Estate planning can seem daunting at first glance. However, it is important to ensure you and your assets are prepared for the future. In order to ease some of the tension surrounding estate planning, this blog breaks down two common estate planning documents: the last will and testament and the revocable living trust.
LAST WILL AND TESTAMENT
In New Jersey, a last will and testament is a document stating how a person wants to distribute their assets and estate when they die. A will can describe how the assets will be distributed, such as who will receive personal property, real estate, and life insurance policies. The will can list the number of beneficiaries, from family, friends, and even charitable organizations. The owner of the will is the testator. A testator may choose an executor who manages the estate in accordance with the will once the testator dies. Additionally, the testator may change or revoke the will at any time, prior to their incapacitation or death. In New Jersey, a will must be signed by two witnesses to be legally executed. The law is specific about a will’s requirements. Therefore, it is important to get an estate attorney who can help you create your last will and testament. Additionally, after the death of the testator, a will must be probated. Probate is a legal proceeding, and in NJ it is not complex. A will can also be notarized to make it a self-proving document. This means that after the death of the testator, the witnesses will not have to testify as to the mental capacity of the testator at the time of the signing. Overall, notarizing your will gives assurance that it can be admitted to the probate proceeding with ease. It is more common to have a last will and testament in NJ as opposed to a revocable living trust. However, a trust has other benefits that a will may not provide, which is further explained below.
REVOcABLE LIVING TRUST
As mentioned, revocable living trusts are not as common as wills in New Jersey. This is because, typically, trusts can be used to get around the probate process as trusts do not have to be probated. In some states, the probate process is very long and complex. Therefore, it is easier to have a living trust which evaporates the need to go through that long, confusing process. However, in NJ the probate process is relatively simple. So, it is not necessary to avoid probate, thus making living wills more common. But trusts have different benefits than wills and so there may be some circumstances where you prefer to have a trust over a will, regardless of the probate process. First, avoiding the probate process keeps the matter private. Because probate is a court proceeding, the details become public record. This is not a concern with a trust because it does not have to be probated. So, if you have assets or details of your estate you would like to be kept private, a trust is a good option. Usually, privacy is not good enough of a reason on its own to use a trust over a will. Additionally, if you have a beneficiary under the age of 18, its beneficial to use a trust. This is because a trust will hold the assets until the beneficiary reaches 18 years old. Also, a trust can distribute the minors assets for health and education as well as distribute the estate over time rather than in a lump sum all at once. If a financial situation is complex or confusing a trust may be better suited to lay out your desires. But, if you do not have additional estate, grand personal wealth, a beneficiary under the age of 18 or complex financials a will is likely more suitable than a trust. A living trust may require more work than a will. If you utilize a trust when you acquire new properties and assets there are certain necessary procedures to ensure the trust governs the new assets. Also, use of a trust only avoids the probate process if all property and assets are governed by the trust. Any property not in the trust at the time of death will still be subject to probate.
Estate planning is important and it’s beneficial to begin early. Not having a will or trust may cause extensive litigation with your estate and beneficiaries in the future. Each persons assets and values are unique which is why a experienced estate law attorney can help you make the right decision for you and your family. The attorneys at Scura, Wigfield, Heyer, Stevens and Cammarota, LLP can help. Please call our office today to schedule a consultation.
