What is a Will?
A Will, or Last Will and Testament, is the document that outlines how you want your individual estate to be distributed when you pass away. A Will only controls your probate property– that which you own individually. A Will cannot control what happens to non-probate property– that you own jointly with someone else or property that already has a beneficiary designation.
Under a Will, you can decide exactly who should receive what, administer your estate, take care of your children or pets, how any taxes should be paid, and even who you would like to exclude from your estate. Contrary to popular belief, no estate is too small for a will to be extremely effective. In fact, the use of a will for a small estate can help keep as much money in the estate as possible.
Without a will, the state laws of intestacy determine who receives your estate and in what portions. In most cases, this does not mean that the state takes your estate. Having a will can save your estate money because you can waive the requirement that your beneficiaries post and renew a bond until it is fully administered. You may also be surprised at the amount of taxes a will can help save for your estate. The costs of administration and the emotional toll the intestacy process might take on your loved ones far outweigh the minimal cost of having a will prepared.
Even a simple will, drawn by a layman, can raise interpretation issues which must be resolved by expensive court proceedings. Having a Toms River estate planning attorney prepare your will can help ensure that there is no doubt about your intentions and help save money for your estate to pass on to your loved ones.
What are the benefits of having a Will?
With a Last Will and Testament, or Will, you can outline exactly who receives what portions of your estate, administers your estate, should not receive part of your estate, and how any taxes should be paid. Without a Will, your estate will be administered in accordance with the New Jersey State law of intestacy.
Although this does not necessarily mean the State will take your estate, if often means that your estate is not distributed how you would have wanted. Opening an administration action when the decedent does not have a will can be extremely expensive and time-consuming, unlike the relatively quick and cheap Will probate process.
Consulting with one of our Toms River estate planning attorneys can help you minimize the tax consequences upon your death.
A Will prepared by one of our Toms river estate planning lawyers can waive the requirement that your executor post and renew a bond, which functions like an insurance policy for your estate, until the estate is fully administered. Eliminating the cost of a bond through a Will can save your estate money.
A Will prepared by one of our Toms River attorneys can also eliminate the need for the witnesses to produce themselves when the will is submitted for probate. This is an important aspect of a Will because the Surrogate will otherwise require that at least one of the witnesses produce himself to testify whether you were under any duress or undue influence when the Will was executed. If neither of the witnesses is available (e.g. they have moved or passed away), the Will may not be accepted to probate, potentially negating your wishes. Our Toms River lawyers can eliminate this requirement through proper drafting.
What happens to my estate if I do not have a Will?
If you pass away without a will, you are said to die “intestate,” and your individual estate will pass in accordance with the State of New Jersey’s intestacy laws. In most cases, this does not mean that New Jersey takes your estate. Instead, it means that New Jersey law mandates who will receive your estate and in what portions.
If you are considering allowing your estate to pass through intestacy, understand that the process can be quite expensive and time consuming. In the case of a large estate, your money may be tied up for quite some time and depleted by fees and costs. With a smaller estate, it is even more important to keep every dollar possible in your estate to pass along to your loved ones. If you think you have decided not to have a will or other estate plan, you should consult with an experienced Toms River estate planning attorney to discuss how the law will apply in your situation and affect your estate and loved ones.
Can a Will save me money?
Yes. A properly drafted Will can save your estate money in many areas. First, a Will can save your estate money because it enables you to appoint an executor and therefore allows your estate to be probated through the Surrogate’s Office, as opposed to a potentially expensive court action to have an administrator appointed by the court.
Second, a properly-drafted Last Will and Testament can help save your estate taxes. Third, a Will can waive the requirement that your executor or administrator post and renew a bond until the estate is fully administered. If a bond does not have to be purchased, your estate will have more money to pass along to your loved ones.
Can I change the beneficiary on my life insurance policy in my Will?
No. A life insurance policy is a non-probate asset which is controlled by contract. Any asset that you own for which you filled out beneficiary paperwork is likely a non-probate asset, controlled by contract. If you wish to change the beneficiaries for a contract-controlled asset like a life insurance policy, you should contact the vendor directly and follow their instructions. If you have questions about whether a particular asset is a non-probate asset or would like to create or update your estate plan, contact a Toms River attorney at Costanzo & Russom Law Group for assistance.
What is the probate process like in New Jersey?
In New Jersey, the probate process is relatively cheap, quick, and simple if the decedent left an original signed and witnessed Will when they passed away. In this case, a few simple documents and a processing fee are the only things necessary to probate the will. If you have questions about how to probate a Will in New Jersey, please contact one of the Toms River attorneys at Costanzo & Russom Law Group. If only a copy of the decedent’s signed and witnessed Last Will and Testament can be found, court proceedings will be necessary to try to have the Will admitted to probate and an executor appointed. This is much more expensive and complicated than simply probating an original Will, and illustrates the importance of keeping an original Will in a safe place. If you need help probating a copy of a Will in New Jersey, please contact one of the Toms River attorneys at Costanzo & Russom Law Group. If the decedent did not have a Will, the estate will have to go through the more expensive and time-consuming process of administration so that an administrator can be appointed and Letters of Administration issued. Letters of Administration are necessary if the decedent’s probate assets are to be sold, transferred, or liquidated. If you need to open administration proceedings in New Jersey, please contact one of the Toms River attorneys at Costanzo & Russom Law Group.
How much does a Will cost?
The cost to have a Toms River attorney prepare a simple Will is minimal compared to the amount of money, time, and stress that the Will can save you and your loved ones. Contact a Toms River attorney at the Costanzo & Russom Law Group if you would like to have a Will prepared or updated to help your loved ones save money, time, and stress after you pass away.
What is the surviving spouse’s or domestic partner’s intestate share?
Below is the State of New Jersey’s intestacy statute which outlines what share of an intestate estate a surviving spouse or domestic partner will receive. In many cases, the below result is not what the decedent would have wanted and could have been avoided with a properly executed Will. If you have questions or would like to create an estate plan to avoid subjecting your estate to the New Jersey intestacy statute, contact one of our Toms River estate planning attorneys.
N.J.S.A. 3B:5-3. Intestate share of decedent’s surviving spouse or domestic partner.
The intestate share of the surviving spouse or domestic partner is:
a. The entire intestate estate if:
(1) No descendant or parent of the decedent survives the decedent; or
(2) All of the decedent’s surviving descendants are also descendants of the surviving spouse or domestic partner and there is no other descendant of the surviving spouse or domestic partner who survives the decedent;
b. The first 25% of the intestate estate, but not less than $50,000.00 nor more than $200,000.00, plus three-fourths of any balance of the intestate estate, if no descendant of the decedent survives the decedent, but a parent of the decedent survives the decedent;
c. The first 25% of the intestate estate, but not less than $50,000.00 nor more than $200,000.00, plus one-half of the balance of the intestate estate:
(1) If all of the decedent’s surviving descendants are also descendants of the surviving spouse or domestic partner and the surviving spouse or domestic partner has one or more surviving descendants who are not descendants of the decedent; or
(2) If one or more of the decedent’s surviving descendants is not a descendant of the surviving spouse or domestic partner.
NOTE: This page is for general information only and is not to be relied upon. New Jersey statutes are amended and updated periodically. You should consult a Toms River attorney if you have questions regarding estate planning issues.
What is the intestate share of heirs other than a surviving spouse or domestic partner?
Below is the State of New Jersey’s intestacy statute which outlines what share of an intestate estate heirs other than a surviving spouse or domestic partner will receive. In many cases, the below result is not what the decedent would have wanted and could have been avoided with a properly executed Will. If you have questions or would like to create an estate plan to avoid subjecting your estate to the New Jersey intestacy statute, contact one of our Toms River estate planning attorneys.
N.J.S.A. 3B:5-4. Intestate shares of heirs other than surviving spouse or domestic partner.
Any part of the intestate estate not passing to the decedent’s surviving spouse or domestic partner under N.J.S.3B:5-3, or the entire intestate estate if there is no surviving spouse or domestic partner, passes in the following order to the individuals designated below who survive the decedent:
a. To the decedent’s descendants by representation;
b. If there are no surviving descendants, to the decedent’s parents equally if both survive, or to the surviving parent, except as provided in section 4 of P.L.2009, c.43 (C.3B:5-14.1);
c. If there are no surviving descendants or parent, to the descendants of the decedent’s parents or either of them by representation;
d. If there is no surviving descendant, parent or descendant of a parent, but the decedent is survived by one or more grandparents, half of the estate passes to the decedent’s paternal grandparents equally if both survive, or to the surviving paternal grandparent, or to the descendants of the decedent’s paternal grandparents or either of them if both are deceased, the descendants taking by representation; and the other half passes to the decedent’s maternal relatives in the same manner; but if there is no surviving grandparent, or descendant of a grandparent on either the paternal or the maternal side, the entire estate passes to the decedent’s relatives on the other side in the same manner as the half;
e. If there is no surviving descendant, parent, descendant of a parent, or grandparent, but the decedent is survived by one or more descendants of grandparents, the descendants take equally if they are all of the same degree of kinship to the decedent, but if of unequal degree those of more remote degree take by representation;
f. If there are no surviving descendants of grandparents, then the decedent’s step-children or their descendants by representation.
What is a Power of Attorney?
A Power of Attorney is a document under which a person can appoint another individual or individuals to act on their behalf in a variety of circumstances. A Power of Attorney, properly executed while a person has the requisite capacity, can help your loved ones avoid the costs and time associated with a guardianship action. If you become incapacitated and do not have a valid Power of Attorney, a Guardianship action will need to be opened so that someone can be appointed by a New Jersey court to manage your affairs. The Guardianship process requires doctor evaluations and reports as well as attorney involvement and usually results in several thousand dollars’ worth of costs.
Are there different types of Powers of Attorney?
Yes, there are several different types of Powers of Attorney. The different types of Powers of Attorney (POAs) can be explained by categorizing them as (1) what powers the agent is granted (e.g. General, Medical, or Financial) and (2) when the Power of Attorney comes into effect (e.g. Non-durable, Durable, or Springing).
- The three most common types of Powers of Attorney which illustrate what powers the agent is granted are (a) General, (b) Medical, and (c) Financial.
- A General Power of Attorney can be prepared so that it gives the agent the general authority to do nearly anything you, the principal, could do if you were physically present. This is an extremely broad power, and you should think very carefully about the person you wish to appoint as your agent.
- A Medical or Financial Power of Attorney, unlike a General Power of Attorney, can be prepared to limit your agent’s power to making certain medical or financial decisions on your behalf.
- The three most common types of Powers of Attorney with regard to when the Power of Attorney comes into effect are (a) Non-Durable, (b)Durable, and (c) Springing.
- If your Power of Attorney does not indicate that it is durable, it may become ineffective in the event you are incapacitated (non-durable). Because most people want the Power of Attorney to be effective in the event they are incapacitated and therefore unable to make their own decisions, a non-durable POA is generally not preferable. Having a Power of Attorney drafted by one of our Toms River attorneys can help you avoid this result and ensure that your Power of Attorney is effective when you need it most.
- If you execute a Durable Power of Attorney, the document can go into effect the day it is signed and will continue to be effective in the event of any future incapacity. This is the more popular type of POA, because most people want the document to be in effect when they are unable to manage their own affairs.
- A Springing Power of Attorney, on the other hand, will only become effective upon incapacitation. Springing POAs often require doctor determinations that the principal has become incapacitated, creating delays and extra costs involved with making the Power of Attorney effective.
What are the benefits of a Power of Attorney?
With a Power of Attorney, you are able to appoint an agent to act on your behalf. For example, if something should happen to you and you are unable to sign checks to pay your bills, sign a consent form at a hospital, or sign a deed to transfer your real property, your agent will be able to act on your behalf. Because of the breadth of power you may grant under a Power of Attorney, it is important that you understand the different types of Powers of Attorney.
Without a Power of Attorney, if you become incapacitated or unable to make decisions for yourself, your loved ones will have to bring a Guardianship action with the court to obtain the power to act on your behalf. A Guardianship action can be very costly, with the necessary involvement of at least two evaluating doctors, attorneys, court costs, and sometimes most importantly, time. If you do not execute a Power of Attorney while you have the requisite capacity and are unable to act for yourself, you will be responsible for these costs which will ultimately reduce the amount of money you are able to pass on to your loved ones.
There is a general misconception that spouses can always sign documents for each other. Surely, if you and your spouse own a joint bank account, you could sign checks on the account to pay your spouse’s bills. Spouses may, however, lack the right to make medical decisions for each other. Spouses also do not have the right to transfer real property out of each other’s name.
For example, if you and your spouse own real estate as husband and wife, each of your signatures will be required to sell or transfer the property. If something happens to one of you and you have not executed Powers of Attorney, the other would not be able to sell the property without bringing either a guardianship or partition action. Not only is this a hassle, but it can lead to the unintended consequence of liens, such as Medicaid liens, being placed on the property if your spouse receives Medicaid assistance. Even if you and your spouse own all of your assets jointly, it is a good idea to execute Powers of Attorney to prevent the potential expense of a Guardianship action or other issues in the future.
Can a Power of Attorney save me money?
Yes. A Power of Attorney can save you significant amounts of money. A Power of Attorney, properly executed while a person has the requisite capacity, can help your loved ones avoid the costs and time associated with a guardianship action. If you become incapacitated and do not have a valid Power of Attorney, a Guardianship action will need to be opened so that someone can be appointed by a New Jersey court to manage your affairs. The Guardianship process requires doctor evaluations and reports as well as attorney involvement and usually results in several thousand dollars’ worth of costs.
Do I really need a Power of Attorney?
While you do not necessarily “need” a Power of Attorney, a Power of Attorney is an incredibly powerful and important part of every estate plan. It is true– you may never become incapacitated or need assistance in managing your affairs. If you become incapacitated or otherwise unable to manage your affairs and you have not executed a Power of Attorney, however, your loved ones will have to bring a Guardianship action with the Courts to obtain the legal authority to manage your affairs and make financial and medical decisions on your behalf. A Guardianship action is very expensive and invasive, both financially and emotionally, and opens your affairs up for the Court’s opinion. You will be evaluated by two doctors, the Court will appoint an attorney to represent your interests, and your family will likely hire an attorney to assist them in bringing the action. The person or persons you would want to manage your affairs may very well not be the ones selected by the Court.
With a properly drafted and executed Power of Attorney, you have the control to decide who will manage your affairs. Unlike a Guardianship action, a Power of Attorney generally grants your chosen agent the authority to act on your behalf without stripping you of your rights. In addition, a Power of Attorney can be enacted almost immediately, whereas a Guardianship requires sometimes lengthy and contentious court proceedings before anyone is granted the authority to act on your behalf– and your affairs may go unmanaged while your loved ones work their way through the process.
Whether or not you will ever require a Power of Attorney during your lifetime is an unknown. If you fail to execute a Power of Attorney, however, and you become incapacitated, you and your loved ones may be subjected to a great deal of financial and emotional stress, all of which could have been avoided with a properly drafted and executed Power of Attorney.
What is a Living Will?
A Living Will, sometimes known as an Advance Health Care Directive, is a document by which you can set forth your instructions for your health care providers in the event that you become unable to participate, by a lack of capacity, in your own health care decision making.
With a Living Will, you may appoint a health care representative to communicate with your health care providers, but they will be obligated by the choices you make in your Living Will.
Oftentimes, a Living Will is used to direct that life-sustaining treatment, including or excluding artificially provided fluids or nutrition, be withheld or withdrawn in a series of circumstances, such as 1) when the life-sustaining treatment is experimental and not proven therapy, or is likely to be ineffective or futile in prolonging life, or is likely to merely prolong an imminent dying process, 2) when you are permanently unconscious, 3) when you are in a terminal condition, or 4) when you have a serious irrevocable illness or condition, and the likely risks and burdens associated with the medical intervention outweigh the likely benefits to you from such intervention. A Living Will may alternatively be used to direct that all medically appropriate treatment be provided to sustain your life, regardless of your medical or physical condition.
You may direct that your health care provider issue a “do not resuscitate” order in the event you suffer one of the above conditions. Finally, you may express your wishes as to whether or not you wish to be an organ donor with a Living Will.
With a properly drafted and executed Living Will, your predetermined wishes become binding directives. There are legal penalties if a health care professional intentionally fails to act in accordance with your directives, and it is a crime for someone to willfully conceal, cancel, deface, obliterate, or withhold personal knowledge of an advance directive or the modification or revocation thereof.