If you have a living trust in place, why would a person need a will? The answer straightforward : You need a last will to address what is to be done with any asset that you may have unintentionally left out of your living trust. Some examples of how this could happen: You buy property, (say a house), then die or become incapacitated before you can transfer the property into your trust. You co-own a bank account with someone else with rights of survivorship (say a child). The co-owner predeceases you and you forget to name a new co-owner. Your credit card company returns money to you for a trip that was canceled because of your death and it needs …
An Incapcaitated Mother’s Successor Trustee is Overwhelmed by Duties. So What Can They Do?
Here’s an unfortunate story. Mom is incapacitated. She can no longer serve as trustee of her living trust. As successor trustee, the job has fallen to her daughter who is finding the job too difficult and time-consuming. She doesn’t want to do it anymore. Although her brother is backup trustee, the mother named him reluctantly because he is not a responsible person. There are concerns that he is not up to the responsibility. Can the existing trustee remove the brother from the list and designate someone else to serve, maybe a trusted cousin who is a CPA? Well, this is a tough question. Now that the daughter has taken over as trustee from her incapacitated mother, her authority is limited …
Bringing Legal Action Against a Trustee Because the Trust is Performing Poorly in the Market
Who is Responsible When a Trust Shows Poor Economic Performance? Poor performance from trusts, coupled with today’s financial and accounting scandals, have fueled investor concerns over potential problems with stewardship by banks and other trustees. While the stock market is often a factor in poor performance, fiduciary negligence may also come into play and you may have reason to consider a trust challenge. A financial advisor and other interested persons should direct trust beneficiaries to an attorney who has no prior relationship in the trust and who can objectively review the trust’s performance, assessing whether the financial advisor has properly fulfilled its fiduciary obligations as a trustee of a family’s wealth. Trustee Performance Historically, trustees have been quasi-family members, picked …
A Legal Guardian Can Create a Trust for the Benefit of a Minor Child
Question A parent dies with a large estate and leaves behind a minor child(ren). The decedent was divorced when he/she died. How can the surviving parent, if appointed legal guardian, protect the child’s estate from wasteful decisions and actions. The Law The guardian statute(s) provide procedure for setting up a trust on behalf of a minor child. Codified at N.J.S.A. §3B:12-54.1, a parent or guardian may apply to the Superior Court, Chancery Division, Probate Part to get permission to set up a protective trust for the benefit of a minor child or children when they would otherwise be receiving assets from an intestate estate when they are under 18 years of age. The application to the Surrogate’s Office can be …
Gifts, Wills, and Guardians: A Case Study (Part 3 of a 3-Part Post)
By Fredrick P. Niemann, Esq. a New Jersey Guardianship Attorney So far, in my last two blog entries, I have discussed the fight over Henrietta’s estate plan, who prior to being declared incapacitated in 1997, established an estate plan designed to benefit both of her boys and their families, and was specifically designed to place her one child’s, Howard’s, share in trust to bypass his wife Jacqueline. After being declared incapacitated, the settlement placed on the record included a gifting plan that specifically includes a distribution to Jacqueline to be placed into trust for her, through which she could access a portion of the funds right away. Jacqueline’s stepdaughter, Michele, contested this plan, arguing there was no settlement consented to …
Gifts, Wills, and Guardians: A Case Study (Part 2 of a 3-Part Post)
By Fredrick P. Niemann, Esq. a New Jersey Guardianship Attorney In my last blog, I started talking about the case of In re Cohen, which focused on the issue of a guardian making gifts on behalf of his or her ward that directly contradicted an estate plan created previously by a ward. Our ward in this matter, Henrietta, specifically left one half of her estate in trust for her one son, Howard, and his two children, Douglas and Michelle, because she was afraid of her son’s new wife, Jacqueline, and what would happen if Howard received everything outright and made it all available to Jacqueline. Four years after the estate plan was made, Jacqueline and Howard retain a lawyer to …
Can You Exclude Your Ex-Spouse as the Guardian for Your Children After Separation/Divorce in Your Will/Trust?
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Guardianship and Estate Planning Attorney A client was referred to me by another attorney. She was the victim of domestic abuse and is currently in the process of getting divorced. She wants to prevent her husband from gaining custody of her children should she pass away. Her divorce attorney advised her that the father would have parental rights in the event of her death, regardless of what her Will says and that she would be wise to obtain a court order regarding same as part of her divorce. I was asked for my opinion. There is a reported New Jersey Supreme Court decision Watkins v. Nelson, 163 …
Gifts, Wills, and Guardians: A Case Study (Part 1 of a 3-Part Post)
By Fredrick P. Niemann, Esq. a New Jersey Guardianship Attorney A judgment of incapacity has legal significance in our judicial system. The appointment of a guardian confers such power and responsibility onto this person that our courts, through the Surrogate, require this person to report in on the well-being of his or her ward, along with how the person’s money is being used. While our statutes do give the power to the guardian of a ward’s estate (i.e. his or her property) to manage in the best interests of the ward, there are times where it is prudent for a guardian to file an application with the Chancery Division of the Superior Court to get its blessings to perform certain …
Can a Trustee of a New Jersey Trust Just Quit or Resign?
By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Trust Attorney You may be wondering what the procedure is for relinquishing duties as a trustee and appointing a replacement trustee. In short, the requirements for resigning as trustee are typically highlighted within the terms of the trust itself; however, absent such language, a trustee may successfully resign with either the consent of the beneficiaries or court approval. To appoint a replacement trustee, absent any language specifically detailing the appointment procedure, a motion and court approval are necessary. A trustee may not resign from his or her duties by their own act alone; instead, a trustee seeking to step down must receive either consent from the beneficiaries, or where …
The Marital Deduction: A Valuable Estate Planning Tool
By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Estate Planning Law Attorney The federal estate tax marital deduction is one of the most important estate planning tools available to a married couple. The basic marital deduction rule is that, upon the death of the first spouse, the value of any interest in property passing to the surviving spouse is deducted from the decedent spouse’s gross estate. This means that the amount passing to the surviving spouse escapes taxation in the decedent spouse’s estate. There is no limitation on the value of property that can qualify for the marital deduction. By transferring sufficient assets to the surviving spouse in the proper manner, estate tax liability upon the first …