WILLS & ESTATE PLANNING

Every owner of property, real or personal, has an estate.

"Real property," "realty" or "real estate" means land and buildings. Everything else that may be owned is called "personal property," or "personalty." Personalty includes bank accounts, stocks and bonds, furniture, cars, money, life insurance, jewelry, and other personal effects. It is the owner's privilege to select to whom her or his estate will go upon death. A person may choose one of several ways to dispose of an estate:

* by will
* by creating a living trust
* by joint ownership
* or by doing nothing and letting the law distribute the property
at death, by means of intestate succession.

MAKING A WILL

Making a will is an important step in a financial management program, and saves the heirs time and money, providing by means of advance planning for the orderly transfer of property.

Making a will can avoid the cost of a bond, which will usually be required of an administrator of an estate when a person dies intestate (without a will), and prevents possible disagreement among those who will receive the property of the estate. A person who makes a will is called a "testator." The testator decides to whom, when and in what amounts the estate assets should go. The testator selects the executor or personal representative, the one who shall be responsible for the disposition of the estate. You may avoid the forced sale of your property after your death, or costly and tedious applications to the court by your heirs for the right to sell it, if you make a will now. Also, you have greater assurances that your plans will be carried out as you desire.

WITHOUT A WILL

Without a will, your property will be distributed by the court according to the laws of intestacy (dying without a will). The law will say who will administer your estate, and among whom and how the property is to be divided. Without a will, you lose the privilege of naming a guardian for your minor children. This is vital, particularly if your spouse or the child(ren)'s other parent does not survive you. Finally, without a will, your property may go to persons in whom you have no particular interest.

MEETING YOUR NEEDS

A will meets your personal needs. It is a document that will stand up in court and will be tailor made to meet the needs of your family and should be thought out carefully. Your will should be prepared by an attorney who can guide you to make the best decisions, but this can be done only after you give her or him all the facts that you alone can give. There are no "formulas" to making a will, in spite of popular books and software on the market and there are legal rules about the proper form. An attorney who knows about will drafting and estate planning can craft your will so that you can be sure it is properly phrased, witnessed, and complies with all the technicalities required by law.

"I WANT TO MAKE A WILL. NOW WHAT?"

In preparing to make your will, start by making a list of everything you own and owe -- a statement that shows you exactly where you stand financially. When describing assets, list retirement plans of all sorts, including pensions. This step is important to determine your gross estate and will enable your attorney to assist you in estate planning. For instance if your assets total $600,000.00 or more, then you may be able to take advantage of certain estate-tax saving trusts and other devices. Some people do not think that they are wealthy, but when adding up all their assets, including their real estate (house) and the value of their pension plans, they realize that they have substantial assets.

Then decide to whom you will leave your real and personal property. State what your wishes are by making a list of the persons involved, their relationship to you, your objectives, what each person's bequest (gift made in a will) is to be, and how it is to be provided. Of course, you may make bequests to friends or to charities. It is not necessary for you to make bequests only or, indeed, at all to family members. If you die without a will, however, only your blood relatives will receive any part of your estate, according to the law.

YOUR EXECUTOR

Select an executor to administer the will. This person may be a beneficiary of the estate, a member of the family, a financial institution, your lawyer or accountant, a trusted friend or a business associate. You should also think of a contingent or secondary executor in case your first choice dies before you or is unable to serve. Also decide who you want to serve as trustee of any trusts created in your will, and who shall be the guardian of your minor children, if any.

Remember your will is not recorded anywhere until your death, so no one need know of its contents, if that is your wish.

You may change your executor or any individual named in the will at any time you wish, by means of a codicil, or by completely revising it. This revision should be considered any time your circumstances change, such as at divorce, the birth of a child, death of a spouse, need to change executor, or significant improvement in financial condition. When your assets, beneficiaries, or circumstances change you should rethink your estate plan.

CAUTION!!!

Never change your will by crossing out items or drawing lines through items, by erasures, writing over, or adding notations. If you do, you may be destroying the validity of the will as an effective legal document. The proper way to redo your will is by drawing a new one or by codicil.

The existence of your will has no effect on your ability to sell or otherwise dispose of your property during your lifetime. You can give part or all of your property away while you are still alive; this is called an "intervivos" gift. Gifts may have tax consequences, however, and your attorney or tax advisor should be consulted before making a substantial gift.

LIFE INSURANCE

With regard to life insurance payable to the named beneficiary on your death, the insurance policy is a contract between the insurance company and you (or other policy holder). The proceeds are paid according to the terms of the policy. Always name a contingent beneficiary in case the primary beneficiary predeceases you or dies simultaneously. Without a contingent beneficiary, the proceeds of the policy could be added to your estate and will be thus subject to executor's or administrator's commission. Life insurance proceeds may be subject to the federal estate tax, but the named beneficiary will receive the proceeds free from the New Jersey inheritance tax or other estate administration charges.

Miller, Miller & Tucker, P.A. are prepared to discuss with you the issues of:

Jointly held personal and real property
Powers of attorney
Inheritance by will
Gift tax consequences
Living will options
Key information to be provided to your Executor
Trusts - yes or no?
Intentional disinheritance

Please consider calling Miller, Miller & Tucker, P.A. today to discuss your will and other estate planning needs.

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The information expressed above should not be construed as legal advice but merely information on the law that may be of interest to you.  Remember, individual legal problems require individual solutions. Please contact Miller, Miller & Tucker, P.A. if we can help.