“Celebrity” estate stories are too common: Think about the estates of James Gandolfini, who actually started, but postponed working on his estate planning six months prior to his unexpected death, unfortunately he didn’t start early enough and died unexpectedly at age 51 while vacationing in Rome, Italy. Also, actor Michael Jackson who died at age 50 or Sony Bono who perished at age 62 …or Howard Hughes who died at age 70 ….or Aretha Franklin who died at age 76, or Dr. Martin Luther King, Jr. who died at age 39, or even Abraham Lincoln who died at the age of 56, or even Pablo Picasso who died at the age of 91. There is only one common thread among these individuals, some of which were considered “old” or “older” and some “young” or “younger”, some had a more extensive formal education and some didn’t, but they all had one element in common: NO WILL OR ESTATE PLAN! Unfortunately, those who died without a will or more extensive estate plan all ended up in the formal Probate Court and almost universally ended up with multiple claims against their estate that took years to finalize, plus the unnecessary estate litigation fees as well as Administrators who were forced to post a bond to demonstrate h/she would “faithfully perform their duties…”). I performed an estate administration last year, my client was the child of a couple (with no siblings), the Surrogate Court required she post a bond to represent the estate. Her function as administrator was to receive and hold the assets of the estate, as Administrator, and then transfer the assets to the beneficiary i.e. HERSELF ……. because there was no will a bond was not waived (as it normally is waived in a will etc.) the lack of the waiver of a bond cost this woman $3500 PER YEAR!
The existence of an estate plan or even a well drafted will, which only 50% of Americans have, not only eliminates potentially fraudulent claims against an estate, they also eliminate unnecessary attorney fees, and permit the transfer of your assets to YOUR intended beneficiaries in the manner and amounts you determine, as opposed to as per the orders of the State of New Jersey by operation of law. Many people think a will is the most important document in your estate plan….and this MAY be true; however trusts may be a more appropriate document to (a) name your intended beneficiaries and (b) spell out how the beneficiaries are to receive the inheritance i.e. outright or in trust (c) avoid or significantly reduce unnecessary probate fees by 50% or greater (d) reduce total attorney fees ….while at the same time (d) provide the “privacy ” that a Will cannot provide simply because a will becomes a “public documents” for anyone to obtain a copy of whereas trusts are not submitted to the Surrogate Court, therefore never become public documents. Therefore the contents of a trust are never disclosed by operation of law (no one knows who received what, if anything…..or if an individual is disinherited from an estate…..only by an individual (perhaps Trustee) who “talks too much” and discloses private information contained in the Trust to a third party, all contrary to the wishes of the deceased can destroy the intended privacy of a trust.
What if you own real estate in another state, if you transfer the “out of state real estate” into a trust there will be no need to probate in the “other state” therefore no need to submit to the jurisdiction of the “other state”…… therefore you avoid multiple probate issues and the unnecessary expenses of multiple estate administrations.
A properly drafted estate plan, whether with a trust or when a trust is unnecessary, will include a Durable Power of Attorney to provide a third party the ability of handling your affairs when incapacitated. Also, the estate plan should include a Health Care Proxy so someone can provide instructions to your medical advisors when you are unable to communicate.
I do admire a client’s good intentions in addressing estate planning issues, however, good intentions do not necessarily generate a good comprehensive estate plans. Please schedule a consultation with my office so we may discuss your concerns and generate the estate plan that is appropriate for you.