Creating a Fair Estate Plan for Your Children

Create-a-Fair-Estate-Plan-For-Your-Children

If you’re a parent, it goes without saying — you want what’s best for your kids. When your children are young, it makes sense to divide your estate equally among them. However, as your kids get older and reach their 20s and 30s, you may discover that one child is more financially responsible than another. How does this affect your estate plan? Should one child receive more than the other?

When creating your estate plan and deciding how your property and assets should be divided after you die, consider the following factors:

  • Caregiver — What if one child stuck around to take care of you later in life while your other children moved away? You may want to leave more to him or her since he or she sacrificed part of their life to take care of you.
  • Life situations — One child may be a single lawyer with few expenses while the other may have a large family to support on a modest salary. Should both children receive the same amount?
  • Special needs children — If you have a child who is handicapped or disabled, he or she will likely require special care and attention for the rest of their lives. As a result, he or she may require considerably more assets to survive.
  • Younger children may need more support — Is there a drastic age disparity between your children? You may have older children who are independent adults and a younger child who is just broaching adulthood.

Regardless of how you decide to set up your estate plan, one thing is certain: you must inform your children — you do not want have them surprised by your estate plan. In some cases, siblings are so distraught over the outcome of a Will, they may seek a will contest. The last thing you want as a parent, is to have your children fighting over your will after you die. Sit down with a skilled estate planning attorney, voice your concerns, and heed his or her advice. Then, speak to your children and let them know about your estate plan and what they should expect if you pass away or become incapacitated.

Many aspects of estate planning are complicated and sensitive. By consulting with an experienced lawyer, you can gain a better understanding of the process and ensure your legacy is enjoyed by your children. Contact Alec Borenstein, Esq., at alec@bmcestateplanning.com, or call 908-236-6457 for assistance with estate planning matters in New Jersey and New York.

What is Testamentary Capacity?

Testamentary-Capacity

The creator and signer of a Will is known as a testator. Testamentary capacity, therefore, is the ability of the testator to knowingly sign his or her Will. There are numerous ailments that may result in the incapacity of the testator, preventing him or her from validating an unsigned Will. One of the most common diseases that causes this is Alzheimer’s Disease. Many Americans in their 30s, 40s, and even 50s, believe there is no threat of developing this terrible disease or other forms of dementia — they view early symptoms simply as “senility” and “growing old”.

However, as the Alzheimer’s Association points out, 1 in 3 seniors in America will die with Alzheimer’s Disease or some other form of dementia. In 2015, it was estimated that 5.3 million Americans suffered from Alzheimer’s.

As a result, it is imperative that you update your estate plan on a regular basis. Currently, Alzheimer’s Disease is the only cause of death in the top 10 causes that cannot be cured, prevented or even slowed.

But what if you fail to sign your Will and start to show signs of dementia? Is it too late? Are you unable to sign your Will? It depends on whether you have testamentary capacity. Just as there are different types and stages of cancer, there are different types and stages of dementia. To determine if you have the ability to sign your Will, the following criteria must be met:

  • Extent and value of your property — You know what assets and property you own and their current value.
  • Natural beneficiaries — You know which persons are your natural beneficiaries.
  • Disposition you are making — You understand the function of a will and how it is used to dispose of property.
  • How to form an orderly plan — You have an understanding of how these components come together to create an estate plan to distribute your assets and property.

You must understand that if your family members are unhappy with the outcome of your Will, they may seek a Will Contest on the basis that you were not of sound mind when you signed the document. Should your will be found invalid, a previous Will may be used or your Estate may pass through NJ’s intestacy laws.

The best way to ensure your Will is clearly understood and acknowledged as valid is to consult with an experienced attorney. While hashing out a comprehensive Estate Plan may not be at the top of your to-do list, it can save your heirs headaches and heart ache in the event of your death. For more information on Estate Planning in New Jersey, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com, or call 908-236-6457.

My Kids Are So Different – How Do I Plan My Estate?

power of a will, wills, trusts, estate planning, union and hunterdon counties new jersey

Thank you for reading the July edition of BMC’s End of the Month Newsletter. This month my wife is on a two-week (actually 16 day) trip to South Africa, and Daddy (that’s me) is on duty right now. Her absence has me thinking about estate planning as it relates to children.

When your children are young, it makes sense to divide your estate equally among them. However, as your kids get older and reach their 20s and 30s, you may discover that one child is more financially responsible than another. How does this affect your estate plan?

When creating your estate plan and deciding how your property and assets should be divided after you die, consider the following factors:

  • Caregiver — What if one child stuck around to take care of you later in life while your other children moved away? You may want to leave more to him or her since he or she sacrificed part of their life to take care of you.
  • Life situations — One child may be a single lawyer with few expenses while the other may have a large family to support on a modest salary. Should both children receive the same amount?
  • Younger children may need more support — Is there a drastic age disparity between your children? You may have older children who are independent adults and a younger child who is just broaching adulthood.
  • Trust protection – Ask yourself these questions: Are your children in rocky marriages? Are they in high risk professions? Are your children bad at handling money? Should my children receive their shares outright or would it be better to for them to receive their shares in a trust that will help protect them from themselves/divorce/creditors?

At the end of the day, no matter how you structure your plan, one thing is certain: you must inform your children — you do not want them surprised by your estate plan. In my experience, siblings are so distraught over the outcome of a will, they often seek a will contest when it could have been avoided by a conversation during the testator’s lifetime. The last thing you want as a parent is to have your children fighting over your will after you die.

But the first step is to think about the issues involved, and call us with any questions you might have.

If you have any estate planning questions, please feel free to call us at (908) 236-6457, or email me at alec@bmcestateplanning.com.

Common Questions about New Jersey Estate Administration

Trust-and-Estate-Estate-Planning-Wills

Becoming the Executor or personal representative of an estate is an important, yet often confusing, responsibility. Should a loved one or relative appoint you as Executor of their estate, you should contact an attorney. He/she can immediately alleviate much of the stress and confusion you experience as a result of your new obligation.

To further achieve that end, following are some common questions about NJ estate administration:

  • What is probate? — Probate is the legal process of validating a Will. To begin the probate process, go to the Surrogates Court with the original Will and the certificate of death. If the Will is not self-proven, one of the witnesses at the Will signing must validate the signature on the Will.
  • When do state inheritance taxes have to be paid? — In New Jersey, you must pay state inheritance taxes within eight months of the decedent’s death.
  • How can I retrieve a Will from a safety deposit box? — If you are the Executor of the Will, bring a copy of the Will with you that names you as the Executor. In some cases, a bank will allow the Executor to retrieve a Will with him or her present.
  • Do I have to serve as Executor of a will? — No, there is no law requiring you to serve as Executor of a Will. You may renounce your duty as Executor and the job will pass to the contingent executor if any exists. If there is no contingent executor, an Administrator will be appointed in accordance with the state’s intestacy laws.
  • How long does the probate process take? — The duration of the probate process depends on the complexity of the estate and the clarity and thoroughness of the Will. A vague Will may lead to a Will Contest, delaying the process further. Some large estates can take months or even years to settle.
  • What happens if there is no Will? — If no Will exists, an Administrator will be appointed to the estate and assets and property will be distributed based on New Jersey’s intestacy laws.

The job of an Executor can be daunting. Unless you have a background in law, you should not attempt the probate process alone. In the event you need help understanding estate administration in Hunterdon and Union Counties, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com or call 908-236-6457.

Solemn versus Common Probate

Estate-Administration

It’s a fact of life that people die. As individuals, we have many different personal and spiritual views on the subject. The law, on the other hand, has a rather limited perspective. When someone passes, one of the primary legal issues that arises is the disposition of their worldly possessions. These possessions collectively amount to what we call the deceased person’s “estate” and can include: homes and land, bank accounts, personal effects, vehicles and complex financial interests. The way the estate is distributed is called “administration” of the estate.

If the decedent left a last will and testament (commonly called just a “will”), the first question that arises in New Jersey estate administration is whether it is necessary to probate the will. Probate is a legal process by which a will is validated and titled property (e.g., houses and vehicles) in a persons’ estate are distributed to heirs and creditors. It is generally only necessary if the person’s estate includes titled property (usually real property like a house or vehicles such as cars, trucks or boats).

During the probate process, a court determines how to dispose of (sell) the property if necessary and who should be paid. For example, if the decedent had a mortgage on their home, the bank would have to be paid back before the heirs would receive money from the sale of the home.

In New Jersey, there are two ways that a will can be probated:

  • The first method is called “common,” or “short form,” probate. This is a relatively straightforward process where the administrator of the estate fills out a probate application form and sends it into the Surrogates Court in the county where the deceased has passed away. A date is then set by the Court, and the administrator meets with a Surrogates Court representative to review key documents and witnesses including: the will, witnesses to the will, a death certificate, a list of the items, funds and instruments that make up the estate and names and addresses of the relatives and beneficiaries. The “common” probate process is fairly straightforward and is the way most wills are probated. A New Jersey estate attorney can assist with the process and help you streamline in an effort to avoid some of the common headaches inherent in estate administration.
  • “Solemn” probate is a lot more complicated. It requires the administrator to put many people on notice — including people not named in the Will who may have a claim to the estate. It is more costly and generally requires the assistance of an attorney. Why would anyone go this route? Well, sometimes the administrator is aware of individuals who are expected to challenge the validity of the will. This situation is called a “Will contest.” In these circumstances, one or more people alleges that the will itself is invalid (e.g., a forgery or made when the deceased person was mentally deficient) or that a bequest (or lack thereof) within the will is unlawful or against public policy.

Solemn probate allows a court to settle all contests once and for all, and allows the heirs and beneficiaries of an estate to go about their business without worrying about future claims. It achieves this goal, in part, by setting a time period by which all contesters must come forward or else lose the right to challenge the will.

If you are an administrator of an estate, an heir or beneficiary, or expect to be shortly, it is prudent to contact a qualified New Jersey estate attorney who can advise of your rights and obligations and assist with you determining whether probate is needed and whether you should proceed by common or solemn probate. For experienced legal guidance in Union or Hunterdon counties, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com or call 908-236-6457 today.

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