in NJ is more common than a Trust. Not so in other states like Florida and New York. Advocates of a trust over a Last Will argue that a trust avoids probate. 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 standalone 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 unless you own real estate in Florida or for that matter, any other state outside New Jersey.
One common reason for setting up a trust for real estate outside of New Jersey, 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 of years, if there is a will contest by contentious family members.
Administrative fees and commissions can cost between 1% and 5% of the estate. If an inheritance or death tax return has to be filed, then you have to deal with the state bureaucracy. The New Jersey Division of Taxation is a nightmare and audits are frequently demanded before tax waivers will be issued.
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. This is an excellent point to emphasize and can justify the use of a trust vs. a Last Will, in some situations.
With a trust, your assets are legally transferred to the designated trustee (or trustees) either before or after your death. With the trust comes a “pour-over will”. A brief “pour-over will” usually declares that any assets not owned by the trust at time of death be transferred into the trust following death.
You can also set up a “trust within a trust” or a trust within a will, usually for (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 trustee of the trust found in your Last Will. 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 generally 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 needs 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 firstname.lastname@example.org 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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