It is important to create a comprehensive estate plan, and there are certain measures that one can take to avoid probate if done correctly. Probate is the legal process whereby a last will and testament is determined to be valid and authentic by a court of law. Under New Jersey State Law, the will is admitted to probate when the executor files a “Petition for Probate” with the decedent’s will attached. Additionally, if the decedent died without a will, then an administrator would apply with the Surrogate. Probate proceedings take place in the county surrogate’s court where the decedent resided at the time of their death.
At the probate proceeding, the Surrogate can deny the probate of the will if there is doubt on its face. If there are no objections, the Surrogate then issues letters of testamentary to the executor of the will. An executor of an estate has a fiduciary duty to the estate’s beneficiaries. This means that the executor is obligated to carry out the will in accordance with its terms and must act with good faith and honesty. Therefore, the executor carries out the decedent’s wishes in accordance with the decedent’s last will and testament. This includes paying all of the administrative expenses, funeral bills, and debts, as well as settling claims. The remaining funds are then paid out to the named beneficiaries. The executor must also manage and address any issues that may arise throughout the estate’s administration.
A way to avoid probate is to create a trust to hold assets during an individual’s lifetime and then ensure those assets are distributed upon death. The passing of the assets would occur in the same way as an executor would distribute the assets when probating a will. However, probating a will means that the document is a public record that anyone can view. A trust document is a private document and its terms are not public. One of the best methods to avoid the risks associated with probate is to create a revocable trust and transfer the non-retirement assets during the course of a person’s lifetime into the trust. Retirement assets such as IRAs and 403Bs are governed by their own rules and should therefore not be transferred to a revocable trust because a person could face adverse income tax consequences. Retirement funds should pass by virtue of beneficiary designation after death. This means that retirement assets are not subject to probate so long as it designates a beneficiary.
Sometimes avoiding probate may not be an option, as one size does not fit all when it comes to estate planning. By taking all factors into consideration, an individual can create a successful estate plan that fits their needs. It is important to speak with a knowledgeable New Jersey estate planning attorney to help achieve your goals and protect your assets. The estate planning attorneys of the Law Offices of Hunziker, Jones, & Sweeney, P.A. have experience assisting New Jersey residents with all aspects of trusts and estates, including wills, estate administration and estate taxation. Our estate planning lawyers are trusted by our clients to handle each legal matter with diligence and compassion. For more information or to schedule a consultation, call our New Jersey estate planning firm at (973) 256-0456.
