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We understand that planning for what happens at the end of life can be an uncomfortable subject for many of our clients. However, planning to ensure that those we love are cared for after we are gone is a selfless act, and at the Law Office of Jace C. McColley, LLC, we make the process as smooth and painless as possible. We take pride in crafting estate plans that accomplish our clients’ goals and bring them peace of mind. Many legal tools are available to accomplish this; some of the ones most commonly used by our firm are listed below.
A will is a legal document a person writes that spells out what they wish to happen to their assets when they pass away. The person writing the will is known as the testator, and they can also use the will to state who they desire to have guardianship of their minor children after they pass away.
A will can be a simple document that states the testator is leaving all their assets to a certain beneficiary. However, in many cases, wills tend to be more complex. Some of the reasons wills may be complex include when the testator:
A will also allows the testator to choose an executor for their estate. The executor is in charge of ensuring the estate is probated pursuant to the terms of the will. By naming who they want the executor to be, a testator helps to minimize the possibility of arguing and strife among family members after they are gone.
Trusts are a valuable asset to most comprehensive estate plans. A trust is a fiduciary relationship wherein one party (trustor) gives another party (trustee) their assets to hold and direct on behalf of one or more beneficiaries. There are many different types of trusts. Some of the most commonly used in New Jersey estate planning are:
An irrevocable trust cannot be revoked, meaning once it has been created, it cannot be dissolved. There are several reasons why an irrevocable trust is the best option for some estate planning situations.
Irrevocable trusts offer tax benefits, and once assets have been placed in the trust, they are generally safe from the grantor's creditors.
Many families look to irrevocable trusts to provide for their loved ones with special needs. A special needs person often needs intensive and expensive life-long care. Much of this care is provided by government programs, such as Medicaid. However, the eligibility requirements for Medicaid are stringent, and owing even a small amount of assets can prevent a person that needs Medicaid from qualifying for coverage. When assets are placed in an irrevocable trust, under certain circumstances they may be considered to be “non-countable,” and they will not prevent the person that needs Medicaid from qualifying. Assets placed in an irrevocable trust also may not count as an asset when applying for benefits from the Veterans Administration.
Many people prefer revocable trusts (often referred to as living trusts) as they are much more flexible than irrevocable trusts. They can be modified or dissolved at any time.
One of the reasons revocable trusts are popular is because they are a tool that can be used to avoid probate, which is a court-supervised process that takes place after a person dies. Probate can often be time-consuming and inconvenient. A revocable trust allows a person to retain the ability to control their assets while they are alive but also ensures the process of distributing those assets to their beneficiaries after they have passed away is as painless as possible.
An advance healthcare directive (HCD) is a way for a person to make their wishes regarding their medical care known in advance if they cannot make decisions at a later date. For example, if a person is in a coma, HCD can make known whether or not they want to have CPR if they stop breathing. If not, a DNR or “Do Not Resuscitate” order can be issued.
An HCD not only prevents a person from receiving the medical care they do not want, but it also prevents family disagreements over their loved one’s care.
A power of attorney (POA) is an important part of many estate plans in New Jersey. Two different types are typically utilized. They are:
Durable POA: By executing a durable POA, a person is able to give another individual the ability to make the important end of life and/or healthcare decisions on their behalf. It is effective as soon as it is executed and remains effective in the event of incapacity.
Springing POA: A springing POA can grant the same powers as a durable POA, but instead of becoming effective at the time of execution, there is a future event that triggers the POA. For example, the future event could be incapacity as determined by a physician.
A deed is a legal document that transfers property ownership from one party, known as the grantor, to another party, known as the grantee. Different types of deeds can be used in different types of situations.
Bargain & Sale Deeds: The most common type of deed in New Jersey is a bargain and sale deed, a way for a grantee to convey real property to a grantor. The grantor in this type of deed promises they have not committed any act that would encumber title to the real property.
Life Estate Deeds: A life estate deed is a way for a grantor to use and retain ownership of the property while they are alive, but when they die, the property automatically transfers to someone else.
Quit Claim Deeds: Quit claim deeds are common among family members. When a grantor signs a quit claim deed, they are stating that they are transferring any interest they possess in the property to the grantee, but they are not making any warranties about the title to the property.
Our firm understands effective estate planning requires getting to know our clients’ goals and priorities. It is not a cookie-cutter process, and we take our time to ensure each of our clients has a plan that is personalized to fit their needs. Contact our office today to schedule a consultation.