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Wills & Trusts


LoFaro & Reiser assists individuals and couples with their estate planning needs, including simple wills and trusts for estates that are below the minimum level of taxation.

Most relatively simple estates do not require the filing of an estate tax return.  In 2017 the filing of an estate tax return is not required unless the estate's value exceeds $5,490,000. The current New Jersey estate tax exemption is $2,000,000 which became effective for resident decedents dying after January 1, 2017.  That means an individual can leave $2 million to heirs without a state estate tax levy (money left to spouses is always exempt). However, resident decedents dying in New Jersey after January 1, 2018 will not be subject New Jersey estate taxes.

The inheritance tax in New Jersey is alive and kicking though. New Jersey’s inheritance tax is levied on siblings, nieces and nephews–not spouses or children–and the exemption is a measly $500.

Why is it important to have a will? Unless you want the State of New Jersey to determine how your assets are distributed after death, making a will ensures that you get to determine the disposition of your estate and reduces the potential for disputes among your legal heirs. 

  • Select your executor or personal representative to manage your estate.  With a will you select your executor or personal representative, who is the person responsible for managing your estate.
  • Avoid forced sale of your property. By having a will, you may avoid a forced sale of your property, or costly and tedious applications to the courts for the right to sell it. You have greater assurance that your plans will be carried out as you desire.
  • New Jersey's intestacy laws are rigid.  If you die without a will then your estate must be distributed according to New Jersey intestacy laws. These provisions are very general and are not flexible. Moreover, the intestacy laws will direct who shall administer your estate, among whom, and how it shall be divided. If you do not name an executor then your estate most likely will not be distributed as you wish.
  • Caring for your minor children or special needs child.  If you die without a will, then you will lose the right to name a guardian for your minor children, including a special needs child. This is of vital importance, especially if your spouse should not survive you.

 

Since 1997 LoFaro & Reiser has been assisting New Jersey residents with estate planning.  Our law firm believes that everyone should be able to afford to have a will prepared at a reasonable rate.  Need a will?  Complete our online contact form today.  One of our attorneys will respond to your inquiry within 24 hours. 

What are the legal requirements of a valid will?

There are only a few legal requirements that a valid will must satisfy to be deemed valid under New Jersey law:

  • Person must be 18 years old and of sound mind.
  • The will must be in writing, signed by the person (testator) making the will. (A handwritten Last Will & Testament, known as a holographic Last Will & Testament, may be valid if it can be proved that the signature and the important provisions are in the same handwriting, and that the handwriting is the testator’s. This handwritten document must be probated in Superior Court rather than Surrogate’s Court. Consequently, this is a very expensive document to probate which is why a typewritten, formally signed Last Will & Testament, is always preferable).
  • The will must be signed by at least two people over the age of 18.  Your witnesses cannot be your heirs.  

 

New Jersey Trust Attorneys

In addition to assisting individuals with wills, our New Jersey lawyers also counsel clients in connection with preparation of trust agreements.  A properly written trust can be a tremendous tool to help your family and loved ones avoid the many possible complications, problems and costs associated with estate administration and probate in New Jersey.  With a trust, you can avoid having to obtain tax waivers to transfer ownership of assets and property both in New Jersey and other states.  In addition, a trust avoids the need for probate. This is a definite advantage in New Jersey and other states.

What are the minimal requirements of a trust in New Jersey?  

New Jersey law requires that a trust be a written document. The trust must also appoint a trustee.  For a trust to function, it needs to be funded with cash or other property of value.

Basic Concept of a Trust

In general, a trust is an arrangement whereby one person agrees to hold property for the benefit of another. All trusts must have the same basic components:

A Grantor. The person who creates the trust. The grantor may also be called the "donor," or the "settlor," or the "trustor." All these terms are used interchangeably.

A Trustee. A person or entity must agree to hold money and/or property for the benefit of someone else. There may be more than one trustee and the trustee does not need to be a person. It may be a corporation with trust powers, such as a bank.

A Principal. Something, money and/or property, must be held by the trustee for the benefit of someone else. Also, it may be called the "corpus" of the trust or “res".

A Beneficiary. The person who benefits from the trust. There may be more than one beneficiary.

Classification of Trust

All trusts do not contain the same property, nor do they have the same purpose, nor are they all created in the same manner. These differences distinguish one type of trust from another.

Living vs. Testamentary Trusts. Ask whether the trust becomes effective during the Grantor’s lifetime or only after the Grantor’s death.

A living trust is a trust that becomes effective during the Grantor’s lifetime. Also called and “inter-vivos trust," Latin for during life, most living trusts are generally created by a written instrument.

If the trust is created through a Last Will and Testament, it is called a testamentary trust. This trust only becomes effective after the Grantor’s death because the Last Will and Testament does not become effective until the Grantor’s death.

Revocable vs. Irrevocable Trusts. If the Grantor reserves the right to revoke the trust after it becomes effective, including the right to change any of the terms or provisions of the trust, then the trust is a revocable trust. If the Grantor gives up the right to revoke the trust after it becomes effective, including the right to change any of the terms or provisions of the trust, then the trust is an irrevocable trust. Please note that testamentary trusts are always revocable. Only living trusts can be either revocable or irrevocable.

The Grantor of a revocable trust can still has control over the property put into the trust. Also, the Grantor can change the terms and conditions. The Grantor retains all incidents of ownership, thus the Grantor is treated as the owner for property tax purposes.

The Grantor of an irrevocable trust is giving up all rights to the property put into the trust. The Grantor has no right to amend, revoke, terminate or change the conditions of the trust. The Beneficiary, not the Grantor, is treated as the owner of the property for tax purposes. A person may use an irrevocable trust to protect their assets from creditors, to become eligible for Medicaid, and to avoid estate taxes.

Need consultation about a trust?  Contact our New Jersey trust attorneys today.

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