What Does a Will Do?
By Kenneth A. Vercammen, Esq.
As average Americans, we work 80,000 hours in a lifetime, or 45 to 55 years. In spite of all the resources and assets we earn, the vast majority of us do not take the time to create a Will.
Many Americans foolishly without leaving a Will. There are several reasons for this: fear of death; procrastination; and misinformation (people presume that only the rich need to have Wills). Whatever the excuse, it is clear that people would benefit from having a Will.
In the absence of a Will or other legal arrangement to distribute property at death, problems arise. The result can be lengthy delays before the rightful heirs receive their property. And because the state has no instructions from the deceased, no charitable gifts will be made.
A Will makes the Probate process easy and less expensive.
“A Will is a formal Legal written document which, after your death, directs how your individually owned property will be distributed, who will be in charge of your property until it is distributed and who will take care of your minor children if the other parent should die ". You should remember that the term “property” under the law includes "real estate as well as other possessions and rights to receive money or items of value.” Everyone who has at least $3,000 in assets should have a Will. You do not have to be wealthy, married, or near death to do some serious thinking about your Will.
ADMINISTRATION OF AN ESTATE
Your estate will be subject to probate whether or not you have a Will and in most cases, a Will reduces the cost by eliminating the requirements of a bond. With a well-drawn Will, you may also reduce death taxes and other expenses. Don’t pinch pennies now to the detriment of your beneficiaries.
If you are named the executor, the Executor will visit the County Surrogate to probate the Will. You will need the following items:
1. The Death Certificate
2. The Original Will
3. Names and Addresses of decedent's, next of kin and list of beneficiaries
4. Minimum of $130.00 for Surrogate fees
The proper preparation of a Will should involve an analysis of the client’s assets, family and his/her desires. Estate Planning is the process of examining what will happen to your property when you die and arranging for its distribution in such a manner as will accomplish your objectives.
The cost of a Will depends on the size and the complexity of the estate and the plans of the person who makes the Will.
A properly drawn Simple Will without Trust costs approximately $300.00 to $600.00. It is one of the most important documents you will ever sign, and may be one of the best bargains you will ever have.
Be sure your Will takes into account the Federal Tax changes and New Jersey Inheritance Tax changes. Also, ascertain if your Will is “self-proving”, which would dispense with having to find the Will’s witnesses after death.
IF YOU HAVE NO WILL:
If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:
* State law determines who gets assets, not you
* Additional expenses will be incurred and extra work will be required to qualify an administrator
* Possible additional State inheritance taxes and Federal estate taxes
* If you have no spouse or close relatives the State may take your property
* The procedure to distribute assets becomes more complicated-and the law makes no exceptions for persons in unusual need or for your own wishes.
If no Will, a formal, written Renunciation of the right to serve as the estate's Administrator signed (in the presence of a Notary Public) by every person, if any, who has statutory preference over the applicant to serve as the estate's Administrator. This often means all the children having to sign the Renunciation.
If all the children Will not sign a renunciation, an expensive Complaint and Order to Show Cause will have to be filed. At the Superior Court hearing a beneficiary will have to convince the Judge to appoint them as the Administrator. Legal fees and court costs over $3,000. They will then have to pay for a bond usually costing over $1,000. Then later usually a Formal Accounting has to be filed. All this could be avoided with a proper Will prepared by an Estate Planning Attorney usually costing $300-$600 each.
* It may also cause fights and lawsuits within your family
What happens if you don’t have a Will or a cheap online form is not accepted:
1. People you dislike or people who dislike and ignore you may get some of your assets or control assets. State law determines who gets assets, not you. Many people now prefer to leave assets to grandchildren, friends or charities rather than non-working children.
2 Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs and legal fees
3. You Lose the opportunity to work with your attorney to try to reduce Estate Tax, State inheritance taxes and Federal estate taxes
4. If you have minor children, the County Surrogate will hold the child’s money until age 18 and it is difficult and time consuming to petition the Surrogate to release funds for payment of tuition, medical bills, clothing etc.
5. A Judge determines who gets custody of minor children. A greedy brother or crazy mother in law could ask the court for custody. The parent of your children may try to control the assets of your children and not properly spend the money
6. If you are separated and die without a Will, under the Uniform Probate Code your spouse will receive 100% of your estate if all the children are from the same relationship.
7 It probably will cause fights and lawsuits within your family
THE FOLLOWING IS A SAMPLE OF A VARIETY OF CLAUSES AND ITEMS WHICH YOUR ATTORNEY MAY INCLUDE IN A WILL:
1ST: DEBTS AND TAXES
2ND: SPECIFIC BEQUESTS
3RD: DISPOSITION TO SPOUSE
4TH: DISPOSITION OF REMAINDER OF ESTATE
5TH: CREATION OF TRUSTS FOR SPOUSE
6TH: CREATION OF TRUST FOR CHILDREN
7TH: OTHER BENEFICIARIES UNDER 21
11TH: NO SURETY OR BOND REQUIRED
13TH: AFTERBORN CHILDREN
14TH: PRINCIPAL AND INCOME
15TH: NO ASSIGNMENT OF BEQUESTS
17TH: CONSTRUCTION OF WILL
18TH: NO CONTEST CLAUSE
A Will must not only be prepared within the legal requirements of the New Jersey Statutes but should also be prepared so it leaves no questions regarding your intentions.
WHY PERIODIC REVIEW IS ESSENTIAL
Even if you have an existing Will, there are many events that occur which may necessitate changes in your Will. Some of these are:
* Marriage, death, birth, divorce or separation affecting either you or anyone named in your Will
*Significant changes in the value of your total assets or in any particular assets, which you own
* A change in your domicile
* Death or incapacity of a beneficiary, or death, incapacity or change in residence of a named executor, trustee or guardian of infants, or of one of the witnesses to the execution of the Will
*Annual changes in tax law
MAY I CHANGE MY OLD WILL?
Yes. A Will may be modified, added to, or entirely changed at any time before your death provided you are mentally and physically competent and desire to change your Will. You should consider revising your Will whenever there are changes in the size of your estate. For example, when your children are young, you may think it best to have a trust for them so they do not come into absolute ownership of property until they are mature. Beware, if you draw lines through items, erase or write over, or add notations to the original Will, it can be destroyed as a legal document. Hire a good attorney to do it right. Either a new Will should be legally prepared or a codicil signed to legally change portions of the Will.
WHAT IS A WILL?
A NJ state inheritance tax return must be filed if real estate is left and the tax may be required on the transfer of real or personal property within eight months after death.
OTHER ITEMS OF CONCERN TO BE PREPARED BY YOUR ATTORNEY
-Trusts (and Medicare Trusts)
-Power of Attorney- to allow a trusted person to administer your assets during your lifetime, either upon disability or now. We recommend you have a new Power of Attorney drafted every 5 years, Never rely on a cheap online forms.
-Living Wills- to state your wishes concerning medical care in the event of your serious illness
We have attempted to briefly explain in this article some of the issues, techniques, and decisions involved in Wills, Estate Planning, and Administration of an Estate. Because the matters covered are complicated and the Federal and New Jersey laws frequently change, this article can only outline some of the many legal issues you should consider.
Kenneth A. Vercammen is a Middlesex County trial attorney. He is author of the ABA book “Wills and Estate Administration”. He who has published 125 articles in national and New Jersey publications on litigation topics. He has been selected to lecture to trial lawyers by the American Bar Association, New Jersey State Bar Association and Middlesex County Bar Association.
Call our office to schedule a confidential appointment 732-572-0500