Being Body Conscious

Given my father’s act of donating his body to science upon his passing, I thought I would touch upon the fact that in the State of New Jersey, there is a 10-day mandatory wait to probate a Will.  Why is that important?

Couple that probate delay with a family dispute over funeral arrangements, or actions that could render a bodily donation moot (cremation or embalming being the foremost concerns), how can a person best plan to have their wishes for bodily donation honored?

In New Jersey, a person may appoint a “Funeral Agent” under their Will in accordance with N.J.S.A. 45:27-22 (as with all Statutes, this may at times be subject to revision).  This agent’s role may include authorizing a funeral home to carry out the decedent’s wishes for bodily donation.

This statute is supported by Section 40 of P.L.2003, c.261 (C.3B:10-21.1), as it pertains to disposition of a body prior to the probate of a Will and the appointment of an Executor/trix.  An attorney licensed in New Jersey and familiar with matters estate and probate can advise and craft a Will to reflect a client’s intent of bodily donation, to include Funeral Agency provisions.

However, it is important to note that proper application/pre-registration with a chosen medical/scientific entity, while living, should be done if it is your intent to donate. Likewise, there is no guarantee that said entity has to accept a bodily donation, even with or without an earlier application having been made (each program sets their own perimeters for acceptable condition of a body upon donation).

In all events, those triggers for rejection of a donation, and whether or not bodily remains will be returned to a family once all usefulness has been reached (and in what condition), should be well defined in the application/pre-registration process an individual will undertake with their chosen medical/scientific entity.

*Photo art courtesy of Pixabay

In Will Contest, No Need to Oversell Decedent’s Capacity

In-Will-Contest-No-Need-to-Oversell-Decedent's-CapacityImagine a situation where a loved one dies and there is a contest over the validity of the will. The question arises: What was the decedent’s mental state in drafting the will?

A typical, knee jerk answer is that the decedent had a perfectly clear state of mind.

However, testamentary capacity doesn’t require such a high level of clarity in communication and comprehension. Further, overstating a decedent’s capacity might actually lead a trier of fact to become skeptical of the will proponent, especially if other evidence exists that the decedent’s mind wasn’t as clear as stated.

When a will is contested, the proponent has to prove that the decedent had the capacity to make the will. Meeting that burden requires showing that the testator knew the nature and extent of his property, knew the natural objects of his bounty and was aware of the contents of his will. Age and sickness aren’t determinative, and mental illness or failing memory do not preclude a decedent from having testamentary capacity to execute a will.

Cases on lack of capacity really come down to a he-said-she-said analysis. In one recent case in probate court in New York, an 83-year-old woman executed her will while in the hospital. A form in her records entitled “Adult Patient Without Capacity With Surrogate for DNR [Do No Resuscitate] Order,” stated, “I have determined that the patient lacks capacity to make this decision,” by reason of “dementia.” The records also noted that the woman became disoriented during dialysis the day she was admitted.

Yet the woman’s attorneys, whom she had known for years, said that her behavior at the time of executing the will was similar to that in her prior interactions with them and indicative of a sound mind. Further, her medical records from the day the will was executed said she was alert.

In this instance, the case didn’t go to trial. The court said that the parties protesting the will didn’t provide sufficient evidence to raise a triable issue of fact that the decedent lacked testamentary capacity.

However, in an earlier case before the same court, a woman in her eighties executed her will two years after suffering a debilitating stroke. A few months later she was found to be an incapacitated person under the state mental hygiene law. The court at that time said she needed one-on-one support and suffered from dementia.

Like the case noted above, evidence was offered on both sides. The proponent offered evidence that the attorney and others said the decedent was able to speak normally and understood her surroundings. However, the parties objecting produced evidence from a guardianship proceeding and the testimony of a treating physician that the decedent lacked testamentary capacity.

In this case, the court decided the case should go to a jury.

What happens in matters like these really depends on the facts and circumstances of the individual case. But it’s important to keep in mind that in order to prove capacity to execute a will, it isn’t necessary to demonstrate that someone who had challenges with verbal communication at the end of life or showed periods of confusion was of a perfectly clear state of mind. In fact, if you try to argue that too strongly, be aware that it might lead to skepticism on the part of the decider of your case.

If you have any additional estate planning questions or would like to schedule a consultation, please feel free to contact us at your earliest convenience.

Image courtesy of ambro at

Giving Your Heart (And More) To Your Pets

pet trust photo“There is sorrow enough,” Kipling writes, “in the natural way/from men and women to fill our day.” But the most tender trap, he says, is laid by our four-legged friends: “Brothers and Sisters, I bid you beware/Of giving your heart to a dog to tear.”

The Old Man’s point is instantly obvious to many: Pets are not just animals, they often are the heart and soul of our very lives, and they take something from us when they “go.”

There’s a corollary here, though: What about those poor creatures who have given their hearts to us? It wasn’t long ago that the very idea of leaving something behind for our pets was so absurd that Disney could literally make cartoon fantasy out of it. But cultural evolution is a marvelous thing, and just last year, Minnesota became the last (and final) state or territory to legalize pet trusts.

That does not mean it is easy. There is so much to consider. Below are a few things to bear in mind as you contemplate your pet’s life without you:

1. Consider the Costs

How much kibble does your Dalmatian eat? How often does your Siamese need to see the vet? You’ll want to take a careful look at the costs to take care of your lovelies, and what it’s likely to cost in the future.

2. Consider the Caretakers

Whom do you most trust to look after your pet? What if that person decides he/she is not up to the job? Naming the proper trustee-and, sometimes, backup trustees-is essential.

3. Be Specific

Does your parakeet absolutely adore “The Magic Flute?” Does your Lab seem happiest at that dog run down by the creek? Just as in all other areas of estate planning, there is no such thing as being too specific.

4. Know Your Own Limits

A carefully executed estate plan is not just for the afterlife. What happens, for instance, if you become incapacitated, even for a short while? A broken hip, for instance, can sideline those gorgeous walks down the beach. Crafting a concrete, clear and actionable plan for your pets can give you peace of mind for what happens after you’re gone. And, perhaps even more importantly, it can inspire you to make the most of your time left together.

Contact us today to learn how to make provisions for your furry friends when you can no longer provide it to them.

Probate and Estate Administration

Probate-and-Estate-AdministrationProbate and estate administration are not the horror show some make it out to be. If a Will is properly executed and nothing unforeseen arises, it can be a straightforward process by which taxes and debts of the decedent are paid and the remaining assets are distributed to beneficiaries (if there’s a Will) or the next of kin (if there isn’t).

Probate is the court-supervised process that may be needed after a person passes. It gives a person, normally a surviving spouse or close family member, the authority to pool the decedent’s assets, pay his or her debts and taxes, and transfer remaining assets to those who are named in their Will.

Probate may or may not be necessary. The process is required if the deceased had assets in his or her name only. Other “non-probate” assets may be transferred to their new owners without probate. They include:

  • Assets owned by the deceased with someone else in joint tenancy with right of survivorship or tenancy by the entirety. They pass by law automatically to the surviving owner.
  • Assets for which beneficiary was named outside of the Will such as IRA’s, 401(k) plans or payable-on-death bank accounts.
  • Life insurance proceeds or pension benefits payable to a named beneficiary.
  • Assets part of a revocable living trust.

If there is no Will or valuable property, surviving family members could use New Jersey’s simplified probate procedures, which are quicker and less expensive than regular probate. This may be an option for a small estate in which:

  • The value of all the assets do not exceed $20,000 and the surviving spouse or domestic partner is entitled to all of it without probate, or
  • There is no surviving spouse or domestic partner and the value of all of the assets does not exceed $10,000. One heir, if given written consent by the others, can file an affidavit with the court and receive all the assets.

Probate in New Jersey is handled by the surrogate’s court in the county where the deceased lived. Typically, if things go smoothly, the process can take less than a year. If there’s a Will, the person named to be in charge of the estate (the executor if a male, executrix if a female) makes a request to the court to be formally appointed. If there is no Will, or there is no executor available to serve, a person may ask the court to appoint him/her to become the administrator (male) or administratrix (female).

Unless the validity of the Will is challenged or there is otherwise some basis to believe it isn’t valid, the surrogate’s court will issue Letters Testamentary (for a will) or Letters of Administration (if an administrator is named). This allows the person to:

  • Gather, organize, inventory and keep secure the deceased’s assets
  • Pay debts and taxes
  • Distribute the remaining property as the Will, or without a Will, as state law directs.

The executor or administrator has authority over assets that go through probate. Complete and accurate records of how estate assets are handled and distributed must be maintained. Receipts, bills and bank statements may need to be submitted to the court.

Before probate can close, the executor or administrator submits an accounting, a document outlining the assets, disbursements of estate money to pay bills and proposed distributions to inheritors. If the accounting is approved by all the beneficiaries, a formal approval from the court isn’t required.

An administrator or executor may be held liable for losses if the estate’s assets are lost, if assets are used for personal purposes, there was a conflict of interest in transactions or assets were wasted. A person serving as an administrator or executor should retain legal counsel to avoid these problems and to ensure the estate administration is handled properly.

If the estate is complex enough, it may also be a good idea to retain an accountant’s services. The fees for these services would be paid from the estate, not paid personally by the executor or administrator, with the approval of the court.

Contact one of our seasoned attorneys to discuss your estate planning needs.

New Law Allows Individuals to Create Special Needs Trusts

New-law-allows-individuals-to-create-special-needs-trustsBuried in a new federal law is a tiny change that will now allow individuals to set up their own special needs trusts.

The sum total of the change is two words — “the individual” — intended to correct a more than 20-year-old error. The change is called the Special Needs Trust Fairness Act.

Authorized under the Omnibus Budget Reconciliation Act of 1993, special needs trusts protect assets and allow an individual to maintain eligibility for governmental benefits such as Supplemental Security Income (SSI) and Medicaid.

Prior to the law being enacted, a person with a disability under the age of 65 would, in most cases, have to spend down to reach $2,000 or less in assets before becoming eligible for Medicaid and other governmental benefits. The individual would have to remain at that asset level to continue receiving benefits.

Under the 1993 law, a disabled individual’s assets in a special needs trust are disregarded in evaluating the individual’s assets for the purposes of obtaining government benefits. At death, the state that provided for the person’s care would be repaid out of the assets remaining in the trust.

But here’s the rub. The law allowed parents, grandparents, legal guardians and courts to create such trusts. So what happens to individuals with disabilities who don’t have living parents or grandparents? Previously, their only option was to go to court to have a special needs trust created on their behalf.

Now, under the new law, individuals can create their own special needs trust.

This is a huge relief, because individuals can avoid the extra time and costs incurred from going to court. But it’s still essential to have an attorney draft the trust properly and make sure it’s customized to your needs and those of your loved ones.

If you would like to schedule a consultation, please feel free to contact us at your earliest convenience.

Better Safe Than Sorry: Have Your Will Properly Executed

Better-Safe-than-Sorry-Have-Your-Will-Properly-ExecutedThanks to a lot of hard work and a little luck, you’ve done well financially. Maybe you’ve been able to travel and see the world, and you understand you can’t take it all with you.

By crafting a Will, you can outline what you want to happen with your assets (after your taxes and debts are paid) after you pass on. Without a Will, through the action of state law, your next of kin will receive your assets. If that’s not the outcome you want, having a Will professionally prepared provides you options of whom will receive the assets.

You could create your own Will or find a DYI form online. However, your desire for simplicity and low cost may make things very costly and complex for your estate and beneficiaries.

You “could” do many things on your own:

  • Replace the brakes on your car
  • Re-wire you home’s electrical system
  • Design your next home.

However, chances are you won’t because you lack the expertise. Performing these activities on your own could cause irreparable harm. You want your car to be able to stop; you don’t want your home to burn down, or have crumbling walls. So, you hire someone you trust to do these jobs to save yourself a lot of time and energy while giving yourself peace of mind. You understand the long-term financial risk isn’t worth the short-term financial savings.

The same principle applies with a Will, especially if family relationships aren’t good and there are assets at stake. If a Will is not executed properly, you may be laying the groundwork for the destruction of your estate plans. The more mistakes and errors in a Will, the more likely it will be contested in court.

The cost of defending a Will is billed typically to the estate itself. If a Will challenge is successful, the person who originally disputed the Will may gain control over the estate. Not exactly the desired outcome you would want.

Those who could challenge a Will include those named in the Will and those who would inherit if you died intestate (without a will). Commonly cited grounds include:

  1. The Will lacks the formality required by the state’s Statute of Wills: The testator (the one creating the will) must be at least 18 years old and if the Will is typed or printed, two witnesses must sign it. Verbal or oral Wills aren’t usually valid in New Jersey.
  2. The testator lacked sufficient mental capacity to legally execute a Will:The testator is presumed to have sufficient mental capacity to execute a Will (he or she was of sound mind and competent when the Will was executed). The testator understood the property to be disposed of, those who would naturally be seen as benefiting from the estate, the process of creating the Will and the distributions made in it.
  3. The contents of the Will are a product of undue influence upon the testator by another:Undue influence can be considered mental, moral, or physical efforts being exerted on the testator resulting in a loss of his or her free will so the contents of the Will actually reflect the desires of another person.
  4. The Will is the result of deception or fraud: This would take place if a beneficiary made at least one false statement to the testator, which resulted in the Will being written to benefit the beneficiary due to the false statement.

When a Will is created, it should be done so with potential challenges in mind to make it difficult, if not practically impossible, for a challenge to be successful. If you draft your own Will or just fill in the blanks on a form, you may not be creating safe guards for an effective defense, which will make your estate plans susceptible to a successful challenge.

Contact us today to discuss your estate planning needs.


There Can Be a Happier Ending if You Prepare for It

There-Can-Be-a-Happier-Ending-if-You-Prepare-for-ItAttorneys, in general, and those of us in estate planning in particular, often don’t work with people when life is going great. We often see families whose loved one may be very elderly, dealing with a serious disease or accident, or who have passed away. They are in a situation they hoped they would never be in, dealing with issues they hoped they could avoid. Things didn’t go as planned, but how often does life go according to plan?

As stressful as this situation may be, it provides an attorney an opportunity to do what we really want to do, help people. Regardless of what stage of life you’re in, we can help you either take actions to avoid or reduce future problems or, when needed, help you address your current problems.

The reality is your family will experience challenges at one time or another. The only questions are what those challenges will be, how serious they will be, when they will occur, and mostly importantly, will you be prepared when they happen? For example, if you or your spouse were to suddenly pass away, what may happen to your family, financially?

  1. Do you have life insurance?
  • This is a way to cushion the financial blow that will come with the passing of a spouse.
  • Most families have a primary wage earner and the other spouse may not work outside the home, work part time or work just as much but make less than the other.
  • How much money is needed to replace the decedent’s income or to pay someone for all the services that person does for the family? If you need full time daycare, cooking, cleaning, lawn care, and to replace their lost income for years to come, how much would that add up to?
  • If you have a child, how would a college education be paid? If you have a special needs child, you know how costly it can be to provide the help and services he or she needs. How would these expenses be paid?
  1. What if the two parents pass unexpectedly?

What would happen if both you and your spouse were to pass on or about the same time? This is another reason to have life insurance, covering both parents. If the proceeds are substantial and your children are not old enough or, though older, not mature enough, to handle the money as a contingent beneficiary, you could name their guardian or the trustee of a trust that benefits your children.

These two roles could be fulfilled by one person, two people or you could have a single guardian and more than one trustee (though the more people involved, the more problems may arise). Your estate, through your Will, could also fund this trust.

  1. What if the entire family passes unexpectedly?

It’s very unlikely you and your spouse will pass at the same time and far less likely your entire family will pass simultaneously. If this happens, it will probably be due to an accident and accidents literally do happen. These accidents (such as vehicle accidents or house fires) often occur due to the negligence of one party or another, and negligence can be the basis of a lawsuit. If you’re engaged in estate planning, think about this possibility.

In addition to the assets in your estate and the life insurance proceeds, the executor, the person responsible for your estate, could have money from a settlement or judgement from a legal action against those responsible for the accident. The compensation from these legal actions may be far greater than the value of your estate and your life insurance combined. Where should the money go? Extended family? Friends? A favorite charity? All the above? It’s a very long shot, but because these terrible events happen, you should plan for it.

To schedule a consultation to discuss estate planning and how life insurance may be a part of it, contact us today.

The Power Behind the Power of Attorney

The-Power-behind-the-Power-of-AttorneyThere are many legal documents that could be created by a trust and estate attorney. They’re all meant to help individuals and families get the results they seek. A power of attorney is potentially a very powerful document. It can do a lot of good, but it could also be misused and do a lot of harm if care isn’t taken.

A power of attorney is created by a person (the grantor) who is mentally competent, that allows another person or persons (the agent(s)) to do certain things for him or her or make certain decisions. They normally cover medical or financial issues.

A financial power of attorney allows a grantor to name an agent to make financial decisions and take actions concerning the person’s assets, debts, income and bills. This document can be as narrow or broad as the grantor wants. Financial decisions need to be made by one who is mentally competent. If due to age or disease that competence may be waning, it may be a good idea to have this document executed. If an individual loses competence and does not have a power of attorney in place, a guardian may need to be appointed to oversee their finances, which can take time and be expensive.

It’s critical someone trustworthy and competent in finances be chosen as the agent. You want to select someone comfortable paying bills, who is organized and available (the closer the better, generally). This person must also be trustworthy, especially if it’s a broad power of attorney enabling the person with wide access to assets and funds (a power of attorney could also be very narrow with access to one or two bank accounts to pay certain expenses if you wish). You need to make sure the power you give will be in the right hands.

For example:

  • Bob is retired, widowed with four children and six grandchildren.
  • Incapacitated by a stroke he’s unable to communicate and take care of his affairs.
  • Through a power of attorney Bob designated his oldest daughter to take care of his financial affairs if he was unable to do so. She lives nearby and is good with money. She can sign checks to pay his bills and have access to her father’s financial accounts. This access will allow her to make informed decisions on his behalf. She’s able and willing to communicate Bob’s assets and liabilities with her siblings.
  • Without a power of attorney, if Bob’s children would need to petition the court to have a guardian or conservator named if he lost competence. That person would make all decisions regarding Bob’s finances assets. This will cost the family significant time and money. Bob will have no say in the court’s decisions about who manages his affairs. Potentially family members and others could also dispute who should be the one controlling his finances.

A power of attorney can head off problems when done properly. They can also create problems if done incorrectly or not at all. We can help you make sure the right one is created for you and your family.

If you would like to schedule a consultation, please feel free to contact us at your earliest convenience.

Retirement accounts: Tips for taxpayers turning 70 1/2

Retirement-accounts-Tips-for-taxpayers-turning-70.5It’s a big year for the first set of baby boomers: They’re turning 70 1/2. And that means getting prepared for their first mandatory distributions from tax-sheltered retirement accounts.

The first thing to keep in mind is that the amount of your required annual withdrawal is based on the assets in the account as of the prior December 31. For a taxpayer with multiple 401(k) plans, he or she must take a proportional distribution from each of the accounts. If a taxpayer has multiple IRAs, the payouts can be uneven. That is, the entire amount can be taken out of one IRA, if the taxpayer chooses.

As far as timing, a taxpayer can choose to get periodic payments or take a lump sum, typically later in the year, to defer paying taxes on the withdrawal.

IRA withdrawals are usually in cash, but you can also take them as shares of stock or a piece of real estate. If an IRA owner doesn’t intend to spend the money that’s withdrawn, such in-kind withdrawal options avoid commissions on selling investments and buying them again outside of the IRA. However, this type of withdrawal takes more time and necessitates finding out whether any other fees will be charged.

Keep in mind that federal law allows IRA owners to donate up to $100,000 of IRA assets per year, counting toward the required minimum distribution. The donation must be made to a qualified charity.

If you have any additional questions  or would like to schedule a consultation, please feel free to contact us at your earliest convenience.