Frequently Asked Questions
What is "Probate"?
Probate is the process that courts use to
assist people who cannot make their own personal, health care and financial decisions. These people fall into three general categories: Minor
Children (under age 18 in most states); Incapacitated Adults; and People who have died. Probate proceedings,
in some states, can be expensive and
time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record.
Some people choose to avoid probate in order to save money, spare their heirs a
legal hassle, and keep their personal affairs private. Using a Will in
New Jersey usually results in a simple probate, but in other states the
probate process is more complex.
What is Joint Tenancy With Rights of Survivorship?
(in some states "Tenancy by the Entirety" when between spouses)
This is the most common form of asset ownership between spouses. Joint tenancy (or TBE) has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse
should not add the names of other relatives to their assets. Doing so may subject their assets to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint
tenants. Joint tenancy planning also may result in unnecessary death taxes on the estate of a married couple.
What is a Will?
The document a person signs to provide for the orderly disposition of assets after death. Wills have no legal authority until the willmaker dies and the original
will is delivered to the Probate Court. Still, everyone with minor children needs a will. It is the only way to appoint the new "parent" of an orphaned child. Special testamentary
trust provisions in a will can provide for the management and distribution of assets for your heirs. Additionally, assets can be arranged and coordinated with provisions of the testamentary
trusts to avoid death taxes.
What is a Living Will?
Sometimes called a Health Care Directive, a living will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have
withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself. Oftentimes a living will is executed along with a Durable
Power of Attorney for Health care, which gives someone legal authority to make your health care decisions when you are unable to do so yourself.
We include both in the same document.
What does Intestacy mean?
If you die without even a Will (intestate), the legislature of your state has already determined who will inherit your assets and when they will inherit them. You may not agree with their
plan, but roughly 70 percent of Americans currently use it by not
preparing a Will.
What are Beneficiary Designations?
You may transfer some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate vary from state to state. Some common examples include life insurance death benefits and bank accounts.
What is Durable Powers of Attorney and when do I need one?
These allow you to appoint someone you know and trust to make your financial decisions even when you cannot. If you are incapacitated without these legal documents,
then you and your family will be involved in a probate court proceeding
known as a guardianship. This is the court proceeding where a judge determines who should make these
decisions for you under the ongoing supervision of the court.
What is a Revocable Living Trust?
This is an agreement with three parties: the Trustmakers, the Trust Managers, and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their
trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further "back-up" managers can step in under the
terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the
event of the trustmaker's death. With proper planning, the couple also
can avoid or eliminate death taxes on their estate.
Who Should Have a Revocable Living Trust?
This is an individual decision based upon
many factors that should be discussed with a qualified estate planning