New Jersey Estate Planning Lawyers
Estate Attorneys in Bergen County, NJ Help Clients Plan for Their Long-Term Well-Being and Financial Security in Passaic County, Essex County, and Throughout New York, including Queens County, Nassau County, and NYC
When you have worked hard throughout your life to build assets and wealth, you will likely want to pass them on to your loved ones as efficiently as possible after you are gone. Our New Jersey estate planning lawyers can walk you through the process of estate planning and help you create a custom legal plan to protect your and your family’s wealth and carry out your wishes for your assets and personal affairs.
Since 2005, the Choi Law Firm has offered experienced legal advice to clients as they plan for their families and their future. No matter how complex your financial situation may be, we have the experience and resources to help you develop an effective estate plan. If you have questions about your trust and estate planning options, contact us for an initial consultation. Our estate planning law firm can help you protect your hard work and the assets and wealth that you have built throughout your life.
Table of Contents
- What Is an Estate Plan?
- Important Documents in an Effective Estate Plan
- More on the Last Will and Testament
- Revocable Living Trust
- More on the Different Types of Power of Attorney
- Fiduciaries Explained
- Assets – Probate vs. Non-Probate
- Estate, Gift, And Income Tax
- How the New Jersey Estate Planning Lawyers at the Choi Law Firm Can Help Preserve Your Family’s Wealth for Future Generations
- Contact Our New Jersey Estate Planning Lawyers Today for an Initial Consultation to Discuss Your Legal Options
- Frequently Asked Questions About Estate Planning in New Jersey
What Is an Estate Plan?
An estate plan is a group of legal documents that allow you to establish your wishes and intentions for how your assets are to be managed and distributed, as well as to establish instructions for your personal, medical, and financial care in the event you become incapacitated, or instructions for your end-of-life care. In addition, to ensure that your family members and loved ones understand your wishes for your care and are empowered to enact your wishes, an estate plan can also help you effectively pass on your wealth during your lifetime and after your death while minimizing time spent and financial costs as well as minimizing the loss of your wealth through tax liability.
Estate planning is about ensuring that you, or someone you trust, make the right decisions relating to your finances, healthcare, and family. Planning is all-encompassing and gives you peace of mind in knowing that when you are no longer able, all of your hard-earned assets will be placed in the best hands, and your goals and interests for your family will be fulfilled. Nearly everyone should have an estate plan of some sort.
The consequences of not planning are very significant. For example, if you die in New Jersey without an estate plan, then your assets might be distributed under intestate succession, where New Jersey determines who gets your assets. This could be a nightmare, as your property could go to the wrong people – or the right people at the wrong time. Estate planning also prepares you if you are alive but disabled or unable to efficiently and reasonably manage your affairs. The primary estate planning documents include a will, living trust, and power of attorney, and they are explained below.
Read on to learn more about estate planning, including how the skilled estate attorneys in Bergen County, NJ at the Choi Law Firm can set up your estate plan to meet your or your loved one’s needs.
Important Documents in an Effective Estate Plan
While the specific documents and legal structures you may need for your estate plan will depend on your individual circumstances, many people who draw up an estate plan will utilize legal tools such as:
- Last will and testament – A will is usually the centerpiece of any estate plan. In a will, you nominate someone to serve as the executor of your estate and wind up your affairs. Your will can also pass on the assets you owned at your death to family members, friends, or charitable organizations. You can also nominate someone to serve as a guardian for your minor child or children in the event that both you and your child’s or children’s other parent have died.
- Living will – A living will can allow you to put your wishes for your end-of-life and post-death, including end-of-life treatment decisions as well as your preferred funeral and burial arrangements so that your family is not left wondering what you would have preferred.
- Advance medical directive/healthcare power-of-attorney – As an alternative or supplement to a living will, an advance medical directive and healthcare power of attorney can provide more detailed instructions about what healthcare decisions you want to be made in the event you become incapacitated and nominate someone to formally communicate those decisions to your healthcare providers.
- Trusts – Trusts are a legal structure in which property is held by a party known as a trustee on behalf of one or more persons or entities called beneficiaries. Trusts are often another key piece in estate planning, potentially allowing you to pass on your wealth to loved ones without the need for probate or estate taxes while still allowing you to use and access your assets during your lifetime.
- Durable power of attorney – A durable power of attorney allows you to appoint someone to handle your personal, legal, and financial affairs if you become unable to do so because of physical or mental incapacitation.
- Beneficiary or transfer/pay-on-death designations – If you have life insurance policies, pensions, or other retirement accounts or benefits, you may be able to pass those assets to specific parties by making a beneficiary, TOD, or POD designation on your account.
- Joint tenancies – Titled assets such as real estate can be passed on without the need for probate by holding the property in a joint tenancy or tenancy by the entirety, which enables your co-owners to assume ownership of your interest in the property.
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More on the Last Will and Testament
A will is a legal document that expresses your intention concerning the distribution of your assets after your death. New Jersey law dictates who may execute a will in New Jersey. To simply have a will, you must be 18 years old and of sound mind. Basically, a “sound mind” means understanding what you are doing and to whom you are giving your assets upon your death.
For a will to be valid, it must name an executor or co-executors. Additionally, the will must name beneficiaries, which normally include family members and dear friends but may also include schools, organizations, and your favorite charities. Experts recommend that a successor executor be named if the primary executor is not capable or refuses to perform their duties as executor. In New Jersey, an executor may receive just compensation for their duties as executor as they can be time-consuming depending on the type and amount of assets.
If you have minor children, the will should name a guardian for your children and name someone to handle the children’s money until they reach a designated age for distribution. The guardian and financial individual do not have to be the same person. You can name a qualified bank as the “person” to handle the children’s money as you designate. A will could specify how you should use the money for your children, such as for their health, education, and well-being.
If there is a living trust, a will typically leaves the assets to the trust, and the trust contains the provisions for distribution. This type of will is known as a “pour-over will” because it rolls non-trust assets into the trust.
Revocable Living Trust
A revocable living trust provides for the effective management and distribution of your assets at your incapacity or death, and it is a popular estate planning tool for avoiding probate. You establish a revocable living trust during your lifetime. Your assets are held in the trust and managed by the trustee, someone with a legal responsibility to follow the trust terms. You could be the trustee of your revocable living trust, giving you full power and control and giving someone else (a successor trustee) control when you are no longer able or are deceased.
A trust is similar to a will in that it contains instructions on the distribution of your assets. However, a will covers assets owned by you in your own name (not a trust) at your death, while a trust covers only those assets that are in the trust. An experienced attorney will ensure that all of the appropriate assets are retitled to the revocable living trust during your lifetime to ensure that your trust is valid and funded and that the trust avoids probate. It makes sense to use a pour-over will in addition to a revocable living trust in case any of your assets were not transferred into the trust before your death.
More on the Different Types of Power of Attorney
There are two types of power of attorney used as estate planning tools to ensure your finances and healthcare decisions are taken care of within your best interest if you are incapacitated or simply unable to reasonably and efficiently manage your affairs.
Medical Power Of Attorney
A medical power of attorney names an individual to make medical decisions on your behalf if you are incapable of doing so. Within the medical power of attorney document, you may provide as many or as few directives as you wish to ensure that your wishes are upheld if you are disabled or incapacitated.
Property Power Of Attorney
A property power of attorney ensures that your financial assets are well taken care of if you are no longer able to manage them. The property power of attorney may name an individual or a qualified bank to act on your behalf once you cannot manage your affairs anymore. All power of attorney documents terminate upon your death.
Four fiduciaries need to be considered when doing estate planning—an executor, a trustee, a health care representative, and an agent under a property power of attorney. Usually, fiduciaries are trusted family members, friends, qualified banks, or even law firms.
Health Care Representative
The health care representative will make all medical decisions once the principal cannot do so anymore. These decisions can be end-of-life decisions or simply long-term care medical decisions. In some situations, the healthcare representative will make non-life-threatening medical decisions simply because the principal is unconscious and unable to voice an opinion on a doctor’s recommended course of action. It is the health care representative’s job to act in the principal’s best interest by acting how the principal would act if the principal was making the decision, in line with the directives laid out in the medical power of attorney.
Agent Under A Property Power Of Attorney
An agent under the property power of attorney makes financial decisions and engages in financial transactions on behalf of the principal. The property power of attorney document provides the authority for the agent to act on the principal’s behalf in different financial situations.
Once the principal passes away, the representative and agent no longer have the authority to act on the principal’s behalf. Instead, that authority moves to the executor and trustee.
An executor’s job is to have the will probated, gather all assets not named in a trust, pay any outstanding bills or debt, file any tax returns that may be required, render an accounting to beneficiaries, and distribute the assets following the will. Unlike a trustee, the executor does not need to maintain investments or anything. Instead, liquidate everything unless specified otherwise and distributed.
A trustee’s job is similar to that of an executor. But a trustee’s job is typically more involved and may last a great deal longer because they are to maintain the trust until it is distributed according to the trust document’s terms. For example, suppose the trust provides that assets can’t be allocated until the beneficiary reaches the age of 25, and the heir is only 19. In this case, the trustee must maintain the trust account for at least six years.
Courts give trustees a lot of authority to act in the best interest of the beneficiaries following the terms of the trust document, so New Jersey law provides that the trustee must perform the following duties:
- Duty to administer the trust
- Duty of loyalty
- Duty of impartiality
- Duty of prudent administration
- Duty to use special skills
- Duty to enforce and defend claims
- Duty to collect trust property and remedy breaches of trust, and
- Duty to disclose and discretion to periodically report.
Assets – Probate vs. Non-Probate
When preparing your estate plan, it is crucial to make a list of all of your assets and categorize them, with the help of an attorney, into probate and non-probate assets. A probate asset is anything owned individually in your name. A non-probate asset is anything held in a trust, owned jointly, life insurance policy, retirement accounts, annuities, payable on death accounts, and transfer on death accounts. Anything owned jointly will automatically pass to the other owners upon your death. For example, if you own a house with your spouse and you pass away, the house automatically becomes your spouse’s home solely. Therefore, it is imperative to understand this distinction and coordinate non-probate assets and beneficiary designations with the distribution provisions in your estate planning documents.
Estate, Gift, And Income Tax
Estate planning is also essential for tax purposes. As of 2021, the federal estate tax exemption is $11.7 million, meaning any assets under the exemption limit will not be subject to federal tax. However, there is also a state-by-state inheritance tax. For example, in New Jersey, the inheritance tax ranges from 11-16 percent for anything over $500 distributed to extended family and unrelated beneficiaries. Therefore, if you are giving money to people other than your spouse, parents, children, and grandchildren, it may be beneficial to keep large inheritances in trust documents to be used to pay bills or distribute as necessary.
How the New Jersey Estate Planning Lawyers at the Choi Law Firm Can Help Preserve Your Family’s Wealth for Future Generations
Whether you’re planning the parameters of your future medical care or establishing support for loved ones upon your death, the estate attorneys in Bergen County, NJ at the Choi Law Firm can help with all aspects of your estate plan, including:
- Advance directives (living wills)
- Estate tax issues
- Choosing the appropriate executor
- Guardianships and conservatorships
- Living trusts
- Wills drafting
Documents for estate planning are very flexible and can be made to fit your needs. The Choi Law Firm works closely with you to figure out your goals and make sure you have the right tools to reach them.
Get Advice From An Experienced Estate Planning Attorney Serving Clients In New Jersey And New York. All You Have To Do Is Call 201-613-5557 To Receive Your Confidential Case Evaluation.
Securing Your Legacy
You’ve worked hard for your family, so knowing that you have plans for their long-term well-being and financial security can bring you great comfort. We carefully look at your estate and figure out the best way to transfer your assets, pay the least amount of taxes, choose a guardian for your children, take care of your pets, give to your favorite charities, and protect your loved ones.
Draft Your Advance Directive and Last Will and Testament
A will is essential at every stage of your life. Your advance directive (or living will) sets the parameters for medical intervention should you become incapacitated. This assures that when you are most vulnerable, your wishes will be honored.
Your last will provides the opportunity to distribute your property, establish care for your children and otherwise express your wishes upon your death. A will is necessary if you intend to leave property to a person or entity other than a blood relative, such as a domestic partner, a friend or a charity. If you die without a will, the court determines how your property is distributed, who cares for your children and even what happens to your pet – making decisions that might not reflect your desires.
We can draft valid wills that ensure your intentions are honored.
Changing Your Will
As your life changes, so might your estate plan. You should update your will periodically throughout your life. Our New Jersey estate planning attorneys write valid codicils that take into account changes in your finances, marital status, number of children, philanthropic interests, and other lifestyle choices.
Appointment of Guardians
If you have minor children, your will allows you to make decisions about their future care. Naming a guardian is especially important if you are a single parent, but even married couples must consider the remote possibility of perishing in a common incident. If you do not name a guardian, the court will appoint one whose decisions may be in conflict with your parenting goals. You can also make arrangements for your pets’ care in your will, even naming a guardian to assume ownership.
Contact Our New Jersey Estate Planning Lawyers Today for an Initial Consultation to Discuss Your Legal Options
If you are an adult without an estate plan, it is time to contact an attorney and get prepared because you never know what life may throw at you. It is vital to be prepared, not only for yourself but also for your family, no matter what happens. Contact the experienced New Jersey estate planning attorneys at the Choi Law Firm by calling 201-613-5557 or contacting us online for a confidential consultation.
Our estate planning law firm works with clients to protect their assets and help them provide for their loved ones in Bergen County, Passaic County, Queens County, Nassau County, and throughout North Jersey and NYC. Contact the Choi Law Firm today for a confidential case evaluation to see how we can assist you during your estate planning process.
Frequently Asked Questions About Estate Planning in New Jersey
While there are resources out there that are designed to allow people to craft an estate plan without the assistance of an attorney, having an experienced lawyer guide you through the estate planning process can give you peace of mind that your and your family’s interests are fully protected. An attorney can advise you about your estate planning options and help you to select specific tools that will best help you achieve your goals. An attorney can also make sure that your estate planning documents are enforceable and cover all the bases so that if the unthinkable happens, no aspect of your affairs is unaddressed by your estate plan.
While it is always a good idea to review your estate plan regularly every few years, you should also sit down with a trust and estate attorney in NJ to review your plan after major life events, including changing your residency to another state, getting married or divorced, having kids or grandkids, purchasing property or other titled assets, experiencing a substantial increase or decrease in your income, or coming into a significant sum of money like lottery winnings or an inheritance.
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Sandra Choi is attentive, kind, thoughtful, and professional. She was thorough and well-prepared throughout my case, and I was impressed by her honesty and work ethic. Ms. Choi and her team were helpful and responsive to my questions and concerns, and she certainly exceeded my expectations. I highly recommend Ms. Choi and her team.