Hospice, Estate Planning and Probate Action to Take Now:
What Steps Should a Hospice Patient and Their Family Take Now?
As you can tell from reading this site, planning when you have a life-threatening illness is complicated. You may be torn by the emotional component…thinking that if you put your wishes down in the form of a Last Will and Testament or a Living Trust, you are somehow surrendering your fight and giving in to the disease.
My experience as an attorney who helps families with this type of planning is that the opposite occurs. I find that my clients experience a great peace of mind once they have done their planning so that they can concentrate on the other issues they are facing. When a life-threatening illness strikes, it’s the responsibility of the spouse or family leader to become fully informed – to get smart – about these things. I have personally reviewed the literature commonly given to families who have someone on Hospice, and I’ve given and attended public workshops and lectures. And I’ve found that these information sources leave out most of the critical financial and legal information you need to know.
That’s why I wrote The Consumer’s Guide to Hospice Planning.
It’s FREE to you.
And that’s why I’ve been on a legal crusade of sorts, to make sure that families who
have a loved one facing a terminal illness become smart about these things.
Can You Legally Avoid Probate Under the Hospice Laws of NJ?
One of the primary concerns that someone on Hospice faces is how to be sure that their property will pass to their loved ones upon their death. These individuals often want to avoid probate for reasons they believe are important to them. There are basically five ways an individual can transfer property to their loved ones upon their death. Depending upon the age of the persons who will be receiving property or the dynamics among family members who are receiving the property, it is important to choose your method of transfer very carefully.
Leave property titled solely in your name (i.e. do nothing to plan for your property at your death) – if you do absolutely nothing to plan for the transfer of your assets, and if the property is titled only in your name at the time of your death, then your property will go through a process known as probate. This means that a court will order your property to be divided “intestate” among your surviving relatives according to the probate laws of NJ. Basically, the courts in NJ, via state statutes, direct who will receive your property if you have done no planning. NJ has written a will for you. It typically says that, at your death, if you have taken no steps, then a certain amount will pass to your spouse, if you have one, and a certain amount to your children. If there are no spouse or children, then more distant relatives will receive your assets. It usually takes about nine months or longer before all your assets are distributed if they must go through this type of probate process. Obviously, most people want to have a greater say in where things go. That’s why they take other estate planning measures, such as those described below.
Establish a Last Will and Testament – Establishing a Last Will and Testament allows you to provide written instructions on how your property is to be divided upon your death. In your Will, you designate an “executor” or “personal representative” of your estate who opens the probate estate. With the supervision of the court, your representative will then distribute your property as you have outlined in your Will. A Will can sometimes be advantageous since a court will become involved in the distribution of your assets. That way you’ll be assured things go where you want them to, and that family dynamics will not affect your wishes. Also, if you have one or more minor children, then it is critical to have a Last Will and Testament in place so that you can designate who you would like to be the guardian of your children, and any trust you would like to establish until they are older and more mature to receive your estate.
Add a joint owner with rights of survivorship to your property – Adding a joint owner with a right of survivorship to your property (a joint tenant) will pass 100% of that property to the joint owner upon your death. There is no probate necessary. This is often the way spouses choose to title their property. Joint tenancy can, however, be a problem. For instance, if a child is added to an account, and that child is later sued (e.g. divorce, car accident, etc.), 100% of that account may be subject to the lawsuit, and the parent may be left with no recourse. Joint tenancy “overrides” any Last Will and Testament you may have executed. If a spouse remarries, then the second spouse can inherit your entire estate and potentially disinherit your children.
Add beneficiary designations to your property – Adding a beneficiary designation (pay-on-death [POD] or transfer-on-death [TOD]) to your real or personal property is another way to avoid probate. Again, 100% of your property passes to the person(s) you have designated as the beneficiary. Unlike a joint owner, however, the beneficiary has no access to your property until you have passed away, thus avoiding any problems with attachment of your assets by the beneficiary’s creditors. Like joint tenancy, however, the beneficiary designations “override” any Last Will and Testament you have executed and the same risks to your children and loved ones are present. If you would like to speak to a NJ estate planning attorney about your particular matter, contact Fredrick P. Niemann at (855) 376-5291 or by email at firstname.lastname@example.org.
Establish a revocable living trust – A revocable living trust is an estate planning document which allows an individual to direct another person (the trustee) to distribute property upon their death, according to their specific wishes. Unlike a Will, however, a revocable living trust is not probated. In addition to avoiding the time and expense of a court proceeding, the benefits of a revocable living trust are numerous: they insure your financial affairs remain private (as court records are open to the public); they allow an individual to retain control over their property; trusts can incorporate planning for you if you become incapacitated; and sometimes trusts can result in estate tax savings.
Proper planning for a Hospice patient regarding legal issues is a must. For instance, if the patient has young children, especially children with special needs, then it is crucial for him or her to have a Will (and where appropriate, a trust) in place. That’s because minor children cannot take title to property in their own names. What’s more, it will be important to arrange for the care of the children after the death of the parent. And it’s critical to be sure that, where possible, the person who will be caring for the children will have access to the funds to properly care for the children. In addition, some people are not emotionally equipped to handle sums of money they receive outright, and it’s common to see individuals who have received an inheritance to quickly spend that inheritance in the matter of a few short weeks or months. But proper thoughtful planning can avoid this and ensure that everyone is protected and your life’s savings, no matter how large or small, are not squandered. With special needs children (younger and adult), priority must be given to protecting the child’s governmental benefits and preventing the State of NJ from forcing a spend down of inheritance funds to achieve eligibility.
If you would like to speak to a NJ hospice attorney about estate planning and avoiding probate in New Jersey, contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com to schedule a consultation about your particular needs. He welcomes your calls and inquiries and you’ll find him very approachable and easy to talk to.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Hospice Care Attorney
NJ Estate Planning, Hospice NJ | Wills | Trusts Hospice NJ Hospice and Probate – New Jersey Hospice Attorney