Wills

1. What is a will?

A will is a document, executed in accordance with state law, which directs how some or all of your property is distributed at your death. An executor is designated under your will who assembles the assets of your estate and pays debts and taxes. If you have a child who is a minor, a guardian should be appointed under the will who would serve if you and your spouse die before the child reaches the age of majority.

2. When must a trustee be designated under my will?

A trust is a separate entity that may be established under your will when appropriate. If a trust arrangement is part of your will, a trustee is to be designated to manage and distribute the trust funds. The trustee is directed to distribute the funds held by the trust to or on behalf of the beneficiary of a trust.

3. Do all of my assets pass under my will?

Property in your name alone passes under your will. Such assets are known as probate property. Typical examples are bank accounts, stock certificates and personal property, such as jewelry and motor vehicles. Assets that are not governed by your will are known as non-probate property. Assets held jointly, IRA accounts, of non-probate property. Joint property passes to the survivor and IRA accounts, retirement benefits and life insurance are distributed in accordance with the beneficiary designation.

4. What is the role of non-probate assets in planning my estate?

The goal in estate planning is to coordinate the disposition of non-probate assets with the plan for probate assets. For example, if you desire a trust for your spouse under your will, consideration should be given to designating the trustee of this trust as beneficiary of your insurance policies. In this manner, a non-probate asset such as insurance will pass as part of the overall estate plan.

5. How is my estate distributed if I die without a will?

The disposition of your assets if you do not have a will is governed by state intestacy law, which may not be in accordance with your intent. Administration of an intestate estate generally requires additional time and expense. Non-probate assets such as joint property, IRA accounts, retirement benefits and life insurance are not governed by the intestacy laws.

6. Must my spouse receive any part of my estate?

In New Jersey, if one dies while married, a spouse generally cannot be disinherited. The surviving spouse is entitled to receive a share of your estate equal to approximately one-third of your probate assets with certain adjustments. With the advice of an attorney, you can limit the amount your spouse inherits and also restrict such inheritance to certain assets.

7. When should I consider a new will?

Separation or divorce are situations that give rise to consideration of a new will. Other such situations are death of one or more major beneficiaries, a change in your financial situation or a change in probate or death tax law. In addition, special will provisions are required in the event a beneficiary under your will is disabled, such as a physical disability or a mental illness.

8. Must an attorney be consulted to prepare my will?

The need for a will or the appropriate time to change a will involves legal questions that should be resolved after discussing the situation with your attorney. Moreover, the requirements for the validity of a will and the terms of your will are matters that require the advice of an attorney. While you can prepare your own will, this may be imprudent, as an improperly prepared will can give rise to many problems, such as invalidity of the will and court costs for your estate.

9. How can I make sure my wishes for my funeral are carried out?

Making arrangements ahead of time for your own funeral can assure you that your wishes will be carried out. These arrangements should be made with your family and local funeral director, and not put in your will. In most cases, wills are not read until the deceased has already been buried, so making plans with the funeral director and letting your family know which funeral home has your instructions is advisable.

In New Jersey, you can set up a burial fund to help pay for your funeral. The arrangements are made with a funeral director, but this money is kept by the state of New Jersey in an interest-bearing account. This means that if you decide to change funeral directors, you can do so without any problems. You can also withdraw the money if you change your mind or need it for something else. People preparing for Medicaid or SSI eligibility can also set up a funeral fund. The money deposited and the interest it accumulates will not be counted as an asset by either Medicaid or SSI. However, the fund for those on Medicaid or SSI is irrevocable, that is, once you go on Medicaid or SSI, you can change funeral homes, but you cannot withdraw the money from the fund. It can only be withdrawn at the time of your funeral.