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Articles Tagged with “last will and testament”

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The short answer is yes. Your will ensures that:
• your assets are given to those whom you want to receive them;
• you can control the way in the which your assets are distributed (for example, establishing a trust for the protection of a beneficiary, and designating the trustees);
• the guardians you choose will be entrusted with raising your children;
• your estate will be administered by someone you trust;
• your estate will not be reduced by the cost of an administration bond; and • estate taxes are minimized.

In your will, you choose who will receive your assets (beneficiaries) and what they will receive (bequests). If you do not have a will, your estate will pass through the laws of intestacy. Many people believe the laws of intestacy will align with their wishes for distribution of their estate. However, many times that is not the case. For example, if you are married, have no children, and do not have a will, people assume that the surviving spouse will inherit the entire estate. However, under New Jersey intestacy law , your surviving spouse is entitled to the first twenty five percent of your estate (not less than $50,000 nor more than $200,000) and seventy five percent of the remaining portion. The balance will go to your parents. So, for example, if you have a $1,000,000 estate your surviving spouse will receive a total of $800,000 and your parents would receive $200,000. In another example of unintended consequences in intestacy, if you have no living relatives and no will, your entire estate will be given to the State of New Jersey. There are many other scenarios under the laws of intestacy which would distribute your property in ways that you may not intend. Having a will ensures that your estate is distributed to people or charities that you have chosen.

Without a will, your assets are distributed under the laws of intestacy directly to the people designated by New Jersey law. In some circumstances, it may be wise to put the money in a trust for some of your beneficiaries so that you can direct when and for what purposes the money will be distributed. This is particularly useful if there are potential beneficiaries with special needs whose governmental benefits need to be protected.

A will designates your children’s guardians – a will is the only way to appoint guardians. This is an important choice. You should discuss this choice with the people you choose beforehand because you will be placing a great responsibility upon them.

You will also select executors and trustees. Executors are responsible for probating your will, paying expenses, and collecting and distributing the assets to the beneficiaries. Trustees manage assets placed in trust for designated beneficiaries. By New Jersey law, if there is no will, or a will that does not waive the bond, fiduciaries (such as executors and trustees) must post a bond with the surrogate’s court. The cost of the bond varies with the value of the estate’s assets, and can become very costly. To ensure that your assets are not diminished by the bonding requirement, you can waive it in your will.
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An estate plan carries out a person’s wishes at the time of their death and appoints people to make decisions during life.

An estate plan commonly consists of three main documents:
• Last will and testament
• Durable power of attorney • Living will and health care proxy (medical power of attorney)

Last Will and Testament. The fundamental document is the last will and testament. The will takes effect upon death. The will must meet the formal requirements under New Jersey law in order to be effective in New Jersey
The will designates people and their roles:
• Beneficiaries – recipients of the decedent’s assets;
• Executors – the persons who will probate the Will, collect the estate assets
and distribute the estate assets to the beneficiaries;
• Trustees – the persons who will manage the assets placed in a Trust usually
for the benefit of either the surviving spouse or the children or both;
• Guardians – the persons who will care for minor children until they reach the
age of majority (which is age 18 in New Jersey).

Durable Power of Attorney. The power of attorney is in effect when a person is alive; it becomes effective when it is signed. When a power of attorney is “durable”, it remains in effect even if the person is incapacitated. The durable power of attorney authorizes the people selected to handle your financial matters. Common tasks include banking, including writing checks and paying bills, real estate, trading investments, communicating with social security, pension benefits departments, Medicaid/Medicare, and the IRS, hiring accountants, attorneys, and financial advisors, and any other related financial need.
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