Why do I need a Last Will and Testament?
Without a Last Will and Testament, it will be the laws of the State of New Jersey that will decide by “intestacy” or “intestate succession” who will be the beneficiaries of your assets (a “decedent’s estate.”) It will also be the State of New Jersey that will determine through intestacy who will be appointed as the Administrator or Administratrix (also known as a personal representative) to administer your estate. Upon appointment, the State of New Jersey will require the Administrator to post a surety bond, thereby wasting estate assets. The State of New Jersey will also determine exactly how and by whom your assets will be inherited. For example, if you wish to have your beneficiaries receive assets in disproportionate amounts, you will need to create a Last Will and Testament.
Another important issue to understand is that real property held as joint tenants or tenants in common; financial accounts such as joint accounts (“joint tenancy with rights of survivorship” or “JTWROS”), payable on death (“POD”) or transfer on death (“TOD”) accounts, annuities and life insurance policies as well as retirement accounts such as Traditional IRAs, Roth IRAs, 401Ks, 403Bs, etc., all have designations setting forth who inherits them. As a result, these assets pass to the beneficiaries on those accounts rather than pursuant to the terms of your Last Will and Testament. It is important to coordinate these assets with your terms set forth in you Last Will and Testament. It is astonishing how often even sophisticated clients fail to properly coordinate their estates. See also our section on Probate.
In addition, if any funds in your estate are to be inherited by a child or grandchild under the age of eighteen (18), (referred to as a “minor beneficiary,”) the State of New Jersey will hold those funds in a minor’s account at the County Surrogate’s Office. The Surrogate will invest those assets, control distributions from the account, and will automatically provide any remaining funds to your minor beneficiary when he or she attains the age of eighteen, the age of “majority.” Therefore, to control who your beneficiaries will be, to determine how and when your beneficiaries will inherit your assets, to determine who will serve as the personal representative of your estate (Executor or Executrix), and to nominate who you would chose to serve as guardian for any minor children, every individual should have a properly drafted Last Will and Testament.
The person creating his or her Last Will and Testament is known as the “testator” or “testatrix.” A testator’s Last Will and Testament should be executed (signed) following strict formalities. It should be “self-proving,” meaning that an attorney or a notary public has “attested” to the testator’s signature and the signatures of the witnesses which then permits the Will to be probated by the Surrogate of the County in which the testator resides without having to locate the witnesses to “prove” the Last Will and Testament. There should only be one original, signed Last Will and Testament. A copy of the Last Will and Testament can be used to review its contents but cannot be probated without filing a legal action in the Superior Court of the State of New Jersey. Therefore, your Last Will and Testament should always be kept in a safe deposit box or some other safe and secure place. The person you chose to serve as your executor or executrix to administer your estate should know where your Last Will and Testament is located and be able to retrieve it.
You should review your Last Will and Testament whenever there have been any major changes in your personal or economic circumstances. Examples of such changes might include, but are not limited to: moving to a different State; a birth, an adoption, a marriage, a divorce or a death in the family; the receipt of a large inheritance; the purchase of real property located in a different State; the purchase of a large life insurance or annuity policy; any significant changes in the financial, physical or mental circumstances regarding you or your beneficiaries, or any major changes in Federal or State laws that affect estate and/or inheritance taxes.
Sometimes an attorney will suggest that a Trust be created as part of your estate plan. Do not feel that this means that your estate plan will be more complicated and, therefore, more expensive. Trusts are sometimes necessary for the purpose of avoiding Estate Tax or dealing with minor children or disabled beneficiaries. To understand more about the creation of a trust as part of your estate plan, please see our section on Trusts. With regard to disabled beneficiaries, please see our section on Special Needs Trusts.
The Law Office of Richard M. Cohen will assist you to draft the estate planning documents necessary to properly represent your wishes.