Estate planning in NJ is essential if you hope for the majority of your assets to go to your heirs. New Jersey’s unfavorable estate taxes can cause heirs to lose a vital portion of an estate, and without the help of a lawyer, your desires may never be met.
Four laws in the state have a major impact on estate planning and will be discussed in-depth.
Durable Power of Attorney Laws
Durable power of attorney is a vital estate planning legal process. The “durable” portion allows the legal aspects of this process to remain even if you’re incapacitated. This legal process protects you by allowing you to:
- Grant another person durable power of attorney on your behalf
- Allows health care and end-of-life decisions to be made on your behalf
The person granted power of attorney will be able to make decisions on your health when you’re not capable of doing so properly. Under New Jersey law, this document will need to follow the following guidelines:
- Contain a signature and date
- Include two witnesses
The two witnesses will need to declare that you were of sound mind during the legal process, and there was no undue influence involved. It is possible to revoke this legal procedure both orally or in writing with the lawyer that helped you form the durable power of attorney.
For example, perhaps you no longer want an ex-wife to have durable power of attorney, you could revoke this right.
Living Will Laws
A living will or a health care directive is utilized by a person to mark their preference in the event they need medical or end-of-life care. This is a document that must be formed when a person is of sound mind and able to make decisions on their own behalf.
Living wills work in part with a durable power of attorney.
The living will goes into effect when a person is no longer able to communicate their wishes to medical professionals or their desired durable power of attorney. The wishes of the living will are often carried out by the durable power of attorney.
Some medical professionals may not be willing to carry out the directives of the will and must transfer the patient to another doctor that will honor the directives.
For example, a person may wish to not be put on life support even though they have a high likelihood of a normal life. A doctor may not be willing to pull the plug on the patient because their firm belief is that the patient can survive. In this case, the patient would be transferred to another doctor that will carry out the wishes in the living will.
The living will can include:
- Acceptance / refusal of treatment, procedures or service
- Acceptance / refusal of procedures by a particular medical professional or care provider
Virtually every aspect of care can be covered from using lifesaving procedures or mechanical measures to keep a person alive. The only thing a health care directive will not cover is comfort care and pain management.
The requirements, by law in New jersey, for a living will are:
- Signature and date
- Two witness signature
The witnesses will state that the signee was of clear mind and not under distress when signing the living will. In New Jersey, the law dictates that the living will revokes a former spouse’s designation as representative of a living will.
This is a safeguard that protects couples that make a living will and become divorced afterward.
The foundation of estate planning in NJ normally starts with a will. A will is a legally binding statement that is recognized in most states. In general, will laws do not differ much from state-to-state.
One consideration is that oral wills are not legally valid in New Jersey.
If the testator’s handwriting is used, a written will is recognized in New Jersey. This allows a person to make their own will in haste, if needed. The requirements for a will to be legally binding are:
- The testator must be 18 years of age or older
- Two witnesses must be present at the signing of the will
If you die and do not have a will created, your estate will fall into “intestate” law. This law will use a set of standard rules to divide your estate up accordingly. You’ll have family members that will receive your assets, but if you wanted to pass heirlooms to your children, for example, without a will, the court will divide the estate as it sees fit.
Keep in mind that some financial institutes will not follow your will. This is the case when a beneficiary is in place.
Life insurance policies, for example, will have a beneficiary and will not be subject to your will. If a major life change occurs, such as divorce, it’s important to update any beneficiaries you may have for life insurance, retirement accounts and so on.
Estate planning in New Jersey requires a firm understanding of the state’s probate laws. Probate is the legal process that follows a person dying. Probate laws are followed with or without a legal will in place.
In the event a person dies, all of their assets will be distributed in accordance to their wishes.
But if no will exists, the state’s probate laws will dictate how the estate is divided. In some cases, probate is not required as it depends on which assets the deceased owned.
Probate matters go through the Surrogate Court. The court will appoint someone the administrator of the estate. If a will is in place, the administrator may be named in the will, or a court or clerk of the court will appoint an administrator.
The administrator’s job is to:
- Create a list of all the assets the deceased owned
- Pay funeral expenses, creditors and taxes, or any other bills that may exist
- Distribute the remaining assets
All of the debts of the deceased will be paid through the assets of the estate and not out of the pocket of the administrator.
The Micklin Law Group, LLC is a New Jersey law firm focusing on family law for men and fathers. Attorney Brad Micklin was recently named to The National Advocates list of Top 100 attorneys from each state. Brad has experience working with high asset divorce. You can read more on this topic by visiting our divorce blog. To set up a consultation, call 973-562-0100.