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Getting Started

1. What is estate planning?

Estate planning is basically planning how to distribute your money and property after you die. The phrase sounds very dry and technical. However, in today’s world it is extremely important to have a carefully thought estate plan drafted by an affordable and competent lawyer.

2. What does my estate consist of?

Your estate consists of all your property, including of the following:

• your home and other real estate,
• tangible personal property such as cars and furniture, and
• intangible property like insurance, bank accounts, stocks and bonds, and pension and social security benefits.

3. What is the difference between having an estate plan and a will?

An estate plan is a blueprint for where you want your property to go after you die. Meanwhile, a will is usually the most important part of an estate plan. However, a will is not the only part of it. These days it is very common for a person to have many different types of wills. Essentially, many New Jersey-ites use various methods to distribute their property regardless of whether the person has a formal will. Pensions, life insurance, gifts, joint ownership, and trusts are some of the ways you can transfer property at or before death quickly and inexpensively.

4. Are estate plans just for senior citizens?

We are all scared about death but it is coming sooner or later. The number of Americans who have will has grown by 50% in just 15 years. Thanks in part to growing interest in living wills, simplified procedures, and lower costs, millions of people of all ages and economic levels have taken steps to distribute their money and property according to a sound estate plan. Estate planning is not just for seniors any more. Watching the TV the news clearly proves that far too many young and middle age people die suddenly, often leaving behind minor children who need care and direction. Estate planning needs to be factored into your overall financial plan, along with your children’s college tuition and your retirement needs. If your financial or family circumstances change later in life, then it’s usually easy and inexpensive to adjust your estate plan. Most people also plan for a mental or physical incapacity that is caused from an accident or illness. Through living wills, health-care powers of attorney, and other mechanisms, they control beforehand how they and their property are to be cared for if disaster strikes.

5. What are the laws of intestacy?

If you die intestate and without a will, then your property still must be distributed. By not leaving a valid will or trust, or transferring your property in some other way, such as through insurance, pension benefits, or joint ownership, you have essentially left it to the State of New Jersey law to write your will for you. This doesn’t mean that your money will go to the New Jersey. That happens only in very rare cases where you leave no surviving relatives, even very remote ones. However, it does mean that the state will make certain assumptions about where you’d like your money to go. These assumptions you might not agree. The New Jersey intestate laws descent laws prefer “blood” over “marriage.” These laws assume that the more closely related you are to someone, then the more likely you’d want your property to go to him or her. Therefore, some of your hard-earned money might end up with people who don’t need it.

Meanwhile, some of your other relatives for loved ones who might need the money more, or who are more deserving, could be shortchanged in your estate plan. For instance, such as that favorite nephew of yours, or your other child, who has had trouble finding steady work. Moreover, if you die without a will, there is a good chance that your surviving relatives may fight over who gets particular items of your property, since you didn’t make these decisions before you died. Unfortunately, the New Jersey intestacy laws might also fail to provide adequate support for your spouse. Only a carefully thought out estate plan gives you the feeling of control that comes from knowing your family is provided for as you wish. You will be able to decide who gets your property, when they get it, how they get it, and how much they get.

6. What are the top ten things that estate planning can do for you?

The first step in planning your estate is to identify your major goals. Here are some typical goals and suggestions on achieving them.

1. Provide for your immediate family. Married couples want to provide enough money for the surviving spouse. They often choose to provide this income through life insurance, particularly for spouses who don’t work outside of the home. Couples with children want to assure their education and a proper. Therefore, if you have children under 18, both you and your spouse should have a will that nominates a guardian for the children, in the unfortunate case you both should die before they grow up. If you don’t appoint a guardian, then a court will decide without your input where your kids will live and who will make important decisions about their money, education, and way of life.
2. Provide for other relatives who need help and guidance. You might to provide for your family members whose lives might become more difficult without you, such as an elderly parent, disabled child, or a grandchild whose education you want to assure. In your will you could establish a special trust fund for family members who need your support that you won’t be there to provide when you die.
3. Get your property to beneficiaries quicklyYou may want your beneficiaries to receive your property and money in a reasonable time after you have left this earth. Some of your options may include avoiding or easing probate through insurance paid directly to beneficiaries, a joint tenancy, a living trust or other means.
4. Plan for incapacity. During estate planning, it is critically important for New Jersey-ites to also plan for any possible mental or physical incapacity. Living in the Garden State alone is enough to drive any New Jersey-ite to his wits end. Planning for incapacity is also important for single people as well. Living wills and durable healthcare powers of attorney can enable you to decide in advance about important issues such as life support and pick someone to make decisions for you about medical treatment.
5. Minimize expenses.  Everyone wants to keep the cost of transferring property to beneficiaries as low as possible. The less a person spends on the probate process, then this leaves more money for the beneficiaries. A well thought out and a carefully crafted plan can reduce these expenses significantly.
6. Choose executors/trustees for your estate.  It is very important to choose a competent executor. Don’t choose someone who has a gambling problem, or has issues with drugs and alcohol. I have heard of many stories of executors blowing the decedent’s estate, and wasting all of the heirs inheritance. The executor does not have to be a genius, but he or she should be responsible and fair minded. You should not pick Uncle Tony who constantly loses his paycheck by gambling at Atlantic City.
7. Ease the strain on your family.  Many people take the burden from their grieving survivors and plan their own funeral arrangements . Moreover, you may simply want to limit the expense of your burial or designate its place. You also can provide for your body to be cremated or given to medical science after you die.
8. Help out your favorite cause. Your estate plan can also help support your favorite religious, educational, and other charitable causes. It is important to note that charitable bequests offer important tax breaks to the decedent.
9. Reduce taxes on your estate.  Every dollar your estate has to pay in estate or inheritance taxes is a dollar that your beneficiaries won’t get. Therefore, it is critical that a good estate plan can give the maximum allowed by law to your beneficiaries and the minimum to the government. This factor becomes especially important as your estate approaches the magic number of $1 million, the level at which the federal estate tax kicks in under current law.
10. Make sure your business goes on smoothly.  If you have a small business, then the operation might crash upon your death. You can provide for an orderly succession and continuation of the business spelling out what will happen to your interest in the business.

7. Why is taking an inventory of my assets so critical to develop a good estate plan?

It is very critical for a person to take a careful inventory of all of their assets. A person should prepare a checklist of assets and debts. This checklist should spell out what you own and what you owe. A detailed inventory will enable you to do much of the preliminary work needed to prepare a solid estate plan.

8. What type of information should I have available to give to my attorney to assist him to prepare my estate plan?

In planning your estate it is very helpful to have as much of the following information on hand as possible.

1. The names, addresses, and birth dates of your spouse, children, and other relatives whom you might want to include in your will. List any disabilities or other special needs they may have.
2. The names, addresses, and phone numbers of possible guardians (if you have young children) and executors or trustees.
3. The amount and sources of your income, including interest, dividends, and other household income, such as your spouse’s salary or income your children bring home, if they live with you.
4. The amounts and sources of all your debts, including mortgages, installment loans, leases, and business debts.
5. The amounts and sources of any retirement benefits, including IRA’s, pensions, Keogh accounts, government benefits, and profit sharing plans.
6. The amounts, sources, and account numbers of other financial assets, including bank accounts, annuities, outstanding loans, etc.
7. A list of life insurance policies, including the account balances, issuer, owner, beneficiaries, and any amounts borrowed against the policies.
8. A list (with approximate values) of valuable property you own, including real estate, jewelry, furniture, jointly owned property (name the co-owner), collections, heirlooms and other assets. This list could be cross-referenced with the names of the people you might want to leave each item to.
9. Any documents that might affect your estate plan, including prenuptial agreements, marriage certificates, divorce decrees, recent tax returns, existing wills and trusts, property deeds, and so on.

9. Should my spouse be involved in my estate plan(ing)?

It is impossible to adequately plan for your estate if you don’t know the facts about all of the family assets. However, I still have many clients who come to my office for estate planning advice and they don’t have basic information about their spouse’s income. In many families the client doesn’t know how much the spouse earns, what benefits he or she is entitled to, or where the money is invested. Whatever the reason for this situation, it is very important to know this information when you are planning your estate. It’s especially important to find out how property you and your spouse own is titled, including insurance and other beneficiary designations. Many people might be afraid to cause a rift in the marriage by asking a spouse about financial affairs —especially if that spouse is the primary breadwinner in the family. The need to share information and plan ahead can be raised indirectly through another family member, an attorney, or other trusted professional. However, full knowledge of the family’s assets should be part of any sound estate plan.

10. What will it cost to prepare an estate plan?

The fees to prepare an estate plan are very reasonable. Theodore Sliwinski, Esq. strongly believes that a carefully thought out estate plan should be prepared at an affordable price. He charges $100 for a living will, $100 for a power of attorney, and $300 for a joint set of basic wills. If the will(s) complicated then the rates will be increased. Mr. Sliwinski, Esq. prides himself in providing quality services at affordable rates. If you need to have a trust prepared, or a specialized estate plan, then the fees are also very reasonable.

11. What steps should I undertake to prepare my will and trust?

Even if you have carefully thought about your estate plan on your own, don’t just expect to throw a bunch of papers on your lawyer’s desk and have a will or trust magically appear in a few weeks. The legal work to prepare these documents is seldom as simple as filling in blanks on a form. Most people will have to meet with their lawyer twice in the process, and more complicated estates may require even additional consultations.

At the first meeting, you will need to discuss your financial situation and estate planning goals. You should be prepared to tell your lawyer about some rather intimate details of your life. These details include how much money you have, how many more children you plan to have, which relatives you want to get more or less of your assets. Your lawyer will also have review any documents you’ve brought in and ask questions that will help you think through various issues and possibilities. Thereafter, he will probably outline some of the options the law provides for accomplishing your goals. Even though certain methods may be recommended over others, depending on your circumstances, it will still be up to you to make your own individual choices from among those options.

Thereafter, based on the choices you have made, your lawyer will draft a will or trust. At a second meeting or numerous phone conferences, he will review that document with you. If it meets with your approval, then the estate planning documents can be signed. If your estate planning is more complicated and if you have a larger estate, then you may have some long phone conversations with your lawyer. Moreover, you will be required to review several drafts of various estate planning documents, before everything is settled. It is important to emphasize that you should review your estate plan on a periodic basis. You will want to stay in touch with your lawyer. You should not think of estate planning as a one-time retail transaction at the mail. Instead, preparing your estate plan, should be viewed as an occasional process that works best when you have a continuing relationship with your professional advisers.

12. What other costs are involved with my estate plan?

Good estate planning, as described above, should minimize costs that come about after your death. These include the following:

A. Probate costs

Probate is the court-supervised legal procedure that (1) determines the validity of your will and (2) gathers and distributes your assets. If the probate of a will is not contested, then the cost of probate in New Jersey is a rather simple procedure and it won’t cost you an arm and a leg. Proper estate planning can greatly minimize these expenses by passing assets through means other than a will, thus limiting the size of your probate estate. The smaller the estate, the lower the costs, especially if it is small enough to qualify for quick and inexpensive processing.

B. Executor fees

By having a will and planning well you can minimize the executor’s fees. If you name a relative who’s a beneficiary under the will as executor (most likely your spouse), he or she will probably waive the fee. On the other hand, if you die without a will, the probate court will appoint a personal representative to see the estate through probate, at a cost to be deducted from your estate. Similarly, if you pick a third party, such as a lawyer, to be the executor, that person is entitled to a “reasonable fee” for seeing an uncontested will through probate. While the amount varies, the fee is usually tied to what trust companies would get for performing similar duties.

C. Legal fees in probate

If your estate is small and uncomplicated and your will is well-drafted, then your spouse or other executor may be able to reduce the costs of administration. If your estate gets more complex then the legal fees could be sizable. There could be for example, someone challenges the will, your will is out of date because you have a new spouse or child, or if the will is improperly prepared or executed, etc. The more complex the probate process is, then the more hours the lawyer will spend on the file, and the more it will cost your loved ones.

13. Why is it important to have a family meeting before I prepare my estate plan?

A couple should communicate with each other so they agree on what goes to the surviving spouse and what to the children. Because estate planning affects several generations, it may be a great idea, especially for families with grown children, to make your estate plan a family affair. A family should set aside a day and gather all family members who are involved in the plan. The parents can explain how this plan can have a major influence on all their lives, and why they are distributing gifts and trusts the way they are. They can also find out whether the children want to continue the family business, and ask if any property has sentimental values for them.

If you have such a meeting then you should encourage your family to voice their concerns and feelings about all this. This is very important when personal or financial considerations lead you to make unequal distributions among siblings. It is important to emphasize that fairness doesn’t always mean equal treatment, and you need to spell out the good reasons for making unequal arrangements to avoid later resentment. Your family members may even raise issues that will lead you to call your lawyer or change your estate plan.  Finally, don’t forget to tell the persons you’ve selected as executors or guardians of the children, to make sure they agree to serve.

14. Why is important to keep track of your finances for your executor?

One of the hardest tasks for an executor is to figure out just what money the dead person had coming in, and what bills and other payments need to be made. It is important to think about your personal finances for a moment. Now is the time to put yourself in an outsider’s shoes and write down all such expenses and income that might not otherwise be apparent to an executor. In doing so, you’ll probably put your life in better shape. It’s another example of how estate planning is more than planning for your death. It can also make your life a lot simpler as well.