Wills and Estate Planning for Lawyers
By Kenneth Vercammen, Esq.
Lawyers work on an average more than
80,000 hours in a lifetime. In spite of all our resources and the assets we
earn during our lifetime, the vast majority of Attorneys do not take the time
to create the legal instructions to guide the court or a guardian. National
statistics indicate that more than 50% of Americans die without leaving a Will. In the absence of a Will or other legal
arrangement to distribute property at death, often a mess occurs. Many
attorneys experienced in Criminal and Civil Litigation have never prepared a
Will for clients, let alone for themselves.
The result of no Will can be lengthy
delays in the distribution of your estate, additional unneccesary cost for a
bond, court battles between relatives and your children being raised by someone
you do not favor.
Where there’s No
Will …
Your
assets go to whoever a state law says receives the assets, or to the government
itself! A Will should be a statement to
the things you truly care about: your spouse, your children, your parents, your
friends, and your charities.
If
you leave no Will or your Will is declared invalid because it was improperly
prepared or is not admissible to probate:
1. People you dislike or people
who dislike and ignore you may get your assets.
2. State law
determines who gets assets, not you.
3. Additional
expenses will be incurred and extra work will be required to qualify an
administrator-Surety Bond, additional costs and legal fees.
4. You lose the
opportunity to try to reduce Estate Tax, State inheritance taxes and Federal
estate taxes.
5. A Judge
determines who gets custody of children. A greedy brother or crazy mother in
law could ask the court for custody.
6. If you have
no spouse or close relatives the State may take your property.
7. The
procedure to distribute assets becomes more complicated.
8. It probably will cause fights and lawsuits
within your family.
When
loved ones are grieving and dealing with death, they shouldn’t be overwhelmed
with Financial concerns. A Will must not only be prepared within the legal
requirements of the state Statutes but should also be prepared so it leaves no
questions regarding your intentions.
Think-
Who don’t you want to receive your assets? Without a Will, they could receive your assets
and request custody of children.
Many Attorneys are not comfortable preparing their own
Wills. Therefore, you may wish to do the following:
1) Have an Estate Planning attorney prepare a
Will to distribute your assets to the people you care the most about. If you
already have a Will, prepare a new Will and have the old Will revoked. ( Your
estate planning attorney will explain this to you.)
2) Prepare a Power of Attorney to select someone
to handle your finances if you become disabled.
Have your old power of attorney revoked.
3) Prepare a Living Will prepared
4) Change your beneficiary on assets you may
own, such as stocks, bank accounts, IRA, and other financial assets. Change
your beneficiary under your own life insurance, whether whole life insurance or term insurance.
5) Contact your human resources person and
change the beneficiary on life insurance, pension, stock options or other
employee benefits. Note that your spouse must sign a written waiver permitting
you to change beneficiaries.
6) Keep your personal papers at a location
where family can find them.
7) Have your attorney prepare a prenuptial
agreement if you decide to get re-married.
8) Make sure the trustee for any funds
designated for your children is the "right" trustee.
9) In New Jersey, if you are married and living with your spouse, under certain
instances the surviving spouse has a right to "elect against the Will."
The disinherited spouse may like to elect against the Will and try to obtain
one third of the estate. Your attorney can explain how you can protect yourself
and your children.
10) If you have minor
children, nominate someone under a Will to serve as guardian to the children.
Although the surviving parent obviously has first right of custody of children,
they may not even want custody.
SAVE MONEY- Have
your attorney prepare a self- proving Will with a No bond clause
Who
is not the best choice to raise your children, or safeguard your children's
money for college? Do you want
children, or grandchildren, to get money when they turn 18? Will they invest money wisely, or go to
Seaside and play games?
Life Insurance
Sometimes it is not wise to leave children as
a beneficiary of life insurance and your pension if your children are under the
age of 21. You could make your estate the beneficiary of life insurance, and
pension, then direct in your Will that the money be used to provide support and
college expense for children.
Minor
Children & Grandchildren
For example, the Will could provide
that any portion of my residuary estate which becomes distributable to a
beneficiary under the age of twenty-one (21) years shall be held as a separate
trust by my Executor until such beneficiary attains the age of twenty-one (21)
years. My Executor shall apply such amounts of income and principal as he, in
his sole discretion, deems proper for the health, maintenance, education,
welfare, or support of such beneficiary and shall accumulate any unexpended
income not needed for the above purposes, paying and transferring the portion
held in trust to the beneficiary upon his or her attaining the age of
twenty-one (21) years. Prior to his or
her attaining the age of twenty-one (21) years, my Executor may apply such
income or principal for benefit of such beneficiary directly or by payment to
the person with whom such beneficiary resides or who has the care or control of
such beneficiary without the intervention of a guardian. My Executor shall not be obligated to supervise
or inquire into the application of such amounts by such person, and the receipt
of such person shall be a complete release of my Trustee.
THE FOLLOWING IS
A SAMPLE OF A VARIETY OF CLAUSES AND ITEMS WHICH KENNETH VERCAMMEN’S LAW OFFICE OFTEN INCLUDES
IN A WILL
1ST: DEBTS AND TAXES
2ND: SPECIFIC BEQUESTS
3RD: DISPOSITION TO SPOUSE
4TH:
DISPOSITION OF REMAINDER OF ESTATE
5TH: CREATION
OF TRUSTS FOR SPOUSE
6TH: CREATION
OF TRUST FOR CHILDREN
7TH: OTHER
BENEFICIARIES UNDER 21
8TH: EXECUTORS
9TH: TRUSTEES
10TH: GUARDIANS
11TH: SURETY OR
BOND
12TH: POWERS
13TH: AFTERBORN
CHILDREN
14TH: PRINCIPAL
AND INCOME
15TH: NO
ASSIGNMENT OF BEQUESTS
16TH: GENDER
17TH:
CONSTRUCTION OF WILL
18TH: NO CONTEST CLAUSE
WHY PERIODIC REVIEW IS ESSENTIAL
Even
if you have an existing Will, there are many events that occur which may
necessitate changes in your Will. Some
of these are:
* Marriage, death, birth,
divorce or separation affecting either you or
anyone named in your Will
* Significant changes in the
value of your total assets or in any particular assets which you own
* A change in your domicile
* Death or incapacity of a
beneficiary, or death, incapacity or change in residence of a named executor,
trustee or guardian of infants, or of one of the witnesses to the execution of
the Will
* Annual changes in tax law
* Changes in who you like
MAY I CHANGE MY
CURRENT WILL?
Yes. A Will may be modified, added to, or entirely
changed at any time before your death provided you are mentally and physically
competent and desire to change your Will.
You should consider revising your Will whenever there are changes in the
size of your estate. For example, when your children are young, you may think
it best to have a trust for them so they do not come into absolute ownership
of property until they are mature. Beware, if you draw lines through items,
erase or write over, or add notations to the original Will, it can be destroyed
as a legal document. Either a new Will
should be legally prepared or a codicil signed to legally change portions of the Will.
A portion of your Will and Estate
Planning can be deducted on your income tax return when it deals with tax
planning. Thus, part of the fee is tax deductible for income tax purposes.
Under the law in New Jersey, if a person dies without a Will
and without children, their spouse will inherit all assets, even if they are
separated from the spouse. In addition,
if you have children from a previous marriage, but no Will, your separated
spouse will get half your estate.
Your estate will be subject to probate
whether or not you have a Will and in most cases, a Will reduces the cost by
eliminating the requirements of a bond.
With a well-drawn Will, you may also reduce death taxes and other expenses. Don’t pinch pennies now to the detriment
of your beneficiaries
Estate Planning is the process of
examining what will happen to your property when you die and arranging for its
distribution in such a manner as will accomplish your objectives.
The cost of a Will depends on the size
and the complexity of the estate and the plans of the person who makes the
Will.
Be sure your Will takes into account the
2017 Estate Tax law changes and the separate Inheritance Tax. Also, ascertain
if your Will is “self-proving”, which would dispense with having to find the
Will’s witnesses after death.
OTHER
DOCUMENTS TO BE PREPARED BY YOUR ATTORNEY
-Power of
Attorney- to allow a trusted person to
administer your assets during your lifetime, either upon disability or
now
-Living Wills- to
state your wishes concerning medical
care in the event of your serious illness
-Trusts (and
Medicaid Trusts)
CONCLUSION
Planning can only be done if someone is competent and/or
alive. Make sure your assets can be passed directly to your loved ones. Kenneth A. Vercammen is a Middlesex County trial
attorney who has published 125 articles in national and New Jersey publications
on litigation topics. He has been
selected to lecture to trial lawyers by the American Bar Association, New
Jersey State Bar Association and Middlesex County Bar Association.
Call
our office to schedule a confidential appointment 732-572-0500
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com
