Wills

last-willBeing designated by a friend or a loved one as the Executor of his or her estate is an honor, but with that designation comes many responsibilities and legal risks.

The Executor’s work begins after the death of the testator (the person who made the Will).  The Executor is responsible for “settling” the estate which means that the Executor must:

  •  identify, gather and value all of the decedent’s assets;
  •  pay the decedent’s debts and expenses, including all federal and state taxes; and
  •  distribute to the correct beneficiaries whatever assets remain after all debts and expenses have been paid, in accordance with the terms of the Will.

While this short list makes the Executor’s job seem simple, the reality is that there are many difficult tasks involved in the process and the Executor, as a fiduciary, can be held personally liable for breaching his or her duties in administering the estate.

Before accepting the appointment as Executor you should educate yourself as to the responsibilities and carefully access whether you are able to perform the tasks required.   The Executor may hire professionals such as accountants, attorneys, appraisers and others to assist in the administration of the estate.

The article The other side of a will: Serving as executor to an estate by Shelly Schwartz, CNBC, October 3, 2015 provides a helpful discussion.

Getting Legal Help

Experienced Estate Planning and Probate Attorney, Elga A Goodman, can assist you in your role as an Executor. Contact us today at 973-841-5111.

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Preparing a Will enables you to direct how and to whom your estate will be distributed once you’re gone.  Your estate is comprised of your 

  1. intangible personal property (including cash, IRA’s, 401Ks, bank accounts, insurance policies, etc.),
  2. real estate, and 
  3. “tangible personal property.” 

Many times people wish to be very specific regarding how their tangible personal property will be distributed among beneficiaries.  One option is to itemize such specific bequests in a Will.  Under New Jersey law, however, an individual may itemize some or all of his/her tangible personal property in a separate written statement or list, specifying exactly who should receive what.  This list may be revised by the testator (the person bequeathing his/her estate) as often as desired during his/her lifetime, and does not require an attorney, witnesses, or notarization.  So for example, while a parent may state in her Will that her estate should be equally divided between her two children, she may attach a statement specifying that

– the gold watch goes to her daughter and the stamp collection goes to her son.

or

– her pearls go to her favorite niece, Alice.

The term tangible personal property is generally understood to mean items that can be felt or touched.  Typical items include clothing, jewelry, art, musical instruments, writings, furnishings and other household goods.  Often, these items are of relatively little monetary value, but of great sentimental worth.  It is important to remember that if you are preparing a separate statement or list, it may only serve to distribute tangible personal property, not cash, securities, negotiable interests or services.

Sometimes, however, it isn’t clear whether or not an item falls under the definition of tangible personal property.   For example, is a collection of gold Krugerrand coins considered cash or tangible person property?  These coins are minted by the Republic of South Africa, and each coin contains exactly one ounce of gold.  Given the potential for error, it’s best to consult with an attorney.  If it’s determined to be cash, then the collection should be bequeathed through the Will, which you must sign along with two witnesses, and which must be notarized.  If it’s deemed to be tangible personal property, then you can just gift it via a separate list, without the need for witnesses or a notary.  And, you can change your mind about who will receive the coins as often as you like.  Just redo the list.

When doing your estate planning, you want to feel confident that the items you bequeath to specific people on a separate list are, in fact, tangible personal property.  You don’t want your bequests to result in disputes among your heirs or in court proceedings because the items were not gifted in a legally correct manner.  

Getting Legal Help:

Experienced Estate Planning Attorney, Elga A. Goodman, can help you with all your estate planning needs.  Contact us today at 973-841-5111.

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A critical part of estate planning involves identifying your beneficiaries, and specifying what they will inherit.  Parents (particularly those who are widowed or divorced) often designate their children as beneficiaries.  However, problems may arise among the kids depending on how those assets are divided.  Examples abound, but here are just a few:

You have three children, and you specify that

A.  50 % of your estate will go to your unmarried daughter.  The remaining 50% will be equally divided between your two married sons.

B.  your son, who received $200,000 from you to start a business, will inherit $200,000  less than each of the other two children.

C.  your two oldest children will receive their inheritances outright.  However, your youngest child’s inheritance will be held in Trust, with your oldest child serving as Trustee.

You have your reasons for what you’re doing.  But, if you don’t share those reasons with your kids, later on there may be hard feelings and misunderstandings about your intent.   Once you’re gone, your kids are left to interpret your Will without your input.  And  that may lead to major problems, possibly even litigation.

So, for example,

– in A. above, your sons may think you loved your daughter more than them.  After all, your sons have children to raise and put through college, and your unmarried daughter doesn’t have any of those responsibilities and she has a good job.  So, in your sons’ minds, it’s obvious who you loved most!

– in B. above, the son who received the startup money may not understand your reasoning and may feel very bitter about how the assets were distributed.  As far as he can tell, during your lifetime you were financially generous with the other kids too.

– in C. above, your youngest child, whose inheritance was left in Trust, may interpret your actions to mean you thought he was a “loser,” unable to manage his own affairs.  He may feel that you loved and respected his older sibling who was designated Trustee more than you loved and respected him.

Conclusion:

Informing your children in advance about your decisions regarding estate distribution may help avert discord after you’re gone.  Certainly, one good option is a face-to-face discussion.  However, an excellent alternative is to prepare a letter that explains why you’ve chosen to pass on your estate in your particular way.  The point is to clearly communicate your thoughts so that your children aren’t left guessing, and, possibly, fighting in court for years!

Getting Legal Help:

Experienced Estate Planning Attorney, Elga A. Goodman, can help you with all your estate planning needs.  Contact us today at 973-841-5111.

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Unfortunately, when a loved one dies, arguments may arise among the heirs to the estate (also known as the beneficiaries).  One potential area of dispute may involve a commission due the Executor for serving in that capacity.  The following is a brief overview of the Executor’s role, and an example of the type of problem that may surface.

Overview

Many of us have accumulated assets over the years (for example, a house, stocks, jewelry, and personal mementos).  When you prepare a Will, you can specify how you want these assets (your “estate”) distributed once you’re gone.  Also, in your Will, you can designate the Executor(s) – the person, persons, or entity responsible for “settling” the estate in accordance with the terms of your Will.

Among the key things the Executor must do is

– identify all the assets left upon your death, determine the value of those assets, gather the assets, and protect them.

– use the assets to pay off all your debts and expenses, including all outstanding federal and state taxes.

– distribute to the beneficiaries whatever assets remain after all debts, expenses, and taxes have been paid.

Disputes Among  Beneficiaries

As the above suggests, the Executor’s responsibilities may be very time consuming.  Settling an estate may often take one or more years.  Under the law, an Executor is entitled to receive a commission for his efforts.

However, if you do not want your Executor to receive a commission, you should state that in your Will.  If you neglect to do so, circumstances may arise that result in disputes among beneficiaries.

Example:

Upon the death of their mother, Susan and her two brothers, Jack and Robert, became the sole beneficiaries of their mother’s estate.  In their mother’s Will, Jack was designated as Executor, and he was instructed  to divide the estate equally among the three siblings.  Problems arose when, upon fulfilling his Executor responsibilities, Jack presented his siblings with a written accounting as required by law.  The accounting specified how the estate was settled, including all expenses, debts, and taxes paid out, the inheritance each of the siblings would receive, and the commission due Jack from the estate for serving as Executor.

Susan and Robert were outraged.  They clearly remembered their mother saying that she did not want Jack to collect a commission for serving as Executor.  The problem was that their mother never included this information in her Will.  So, under the terms of the existing Will, Jack was entitled to the commission.  Many heated arguments ensued.  Jack did ultimately collect his commission, but Susan and Robert never forgave him!

It’s not enough to inform family and friends of your intentions.  To help preempt feuds after you’re gone, you need to make sure that your Will accurately reflects your wishes.  Once you’re gone, you won’t be able to correct mistakes or omissions.

Getting Legal Help

Experienced Estate Planning Attorney, Elga A. Goodman, can help you with all your estate planning needs.  She can work with you to help insure that your Will  accurately reflects your intentions.  Contact us today at 973-841-5111.

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Executor, Trustee, and Testamentary Guardian – What’s the Difference?

July 8, 2014

Legal documents can be difficult to understand, containing unfamiliar words.  In the case of Wills, certain key terms frequently cause confusion –  specifically,  Executor, Trustee, and Testamentary Guardian.   We hope the following discussion will help clarify these three very different terms. 1. The Executor Many of us have accumulated assets over the years (for example, […]

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Taking the Law Into Your Own Hands Can Prove Costly

April 29, 2014

We’ve all heard the adage, “You get what you pay for.”  When it comes to getting “do it yourself” legal material off of the internet vs. seeing an attorney, this may certainly apply.  The following is a cautionary tale that highlights potential problems that may arise. Ms. Ann Adrich, living in Florida, decided to draft […]

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