I’ve Got the Power, of Attorney!

Okay, okay, you got me. I apologize for my 80s T.V. reference, but I thought it was rather fitting, as sometimes attorneys can (and do) seem like superheroes. That said, the term Power of Attorney doesn’t necessarily mean that the person you have chosen to trust with your affairs is going to dress up in spandex and spend their nights fighting crime in your name. Although you do have to admit it’d be pretty awesome if they did!

What is a Power of Attorney?

Power of attorney isn’t actually referring to a person at all! Rather, it is a written document that says you have given permission to another adult to tell other people what to do with all of your things since you are unable to do it yourself. This includes things like real property (i.e. land) or even bank accounts, as well as handling all the rest of your financial or legal matters.

It also doesn’t necessarily mean you have to be dead. Generally, it is used when someone is incapacitated by some physical or mental reason and can’t speak for themselves, or do all the things that need to be done. So, in review, the power of attorney allows your spouse, a friend, or a family member (also known as an agent), to act on behalf of you (also known as the principal).

Types of Power of Attorneys

So, okay, power of attorney! That’s fantastic! But you might be confused. You might be asking yourself, “Hey, is there more than one kind of power?” And the answer to that question is indeed a resounding YES! There are in fact two types of power of attorney, and we’ll look at them now.

Limited Power of Attorney

Limited: With limited power of attorney, that means that a person has the authority to do one thing and one thing only (like selling your house, for example). If you can’t do it yourself, you’d definitely want to have someone you can trust help you. If that’s the case, then the “Limited” option is probably the best choice for you.

General Power of Attorney

General: According to Justin Scott, a New Jersey attorney, “The general power of attorney allows the representative assigned by the principal the ability and authority to act in any way necessary on anything and everything, should the principal become mentally incompetent or otherwise disabled.” It’s important to note that these general powers of attorney usually have a provision that will allow the representative (or agent) to act even in the event that the principal becomes disabled. However, it automatically ends when the principal person dies.

So now you know a little bit more about power of attorney—who it is and what it does. Hopefully now, if you weren’t before, you will be able to feel at least a little more confident when it comes to matters like these. I know I am, and I hope that you are too!

Trusts, and the Probate Process

It is likely that you’ve heard of a trust. In case you’re unsure what it is, though, a trust is simply this: A trust is an arrangement where things like property, money, etc. are held in safekeeping. What kind of trust should you set up if you’re thinking about it? In this article, we’ll answer that question! Let’s take a look.

Why Do I Need A Trust?

Trusts created under a will can be set up for just about anyone: minor children, adults, or any other person whom you have designated as a beneficiary. It can also be done for a multitude of reasons like tax savings, giving the beneficiary the ability to handle finances or if you have a particular way you would like to distribute all of your assets.

Why Do I Need A Trust?

A trust that is created under a paragraph in your will serves to appoint a trustee. The appointed person then both administers and invests the funds for the trust, and they also pay income and/or principal from the trust following the terms and guidelines that are named in the will.

Attorney Justin Scott sheds more light on the matter. “It can be nerve-wracking to try and think of if you’ve covered all your bases when planning for the future. It’s no question that something will inevitably get left out or you’ll forget this or that. And while you can most certainly create a will on your own, it can still be a bit confusing. If you’d like assistance with drawing up a will or living trust, or if you have questions about anything else, my team and I would be happy to assist you, and get you the help you need.”

Contact Scott Counsel to Learn More About Wills and Trusts

So as you can see, there are a couple of very good reasons to have a will and trust. Of course, this may not be everything involved in the process; it wasn’t meant to be. Rather it is a basic overview of the steps, in order that you may have a general idea of what to expect if you’re thinking of setting up a will and trust for your loved ones. As Mr. Scott said, it can be difficult to know whether you’ve covered all your bases. And while it’s true that you may not get them all, at least by having both, you can rest easy knowing you’ve covered most of them. And most of them are better than none.

What Happens Without a Will?

I’ll let you in on a little secret… I have a lot of stuff. I bet you probably do too, right? It can be kind of scary trying to figure out what will happen to it after you’re gone. You might be even more scared if you don’t yet have a will or just simply don’t want to make one. In either case, I have some information that you just might find helpful, and then I can feel good about myself again. So here we go!

What To Do if There is No Will?

In the great state of New Jersey, if you have no idea what to do and you have no will, the law will come to bat for you and decide how to divide up all those things you left behind. For now, though, let’s just look at the stuff that’s left in your name alone. There are seven ways this can go, and they are as follows:

  • If you die and leave behind your spouse and a child (from that same marriage), your spouse gets EVERYTHING. (This does not include stepchildren or children from a previous marriage).
  • If you die and leave behind a spouse and child from a previous marriage, that spouse gets 25% of your estate, but no less than $50,000 or more than $200,000, plus one-half of any balance on the estate. Your kids get that balance equally, while grandchildren take the share of the deceased parent.
  • Say you die and leave behind a spouse, child(ren), and a stepchild or children, the spouse gets the first 25%. No less than $50,000 or more than $200,000, plus three-fourths of any estate balance. Again, children divide it equally and grandchildren take the share of the deceased parent.
  • If you die and have a spouse but no children, but you have your parents, the deal is the same as before, only this time your parents split the balance of the estate equally between themselves.
  • If you die and you have a child or children but no spouse, your kids inherit equally, while grandchildren will inherit the share of the deceased parent.
  • If you die and you don’t have any of those, but you have parents, your parents get it all. If you don’t have parents, your siblings will inherit equally. For nieces and nephews, it is the same as above: they inherit what their parents left behind.
  • Finally, when no immediate family is in the picture, your property can go to all those to whom you are distantly related to (like grandparents, aunts, uncles, cousins, etc.). Or, it can even be taken by the State if all else fails.

Contact Scott Counsel Today

So here’s a quick glimpse for you at what happens to your things after you’re gone. New Jersey estate planning attorney Justin Scott is quick to assure us. “We know you have a lot of memories and all those things mean a lot to you,” he says, “so please rest assured that we will do everything we can to make sure those precious memories are very well taken care of. Contact New Jersey Estate Planning attorney, Justin Scott, to get started on your will.

The Importance of Having a Will

Okay, so, everyone probably already knows what a will is. If you’ve been around long enough, it’s likely you’ve at least heard of one. For those who may not be familiar, let’s talk a little about what a will is and why it’s handy to have one.

What is a Will?

The most basic of basic definitions is this: A will is a piece of paper (or multiple pieces) that tells everybody who gets what when you kick the bucket. If done right, it should name an executor/rix, and also an alternate, just in case the first person doesn’t want to step up. It should name a trustee if a trust is available, and also a Guardian to take care of any minor children.

It should also state that anyone named in it should not be required to post a bond for their position, as well as specific inheritances and determine how the rest of the stuff (including the estate) should be divided up.

How Can I Have a Will?

Now, I know what you’re thinking: Can I have a will? And the good news is yes, you can! Just as long as you’re over the age of eighteen. You just need two people who are at least eighteen too to sign it with you as witnesses. If it’s done right, you shouldn’t have any issues with proving it, as it will become self-proving with the signatures by the same witnesses as well as that of a notary public.

Why Do I Need a Will?

That’s great and all, right? But why do you even need one in the first place? I’m glad you asked! As stated earlier, a will helps people know who gets what from all your piles of stuff. If you don’t have a will, there could be arguments and all sorts of unpleasant things can happen, so it’s better to have one than not. But, it’s even better to have one that is done properly.

After the will is executed, any changes should be made through either a codicil or an entirely new will. Any markings, cross-outs or handwritten changes can leave the Surrogate unable to act and force probate in the Superior Court.

Finally, the personal representative named in the will also have a list of responsibilities. These include:

  • Locating and performing an inventory of all the estate’s assets
  • Paying outstanding debts
  • Filing appropriate inheritance or income tax returns
  • Having necessary paperwork ready for the transferring of property
  • Paying any and all fees
  • Opening and maintaining an estate checking account
  • And finally, disbursing estate funds to beneficiaries and filing refunding bonds and releases, which are documents that show someone received his or her inheritance

According to Justin Scott, a New Jersey estate planning attorney, “death and all that comes with it is a confusing enough time for anyone.” When mourning a loved one, the last thing anyone needs is to be confused by things they don’t necessarily understand or, quite frankly, care about. This is where we step in. We can assist you in figuring things out and, hopefully, alleviate some of your burden.”

Contact our New Jersey Estate Planning Lawyer to Learn More

If you have any questions or concerns about drafting or executing a will in New Jersey, please call Scott Counsel or fill out our contact form. Our New Jersey Wills & Trusts lawyers are here to help guide you along the process to give your family the peace of mind they need.

How To Settle An Estate (Part 2)

In “How to Settle an Estate (part 1), we took a closer look at six of the necessary steps in the process of settling an estate. If you’d like to check it out again, or in case you missed it the first time, you can find part 1 (here). When you’re ready, come back here and check out part 2 below, where we’ll cover the last six steps in the process.

If you’re ready, let’s continue!

Communicate With Beneficiaries

If the estate goes through probate, you’re going to have to send some very specific notices to some very specific people—beneficiaries. The court, or your lawyer, can help you in this regard. And regardless of whether or not any court proceedings take place, it’s not a bad idea to be in consistent communication with any and all beneficiaries.

It’s important that they be kept apprised of goings-on, as they can tend to grow suspicious and unhappy if they don’t hear anything for long periods of time. Even if nothing is really happening, let them know that you’re still working, things are still moving forward, and they’re still going to get their inheritance. If you aren’t open or honest with them, they can go to court and try to have you kicked out!

Take Care of Any Assets

This is one of the most important jobs of the executor. You want to make sure that the estate is well-maintained, small valuables are looked after and secure, and bigger items remain insured. Remember that your only goal here is to not lose money; it isn’t to reap any huge benefits.

Collect any Money Owed to The Estate

This step will probably take a lot of time and a lot of paperwork, but it’s generally pretty easy. You can also place any money you collect into the estate’s bank account.

Pay Any Bills Owed

As long as there’s money in the estate to pay them, it’s your responsibility to make sure that any and all legitimate bills get paid on time. Rest assured that you don’t have to pay anything out of your own money. If you don’t think there’s going to be enough, get some help from the court or an attorney on what should take priority!

Deal With any Taxes

If the person who has died has a tax preparer, they can be a tremendous asset here, as you’ll need to file taxes not only for the deceased but also possibly the estate as well (but only if the estate was over $5 million). Smaller estates may owe a separate tax, but that all depends on where the person lived or owned property.

Distribute Assets

When all debts and taxes are paid and probate is finally closed, your final job is to distribute the assets among beneficiaries. Then you can breathe a sigh of relief because your job is finally done!

So ends our closer look at how to settle an estate! Should you need any assistance, contact Scott Counsel today and speak with our Estate Planning Attorneys.

How To Settle An Estate (Part 1)

In this article, our New Jersey estate planning attorney will explain how to settle an estate. Please note, however, that this article will only cover the first six items. So, without further ado, let’s jump in and get started!

Find the Will

A will is an important thing to have, but you cannot do your job as executor until you find it. Sometimes that’s an easy task, and for others, it’s not. It’s a very important document, and chances are good that the person will have kept it somewhere safe. Look everywhere you can to find it.

File The Will in Probate Court

So, you found the will, now what? You’ll want to file it with the local probate court, but make sure to give them the original while still retaining a copy for yourself. Even if you don’t think you’ll need to deal with probate hearings, you must still file the will with the court.

Notify Agencies and Businesses of the Death

This includes:

  • The post office
  • Utility companies
  • Credit card companies
  • Banks, and
  • Other businesses the deceased may have had an account with.

You’ll also want to notify any agency through which the deceased was receiving any benefits (like the Social Security Administration). The faster you do, the faster any payments can be stopped and you don’t have to worry about giving money back that the estate isn’t entitled to. And less hassle is always good.

Inventory Assets and Get Appraisals

If you’re going to go through probate, you’ll need a comprehensive list of all the stuff the deceased person owned. Also, it can help you to better keep track of valuables and decide how you’re going to transfer the different items, divide property among beneficiaries who get equal shares, and determine whether or not the estate will owe any state or federal estate taxes.

Determine Whether or Not You Need Probate

In order to do this, you’ll need to figure out the value of all the property that is subject to the probate process, determine how title is held, and learn the rules on what estates can qualify for simpler procedures. It would also be wise to hire an attorney to help with any probate paperwork or help to solve any problems between beneficiaries and creditors.

Coordinate with a successor trustee

If the deceased has left both a will and a living trust, and lots of people do, you’ll need a partner who can be in charge of any trust assets (i.e. the successor trustee). As we saw in another article, a will and trust are similar in a lot of ways, but the major difference is that trust property isn’t required to go through the probate process like things that are named in the will. It can go directly to the people who inherit it! To learn more about how to settle an estate, click here to read part 2.

How To Avoid Probate: Part 3

Welcome once again to our handy-dandy how-to guide for avoiding probate altogether. Please note that this is indeed the final part of the guide. If, however, you missed out on the first two sections, you can check out part 1 (here) or read part 2 (here). In the final section, we’ll discuss how you can go about getting around the probate process if you happen to have a small estate. If this applies to you, please read on!

Is The Estate Big Enough for Probate?

The truth is simple: if your estate is small enough, you might not even have to think about probate at all. Nearly every state now offers shortcuts, or in some cases, ways around probate altogether, for small estates.

Each state defines that term differently, so be sure and check the rules and regulations for your state. Also of note, because of the way these laws are written, some larger estates—most worth hundreds of thousands—are also eligible for special procedures that speed property to inheritors.

There are two basic shortcuts for small estates that we will discuss today.

Claiming Property with Affidavits

If the total amount of value for all of your stuff is below a certain number, anyone who inherits your personal property (that is, anything except for real estate) might be able to skip probate altogether. Please note, though, that the exact amount varies by state and can also vary quite a lot.

However, if an estate qualifies, any inheritor can make up a short document stating he or she is entitled by will or state law to a certain item of property. This paper (called an affidavit) is signed under oath. Then, when the institution or person holding the property (like a bank where the deceased had an account) receives the required documents (i.e. the affidavit and a signed copy of the death certificate), it can then release any monies or other property.

Simplified Court Procedures

The second option we’ll look at now is simplified court procedures. Again, these are defined by individual state laws and are a quicker, simpler version of the probate process. The probate court will still be involved, but it has far less control over settling an estate. In many states, these processes are even simple enough to handle without even getting counsel involved. As such, they save a lot of money as well as a lot of time.

Get help from an Experienced New Jersey Probate Attorney

Finally, let’s end with a quote from New Jersey probate attorney Justin Scott. He says, “We know that, while a lot of people do go through the probate process, there are also those who may not have the time or money to devote to such a lengthy—and in some cases costly—process. We want those people to understand that it’s okay if they choose to go another route. There are many different options open to them, and we can work together with them to decide on what is ultimately their best course of action.”

This concludes our How-to guide on avoiding probate.

Help! I’m An Executor and I Don’t Know What to Do!

Maybe you were always the one everyone expected to have a plan growing up. Maybe you were more a follower than a leader. Maybe the one you always knew you could count on to have a plan is gone. No matter what, death can hit us like a ton of bricks, whether we thought we were prepared or not. And if you’re here reading this article, you’ve likely just been hit with a ton more. Maybe you and your siblings drew straws and you came up short and now you’re the executor of the estate, and trying not to lose your mind because you don’t know what that means.

If that’s you, fear not! As a New Jersey Estate Planning Attorney, I’m here to help explain things a little better.

First Steps of The Executor

First things first, if you were named as an executor in your loved one’s will, you’ll need to go to the surrogate court and ask to be formally appointed as an executor. You can do this as soon as ten days after death, and will need to bring the will and a certified copy of the death certificate. If the will isn’t self-proving, you’re going to need two witnesses who saw the deceased person sign the will (and who signed it themselves) to appear or submit a sworn statement as well.

What If There Is No Will?

If there isn’t a will, or if the person named as executor in the will doesn’t want to step up, it’s okay! No need to panic. If that happens, the court will then appoint an administrator for you. This person takes on all of the same responsibilities as an executor, and New Jersey law allows for the surviving spouse, if any, the priority of the appointment.

What If I Don’t Live in New Jersey?

If your administrator or executor is not a resident of New Jersey, they must post a bond, unless they will state otherwise. And if you’re confused about bonds, all a bond does is protects the estate (as a kind of insurance policy) if the executor or administrator tries to steal or mismanage any estate funds.

Letters Of Testamentary

If there’s concern that the will is not valid, or someone is contesting it, the surrogate court will issue a document called “Letters of Testamentary.” This document allows an executor or administrator the ability to do the following:

  • Collect, inventory, and keep safe the deceased person’s assets.
  • Have assets professionally appraised, if necessary
  • Pay any valid debts and taxes and
  • Distribute the remaining property as the will or state law (if there is no will) directs.

Notifying Heirs and Beneficiaries

As an executor, you also must mail notice to all heirs and beneficiaries of the proceeding, and you have 60 days to do it. You are also entitled to compensation (or commission) for settling all the affairs of the estate. The commission is normally 6% of the income of the estate, plus 5% of the gross value of the estate up to $200,000. If it’s over that, you get 3.5% up to $1 million and 2% on amounts over $1 million.

So as you can see, it’s a lot to take in and a lot to do, but there is a bit of light at the end of the very dark tunnel. And in a time where everything seems dark, sometimes even the faintest bit of light is enough to brighten up the entire world.

How to Avoid Probate: Part 2

Welcome back! If you’re here, you probably already read the first part of our handy How to Avoid Probate series. In part 1, we discussed how to avoid probate using revocable living trusts and Pay-On-Death accounts and registrations.

In this, the second part of our guide, our New Jersey Estate Planning Attorney will take a quick look at two more ways to avoid the probate process. You are able to do that by jointly owning property or by giving gifts. We’ll go into more detail below, so keep reading and be enlightened!

Joint Ownership of Property

The truth is that using this method provides a quick and easy way to avoid probate altogether whenever the first owner passes away. Actually, there are several ways this can be accomplished. To take the title with someone else and avoid probate, all you have to do is a state, on the paper that shows your ownership (like a real estate deed, for instance), how you want to hold the title.

Generally, no other documents are needed, and when one of the owners dies, the property transfers to the joint owner, without ever getting probate involved. Neat, huh? There are a few ways to do this, so let’s quickly look at them below:

  1. Joint tenancy with the right of survivorship
    Any property owned in joint tenancy will pass automatically to the surviving owner when one owner dies.
  2. Tenancy by the entirety
    In a few states, married couples can often take a title not in joint tenancy, but in what is called “tenancy by the entirety.” It’s like joint tenancy, but in fact, only married couples may use it. In some states, even same-sex partners can do it, as long as they have registered with the state. Both ways work to avoid probate in exactly the same way.
  3. Community Property with right of survivorship
    You can find another route to take if you live or own property in the following states: Alaska, Arizona, California, Idaho, Nevada, Texas, or Wisconsin. If you are married and co-own property with your spouse, you can use community property with the right of survivorship. This way, if one spouse passes, the other spouse automatically owns any assets upon death. If you’re in California and in a same-sex partnership, you can also do this as long as you’ve registered a domestic partnership with the state.

Avoid Probate through Gifting

Another way you can avoid probate is very easy and simple. You give all your stuff away! It’s true! Getting rid of all your possessions (or most of them) before you die is a way to avoid the process.

How? It’s simple: If you don’t own it when you die, it does have to go through the process! Doing this can lower probate costs because generally if there are assets with a higher monetary value going through probate, that makes the expenses higher as well. Plus, with most gifts, you don’t have to deal with federal gift taxes either, and not dealing with taxes is always a plus!

Stay Tuned for Part 3

That concludes part 2 of How to avoid Probate. In our next blog, we will take a look at how to avoid probate if you are a smaller estate. The New Jersey estate planning attorneys at Scott Counsel are here to answer your questions and provide the representation you need. Contact us today or give us a call to discuss your case. See you next time.

If There’s No Will, Is There Still a Way?

We discussed what a will is and why it’s important to have one in another article (which you can find here). That’s all well and good, but what if you don’t have one? So, what now? Now, before you start panicking, let me put your mind at ease. If you don’t have a will, two things can happen, and we’ll look into those two things more closely now. The first of these is known as an Affidavit.

Affidavit

While the term may appear to be confusing, an affidavit is simply a written statement of facts. There are, however, various types. For example, if a person dies but is survived by a spouse and the property they owned is less than $20,000, an Affidavit of Surviving Spouse can be issued to dispose of the property without involving Administration.

If there are heirs but no spouse, an Affidavit of Heirs can be issued to the person who is the deceased’s closest kin. However, keep in mind that property owned by the deceased alone cannot exceed $10,000, and that consent from certain individuals may be required.

If everything goes well, the Surrogate can issue either an Affidavit of Spouse or an Affidavit of Heir, allowing the named individual to act on behalf of the deceased in relation to the property listed in the document. These documents are not available until the sixth day after the death.

Administration

If the value of the property owned exceeds $20,000 and there is a surviving spouse, that person may be appointed Administer of the estate, and a bond for the full value will be posted if there are other people entitled to inherit it.

If there is no surviving spouse and the estate exceeds $10,000, the next-in-line heir can be appointed as administrator, and the rest of the process is the same. Please keep in mind that renunciations may be required.

If you want to be considered for the position of administrator, the Surrogate Court requires a few things. A certified copy of the death certificate and qualification papers signed by the applicant are included (s). Letters of Administration and certificates will be issued once all requirements have been met, but not until the sixth day after death.

Contact New Jersey Estate Planning Attorney Today

No need to panic if you don’t have a will. While attorney Justin Scott agrees it can be (and usually is) beneficial, he also says:

“There are ways to work around it. These steps, while they can seem rather daunting, are in fact quite easy to understand, if you have knowledgeable people passionate about what they do. It’s our job to take care of the hard parts because waking up and living each day with the loss of a loved one is plenty hard enough.”

Contact us today at (856) 485-4585.