Having and executing an estate plan provides you with meaningful peace of mind that your loved ones will be taken care of and your wishes honored after you are gone.
It may never seem like the right to plan for the end of our own life, but the sooner you get started, the longer you will have to enjoy that peace of mind, knowing that you have taken care of those who matter most to you.
At Weiner Law Group, LLP, our estate planning lawyers can help you prepare your estate to protect your future. We provide individualized services tailored to your unique needs, whether that means setting up several complicated trusts or drafting a brief will.
If you need a New Jersey or New York estate planning lawyer, reach out today.
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Estate Planning 101
Sometimes, those of us who have spent much time working in a particular area often take the words we use for granted. But our clients come to us from all walks of life, and we have found a brief vocabulary primer that can help ensure everyone is on the same page.
What Terms Should I Know?
Your estate includes all the property you own when you die, unless you have removed it from the estate. Specifically, your estate includes real and personal property, financial assets, and any intellectual property you own. That property is divided between “probate” and “non-probate” assets.
Probate and non-probate assets
In New York and New Jersey, probate assets must go through the probate process, while non-probate assets bypass probate. Typically, non-probate assets can reach their beneficiaries sooner. Careful planning can also remove non-probate assets from your taxable estate.
Examples of probate assets include:
- Real estate held in your own name,
- Personal property, and
- Financial accounts held in your own name.
If you only own property in your name, it is likely probate property.
Examples of non-probate assets include:
- Real estate with a right of survivorship,
- Joint bank accounts,
- Life insurance with a named beneficiary,
- Retirement accounts with a named beneficiary, and
- Trusts that you create during your lifetime.
If you own property specifying that it passes to another person automatically when you die, it is probably a non-probate asset and will not be subjected to the probate process on your death.
Wills
Most people know they should create a will. However, they may not be familiar with terms relating to wills, like:
- Dying testate—to die with a valid will;
- Dying intestate—to die without a valid will;
- Intestate succession—the process of distributing assets of someone who died without a will;
- Decedent—the deceased person;
- Testator—the person who created the will;
- Heir—a person entitled to take property through intestate succession; and
- Beneficiary—a person entitled to take property under a will.
Understanding these terms makes a big difference in how confident you can be that you and your estate planning attorneys are on the same page.
Trusts
Unsurprisingly, trusts also involve several confusing terms, for example::
- Grantor—the person who establishes the trust;
- Beneficiary—the person who benefits from the trust; and
- Trustee—the person or entity who administers the trust.
Again, knowing these terms can help you feel confident that you understand your estate plan.
What Does an Estate Planning Attorney Do?
An estate planning attorney can design a uniquely tailored estate plan for you. Our knowledge lets us advise you on protecting your assets, minimizing taxes, and ensuring your wishes are respected after death.
How Much Does an Estate Planning Attorney Cost?
How much it costs to hire a New Jersey or New York estate planning attorney depends on a few factors. The first is whether the attorney uses flat fees, bills by the hour, or uses some combination.
The second is how complicated your estate plan is. Since the cost depends so much on your unique circ*mstances, the easiest way to learn the cost is simple: ask us!
Wills
Your will is your opportunity to explain precisely what you want to happen to your property when you die. Nothing else compares to a will when it comes to planning for the future of your assets.
What Happens If You Die Without a Will?
If you die without a valid will, your probate property passes according to the rules of intestate succession. Your closest living relatives generally inherit under the law.
Priority moves out from a surviving spouse and children to your parents, siblings, grandparents, and to any surviving descendants of your grandparents.
The rules of intestate succession may have unanticipated results in how your assets are distributed and, importantly, do not provide any discretion to you or those closest to you on how they are passed.
That ability to control how your assets are distributed is why most estate plans are different than the rule of intestate succession.
Intestate succession also does not provide the opportunity to minimize or avoid estate tax or to leave money for future distributions. In some cases, the estate will be burdened with the costs of court-appointed administrators.
Finally, the lack of a clear estate plan may create dissent among those closes to you and damage family relationships.
How Do You Create a Valid Will?
To make a valid will, you must typically follow the will formalities established by the law. Those formalities include:
- The will must be in writing;
- The testator must sign the will, preferably in front of both witnesses at the same time; and
- Two witnesses must sign the will, preferably together and in the presence of the testator.
You must also be of sound mind and at least 18 years old.
If you do not follow these strict formalities, you risk your will being challenged in court and sometimes declared invalid. It is also advised to have a notary witness the signature of the witnesses and the testator in an affidavit that attests to everyone’s state of mind.
How and When Can Someone Challenge a Will?
Beneficiaries under the current will, a previous will that could be revived, or heirs may contest a will. Common reasons for contesting a will include:
- Lack of testamentary capacity,
- Undue influence, and
- Improper execution.
If a person lacks testamentary capacity, at the time they created the will, they were not of a sound mind. You must show someone coerced or tricked the testator to prove undue influence. Improper execution means the testator did not follow the law in making the will.
Trusts
As non-probate assets, trusts can be a powerful estate planning tool. They can help reduce your tax burden and benefit your loved ones and causes you care about for years to come.
What Are the Basic Trust Types?
There are two essential decisions to make about every trust.
First, you must decide whether the trust will be revocable or irrevocable. The grantor or someone standing in their position can revoke or change a revocable trust. An irrevocable trust, on the other hand, generally cannot be revoked or changed.
Second, you must decide whether the trust should begin during your lifetime or after death. A trust that starts during your lifetime is a living trust, sometimes called an inter vivos trust. One that begins after you die is a testamentary trust.
What Specific Trust Types Can I Use?
Flexibility is one of the most significant benefits of using trusts in your estate plan. Common trusts allow you to:
- Set aside money until a child turns a certain age;
- Shield assets from creditors to benefit someone who is not good with money or may have signficiant exposure to potential litigation;
- Provide payments to someone on disability without sacrificing their benefits;
- Fund a charitable cause; and
- Avoid probate to pass money directly to beneficiaries.
Our NY and NJ attorneys can advise you on what type of trust makes the most sense for your unique circ*mstances.
What Else Can You Do to Prepare?
We can also help you with items that dictate what should happen if you are incapacitated. Those services include drafting:
- A living will,
- Healthcare power of attorney (health care proxy), and
- Financial power of attorney.
A living will, also known as an advance healthcare directive, allows you to explain specific healthcare decisions you would like to make if you become incapacitated.
Your healthcare power of attorney names someone you trust to make healthcare decisions not covered by your living will for you. And your financial power of attorney names someone you trust to manage your finances on your behalf.
How Can Weiner Law Help?
If you feel overwhelmed with your options, do not fear. We are here to help. We will gladly provide our advice and guide you through designing and executing an estate plan that meets your unique needs.
Contact us today and enjoy finding peace of mind as you begin planning for your future.
