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.

How to Avoid Probate: Part 1

“Probate this, probate that!” you may be thinking. That’s fine, but what if I don’t want to deal with any of it? Is there a way to avoid it entirely?

The simple one-word answer is: YES!

In Part 1 of this three-part quick how-to guide, we’ll cover a couple of things: Revocable Living Trusts, Pay-On-Death Accounts, and Registrations.

To begin, let’s look at the first thing.

Revocable Living Trust

Basically, Living trusts were created in order to give people an end-run around probate. One advantage of having any of your valuable property in a trust is that it is not considered part of the probate estate. Keep in mind, however, that it is counted as part of the estate for federal tax purposes.) The reason for this is because someone called a trustee, and not you as an individual, owns the property left in the trust.

After you pass away, the trustee can then easily and quickly pass along the trust property to whomever you left it to—thus avoiding the probate process. You are also able to specify in the trust document (think of it almost like a will) who you want to inherit the property, whether family or friends.

Pay-On-Death Accounts

Something interesting that you can do with your bank accounts and retirement accounts are to convert them into what is known as a Pay-On-Death account. This process is rather easy. All you have to do is fill out a simple form and then list someone as a beneficiary. Upon death, the monies in those accounts go directly to the beneficiary you listed and thus avoid the probate process.

Registrations

You can also do the same thing for security registrations and, in some states, even vehicle registrations as well. It is important to note that some states also allow for Payable-On-Death real estate deeds that use a deed that doesn’t go into effect until you pass away.

Other Ways to Avoid Probate

So as you can see, there are quite a few ways to fully avoid going through probate if that’s something you decide you’d rather not do. In part 2 of our article, we’ll look at how to avoid probate using Joint Ownership of Property and by giving Gifts.

Scott Counsel’s attorneys are well-versed in Surrogate Court procedures. When your rights are violated, we can advise you of your rights and, if necessary, file a lawsuit to seek an appropriate remedy. Contact us today at (856) 485-4585.

A Simple Will: Just the Basics, Please

So, most people have heard of a will. It’s a good idea to have one because if you don’t, the state decides who gets your belongings and, in some cases, who raises any children you leave behind. If the thought of that scares you as much as it does me, you should probably make a will. While this may appear to be a nearly impossible task, it does not have to be. In fact, there is such a thing as a basic will, and our New Jersey estate planning attorney will explain further.

You Can Write Your Basic Will Yourself

If all you want or need is a basic will, you can actually write it up yourself, without any legal help, using a do-it-yourself book or software. Fear not, making a will this way ensures that it’s just as legally binding as if you had a professional help you with it.

With a basic will, you can make a binding document that does the following:

  • Leaves your property to the people and organizations of your choice
  • Names a guardian to care for any minor children you have in case you can’t
  • Names someone to manage any property you leave to any minor children (either your own or someone else’s) and finally
  • Names your personal representative, who makes sure that the contents of your will are carried out.

When Do You Need a basic Will in New Jersey?

In general, if you’re under 50 and don’t expect to leave a lot of valuable assets behind to estate taxes, you should be able to get by with just a basic will. However, as you get older and have more valuable possessions, it may be a good idea to look into something better.

Can A Basic Will Avoid Probate? 

Unfortunately, there is no way to answer that question. If you leave anything more than a small amount of property in your will, probate proceedings will almost certainly be initiated. It’s no secret that probate is a time-consuming and expensive process, lasting anywhere from six months to a year and costing up to 3-5 % in lawyer and court fees. Beneficiaries will also receive little to nothing until the process is completed.

The good news is that if you only need a basic will, you don’t need to worry about probate right now. If you’re young, in good shape, and don’t have a lot of money, your main priority should be to plan for the unlikely event that you die suddenly and unexpectedly. Aside from that, you almost certainly have enough time later to plan for all of these other things.

Our New Jersey Estate Planning Attorney is Here to Help

So concludes our brief examination of a basic will. We hope this helps to shed some light on a situation that you may not have realized could apply to you. Finally, consider this quote from New Jersey estate planning attorney Justin Scott.

“Anything dealing with legal matters can be confusing and costly, so it’s good to let people know there is something they can draw up themselves, with the help of books or software, and make sure that the important things in their lives are taken care of without having to go through the stress and hassle of having to shell out a lot of money to hire a professional.”

Setting Up the Home for Caregiving

When preparing to care for an elderly loved one, either in their home or your own, it is important to make sure that as much of the house as possible is safe for them to move around in (if they can), and safe for them to live in. Let’s take a look at some of the ways to keep the home safe for our elderly loved ones.

First of all—the bathroom. Since we lose the strength in our extremities first as we get older, the fact that bathrooms contain lots of moisture, slick surfaces, and nowhere soft to land if we fall, the bathroom is one of the most dangerous places in a home. Even just trying to get on or off the toilet can be dangerous for an elderly person, let alone trying to get into or out of the shower. Doctors will often recommend an elevated seat with armrests for extra support. However, even models that can be clamped into place won’t work well if the person is overweight. Instead, a better model is one that combines both the seat and armrests with a hydraulic lift that can be used as a bedside toilet.

Grab bars are a must for the tub or shower, and there are even suction grab bars that have armrests that are portable, sturdy, medically safe, and won’t cause holes in your walls. These range in price from $65-$140, which is less than hiring someone to install something for you. Those less than $65 tend to be more dangerous, as they can lose suction, so be cautious!

For the person who has trouble staying in bed, the Standers EZ Adjust Bed Rail might do the trick since it’s quite simple to install and use, and can be adjusted to three different lengths.

The Sonic Boom Alarm Clock series comes in a variety of styles uses a number of features that are specifically for keeping even heavy sleepers from missing their alarm. Such features include a bed-shaker that shakes enough to wake them up, to adjustable alarm volumes ranging from “subtle” all the way to “wake the neighbors,” and most clocks also have battery power backups in case the power goes out.

If you have any questions about these or any other concerns regarding home safety for the elderly, the professionals at Scott Counsel will be happy to assist you in answering them and, most importantly, alleviating your fears.

If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.

Executor vs. Power of Attorney

If you have an executor already named in your will, do you still need a power of attorney? They aren’t really that similar, right? More or less the same things? No, in fact, they are not the same things; there are some key differences between the two, so let’s take a look at them now:

Power of Attorney

A person who is named power of attorney is someone who has the proper authority and powers (given by you) to handle any and all financial matters and property, and sign their name in your place. This authority only goes for as long as you are alive, and any power or authority you grant them ends at the time of your death.

Executor

Like a power of attorney, the person named the executor in the will has both power and authority to handle both property and finances after you’ve passed away (and after their appointment has been approved by the Court).

While duties of both executors and attorneys-in-fact (the official title of the person you appoint in a Power of Attorney) are quite similar, the main difference between them is that one of them has power and authority to act only so long as you’re alive (and ends once you’ve passed away), while the other has power that activates after you have passed away.

If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.

Last Instructions: An Answer to What and Why

The period of time right before and right after someone passes away is one of the most chaotic times someone might personally experience. Making matters worse is the fact that no one’s business is ever in perfect order. Add to that the fact that those left behind often have to handle the fallout without having all the necessary information and it becomes a perfect storm of unfortunately normal and never easy.

Justin Scott, of Scott Counsel, recommends a letter of last instruction. “Outside of having a will, it will allow you to make your wishes known on how you want things to be handled.”

So, what can be included in your letter of last instruction? Let’s take a look!

  • Names and addresses of those who should be notified upon your death
  • Names of your family members and their relationships
  • The location of your will
  • Instructions on funeral and burial arrangements
  • The location of any and all important papers (like marriage/divorce papers, automobile title, discharge from the military, etc.)
  • Cemetery plot information
  • Safe deposit box location
  • A list and location of insurance policies
  • A list and location of any and all bank accounts (including checking and savings)
  • Information on pensions, trusts, etc.
  • A list and location of all stocks, bonds, securities, etc.
  • A statement of any and all real property with locations of mortgages, deeds etc.
  • Location of all income tax returns for the previous five years
  • Current bills, debts and cancelled checks for five years

If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.

Estate Distribution Without a Will

If you die without a will, that’s called dying “intestate.” So, if that happens, how can your estate be divided up and distributed? Thankfully, New Jersey law has you covered. For now, though, let’s look at how just property are assets in the name of the decedent are handled:

  • If you die and leave behind a spouse and children from the same marriage, the spouse then will inherit EVERYTHING (this does not include step children or children from a prior marriage).
  • However, if you die and leave behind a spouse and children from a previous marriage, the spouse will only get the first 25% of the estate, but not less than $50,000 or any more than $200,000. They would also get one-half of any balance of the estate, while the balance would be divided equally among the children. Grandchildren, though, will take the share from their deceased parent.
  • If you die and leave behind a spouse, a child or children and a stepchild, or any stepchildren, the spouse will get the first 25% of the estate, but not any less than $50,000 or any more than $200,000, plus one-half of any balance of the estate. Children would take the balance of the estate equally, while grandchildren would take the share of their deceased parent, as stated above.
  • If you die and leave behind a spouse but no children, and are survived by your parents, the spouse inherits the first 25% of the estate, but not less than $50,000 or more than $200,000, plus three-fourths of any balance of the estate. Your parents would then take the balance equally.
  • If you die and are survived by a child or children but no spouse, the children would inherit equally while any grandchildren would take the share of their deceased parent.
  • If you die and no immediate family (i.e. spouse, children or grandchildren), your parents will inherit everything. However, if you do not have parents, any siblings you have will inherit equally. Like grandchildren, any nieces and nephews would then take the share of their deceased parent.
  • If no immediate family survives, then your property can go to more distant relatives, like grandparents, aunts, uncles, cousins, etc. Then it may go to stepchildren or can even revert back to the State.

If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.

Estate Planning and the Second Marriage

“Marriage is the triumph of imagination over intelligence. Second marriage is the triumph of hope over experience.”  – Samuel Johnson

Hope does indeed spring eternal which may explain why approximately 75% of divorced people remarry. The National Stepfamily Resource Center reports that approximately 65% of these marriages will include children from previous relationships.

Before the wedding plans progress too far, the happy couple should temporarily interrupt their bliss to discuss the mundane and sometimes uncomfortable topic of wills and trusts – particularly when either or both have children. Planning issues vary widely depending on the ages of the husband and wife and the financial wherewithal of each. As the years march by, planning objectives will most likely evolve.  Arrangements regarding the couple’s estate plan are often outlined in a prenuptial agreement with contemporaneous execution of the appropriate documents.

Example: James and Karen, both widowed, reconnect at a reunion – rekindling their high school romance. After a few years of dating, they decide to get married. James has 2 grown children as well as a number of grandchildren with whom he is close. His healthy financial portfolio (close to $3,000,000) reflects years of hard work in his practice as well as a savings mentality. Karen was attracted to a career in public service because she loves to help people but didn’t think about lifestyle consequences when choosing her career path. Unfortunately, her bank account is virtually nonexistent and she lives paycheck to paycheck. She has no children.

James is head over heels in love and wants to make sure that Karen is taken care of financially in the event that he predeceases her. On the other hand, he wants to provide generously for his children and grandchildren. He is hesitant about leaving his estate outright to his beloved. What if he dies within a short period of time and Karen remarries? After all, James’ hard earned money could end up in the hands of some man that he doesn’t even know – if she remarries and names her new husband as beneficiary. Karen is particularly concerned about her ability to remain in the home (and to afford it) if he predeceases her. A number of creative plans can be designed to satisfy all objectives. The following represents only one possible solution:

Through his will, James establishes a life estate in the property for Karen’s benefit, giving his children a remainder interest. (An issue to address is whether the life estate terminates if an unrelated male moves into the property or if she vacates the property for a certain period of time.)  After calculating the amount that would allow Karen to enjoy a reasonable lifestyle, James purchases a life insurance policy naming either Karen or Irrevocable Life Insurance Trust (ILIT) as beneficiary. He devises the remainder of his assets to his children.

If James is not inclined to buy life insurance, he could set aside a portion of his estate in a Qualified Terminable Interest Property (QTIP) trust for Karen’s lifetime benefit with the remainder interest passing to his children. Under governing rules, Karen must be the sole beneficiary during her life and receive distributions of all income.  The trust document may allow for distribution of principal to her as well. The assets funding the QTIP are eligible for the unlimited marital deduction if James predeceases Karen and is included in her estate when she passes away. However, she has no power to name the beneficiary as James’ designation controls.

If you have questions about estate planning in the context of a second marriage, give us a call 856-281-3131.  We will be happy to discuss a variety of creative solutions.