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.

Does a Power of Attorney Expire?

There’s a lot to find out there regarding power of attorney, but something you may not be aware of is whether or not it will eventually expire, so let’s do that right now.

What we do know about power of attorney is that it is given to a person so that they can make decisions on behalf of someone who cannot. We also know that there are different types of power of attorney documents for different needs a person may have (like a health care power of attorney). But it’s only natural to wonder if it expires. You may think that a power of attorney would expire after death (logically), and if so, you are correct.

Every power that was granted in a durable power of attorney ends upon the death of whoever created the document. At that time, the person (or agent) who had been appointed power of attorney has no further duties, rights, or responsibilities.

If there is a will, the executor named therein becomes responsible for gathering up any property owned at death and then distributing it according to the instructions in the will. If directions are left in a trust, however, then it is the successor trustee who is responsible for this part.

If there is no will or trust, but there is property to distribute, then it will be done according to intestate succession laws. These normally will follow a hierarchy or sorts that depends on the closeness of the relationship between the survivors and the deceased.

Intestate laws also control who is authorized to direct both how and where a person should be buried or cremated if he or she left no instructions regarding that matter. Again, there’s normally a hierarchy to follow, starting with the nearest relative.

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.

Advance Directives, The Living Will

You might know an advance directive by one of its other names, a living will. And what it does is it allows you to make your wishes known in regard to your medical treatment at such a time that you are unable to communicate those wishes on your own. However, before the advance directive can start working on your behalf, there are a few things that need to happen first. It must be certified by two physicians that:

 

  • You are unable to make any medical decisions on your own.
  • You are currently in the condition that is stated in the state’s “living will law,” like permanent unconsciousness or some form of “terminal illness.”
  • Be aware that other conditions may also apply, but this can vary from state to state.

The following would also be beneficial to keep in mind as well:

  • If you are unable to make your own decisions, but then regain consciousness, the person you named in your medical power of attorney (the agent) cannot keep making medical decisions for you.
  • A lot of states also have more requirements that are applicable only to those decisions concerning any life-saving or life-sustaining medical help.

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.