How Hospice and Estate Planning Work Together

What Steps Should a Hospice Patient and Their Family Take Now?

As you can tell from reading this site, estate planning offers you many choices.  Some choices are simple, others not so much.

Let’s discuss briefly on this page an unpleasant topic – illness and imminent death.  You may be emotionally conflicted by this reality… 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 into the disease/illness.

My experience as an attorney who helps families with this type of planning is that the opposite occurs. I find that clients experience great peace of mind once they have done their planning so that they can concentrate on other issues important to them. When (and if) a life-threatening illness strikes a loved one, the spouse and family will rally together. It is at this time the family leader must take charge and be fully informed about what is necessary to be done.

I have personally reviewed the literature commonly given to families who have someone on Hospice. I’ve given and attended workshops and lectures. What I’ve found is that with all this terrific information out there, much of it often leaves out the critical financial and legal information individuals and families need to know.

You Can Act Now to 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 estate will pass to their loved one(s) 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 one(s) upon their death. Depending upon the age of the person(s) and/or the dynamics of the family member(s) who will be receiving the property, it is important how you choose the method of transferring wealth very carefully.

Read the Five Ways You Can Transfer Your Wealth Upon Death

1. Leave property titled solely in your name (i.e., do nothing) – if you do absolutely nothing to plan for the transfer of your estate and if property is titled solely in your name at the time of your death, your property will go through a process known as probate. This means that a court will order your property to be distributed “intestate” among your surviving closest relatives according to the laws of NJ. What this means is that NJ statutes will direct who will receive your property if you have done no planning; the effect is that NJ has written a will for you. The laws say that at your death, if you have taken no steps to plan for your death, a certain amount of your estate 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 estate. It usually takes about nine months or longer before your estate is distributed if it goes through this type of probate. Obviously, most people want to have a greater say in where things go. That’s why they take estate planning measures, such as those described below. To learn more about estate planning go to our dedicated estate planning page by clicking here
2. 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 begins the probate process. With minimal or no supervision from the court, your representative will distribute your property as you have outlined in your Will. A Will is advantageous because you can avoid the courts from becoming involved in the distribution of your estate. You’ll be assured things go to whom you want and that family conflicts will not affect your wishes. Also, if you have one or more minor children, it is critical to have a Last Will and Testament in place so that you can designate a guardian(s) of your children and you can create a trust to protect their inheritance until they are older and more mature to receive your estate. To learn more about a last will and testament go to our dedicated last will and testament page by clicking here
3. 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.
4. 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 pass away avoiding problems with attachment of your assets by a beneficiary’s creditors while you are alive. Like joint tenancy, however, 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 fniemann@hnlawfirm.com.
5. 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 can be 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. To learn more about trusts and their use in N.J. estate planning go to our dedicated trust page by clicking here

Hospice Estate Planning is a Must

Proper planning for a Hospice patient 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 personal and financial 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 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 a matter of months. Proper and thoughtful planning can avoid this and ensure your loved ones are protected and your life’s savings, no matter how large or small, is 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 fniemann@hnlawfirm.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

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