by Jose D. Roman | Jan 10, 2025 | Estate Planning, Living Will
Estate planning is not just planning for death – it’s also planning for incapacity. A Living Will is an essential planning tool everyone needs to ensure that their medical wishes are honored if they ever become unable to communicate them. Here is a short summary of Living Wills, their importance, and how to create one in the New Jersey.
What Is a Living Will?
A Living Will, also known as an Advance Directive, is a legal document that outlines your wishes regarding medical care and end-of-life treatment. It comes into effect if you become incapacitated and unable to express your preferences. A Living Will can specify decisions about life-sustaining treatments, resuscitation efforts, artificial nutrition, and other critical interventions.
Why Is a Living Will Important?
- Ensures Your Wishes Are Honored: A Living Will gives you control over your medical care, even when you cannot speak for yourself.
- Avoid Conflict and Reduce Stress on Loved Ones: Without a Living Will, family members may face difficult decisions about your care. A clear document can ease their emotional burden and prevent potential conflicts.
- Provides Guidance to Healthcare Providers: Medical professionals are bound to follow your instructions as stated in a legally valid Living Will.
How to Create a Living Will in New Jersey
Creating a living will in New Jersey is straightforward but requires careful consideration. Follow these steps to ensure your living will is valid and reflects your intentions:
- Understand State Requirements: In New Jersey, a living will must comply with the New Jersey Advance Directives for Health Care Act, N.J.S.A. 26:2H-53. The document must be in writing, signed by you, and either notarized or witnessed by two adults.
- Reflect on Your Preferences: Think about your values, beliefs, and medical treatment preferences. Consider consulting with your doctor to understand the implications of different medical interventions.
- Appoint a Healthcare Proxy: You can designate a Healthcare Proxy (also called a Durable Power of Attorney for Healthcare) to make decisions on your behalf if you’re unable to do so. This person should be someone you trust to respect your wishes.
- Draft the Document: Be clear and specific about your wishes to avoid ambiguity. In most instances an attorney will draft your Living Will along with a Durable Power of Attorney, and Last Will and Testament as part of a typical Estate Planning package. However, if you just want a Living Will and are looking for a free or low cost option, use a template specific to your state. The New Jersey Commission on Legal and Ethical Problems in the Delivery of Health Care, has developed free forms that are available here. The website Five Wishes also provides very lost cost options for individuals throughout the country here.
- Sign and Formalize the Document: Sign the document in the presence of a notary public or two witnesses. Witnesses cannot be your healthcare proxy or anyone directly involved in your care such as your doctor.
- Distribute Copies: Share copies of your living will with your Healthcare Proxy, family members, and primary care physician. Keep the original in a safe but accessible location.
- Review and Update Regularly: Life circumstances and medical advancements may change your preferences. Review your living will periodically and make updates as needed.
Frequently Asked Questions
1. Can I change my Living Will? Yes, you can update or revoke your living will at any time, as long as you are mentally competent. Be sure to inform everyone who has a copy of the document about the changes.
2. What happens if I don’t have a Living Will? Without a Living Will, medical decisions may be made by your family members or healthcare providers based on what they believe is in your best interest. This can lead to stress and potential disagreements.
3. Is a Living Will the same as a Last Will and Testament? No, a Living Will addresses healthcare decisions during your lifetime, while a Last Will and Testament outlines the distribution of your assets after death.
Final Thoughts
A Living Will is a powerful tool to ensure your medical wishes are respected and to provide peace of mind for you and your loved ones. In New Jersey, the process of creating a Living Will is straightforward and accessible. It is also one of the few legal documents you can obtain for free and complete on your own. By taking the time to prepare this document, you can take control of your future care and alleviate potential challenges for your family.
Start planning today by consulting with a legal professional or using reliable resources to draft your Living Will. It’s a small step that can make a big difference during a difficult time.
by Jose D. Roman | Jan 8, 2025 | Estate Administration, Estate Planning
Probate can be a confusing and emotional process, especially if you are dealing with the loss of a loved one. If you live in New Jersey or are handling the estate of someone who resided there, it’s important to understand how probate works in the state. Here’s a quick guide to help you navigate the probate process in New Jersey.
What Is Probate?
Probate is the legal process through which a deceased person’s estate is settled and distributed to beneficiaries. During probate, the court validates the deceased’s will (if one exists), appoints an executor or administrator to oversee the estate, and ensures that debts, taxes, and other obligations are paid before assets are distributed.
Is Probate Necessary in New Jersey?
In New Jersey, whether probate is necessary depends on the type and value of the assets left behind. Some assets, such as jointly owned property, life insurance proceeds with named beneficiaries, or accounts with payable-on-death (POD) designations, bypass probate. However, assets solely in the deceased’s name typically require probate to transfer ownership.
Types of Probate in New Jersey
New Jersey has two primary probate processes:
- Formal Probate:
- Required when there is a dispute about the will or the estate’s administration.
- Overseen closely by the Surrogate’s Court.
- Informal Probate:
- The most common process when there is no dispute.
- Streamlined and less costly, as it requires minimal court involvement.
Steps in the Probate Process
- File the Will with the Surrogate’s Court:
- The executor named in the Will must file the original will and a certified copy of the death certificate with the Surrogate’s Court in the county where the deceased resided.
- If there is no Will, the court will appoint an administrator, usually a close family member, to handle the estate.
- Appoint an Executor or Administrator:
- The court officially appoints the executor or administrator to act on behalf of the estate.
- This individual receives “Letters Testamentary” (if there’s a will) or “Letters of Administration” (if there isn’t a will), granting them legal authority to manage the estate.
- Notify Creditors and Beneficiaries:
- The executor must notify all beneficiaries named in the Will and publish a notice to creditors, allowing them to make claims against the estate within a specified timeframe.
- Inventory the Estate’s Assets:
- The executor compiles a list of the deceased’s assets, including bank accounts, real estate, personal property, and investments.
- Pay Debts and Taxes:
- The executor ensures all outstanding debts, including medical bills, funeral expenses, and taxes, are paid before distributing the remaining assets.
- Distribute Assets to Beneficiaries:
- Once all obligations are met, the executor distributes the remaining assets according to the will or, if there’s no will, New Jersey’s intestacy laws.
How Long Does Probate Take in New Jersey?
The timeline for probate varies depending on the complexity of the estate. Informal probate can take as little as a few months for simple estates, while complex or contested cases may take a year or more to resolve.
Avoiding Probate in New Jersey
There are ways to minimize or avoid probate in New Jersey:
- Create a living trust and transfer assets into it.
- Designate beneficiaries for accounts and insurance policies.
- Hold property jointly with rights of survivorship.
Do You Need an Attorney?
While New Jersey’s probate process is relatively straightforward, hiring an attorney can be beneficial, especially for larger or more complicated estates. An attorney can help navigate legal requirements, resolve disputes, and ensure the executor fulfills their duties properly.
Conclusion
Probate in New Jersey is a manageable process, but understanding the steps and requirements can help reduce stress and ensure the estate is handled efficiently. If you’re dealing with probate, consider consulting a qualified attorney to guide you through the process and provide peace of mind.
by Jose D. Roman | Nov 27, 2024 | Estate Planning, Medicaid
Qualifying for Medicaid is often the only way most individuals can afford long term nursing care, whether that care is received in a long term care facility such as a nursing home or at home. In New Jersey, a long term Medicaid applicant is only permitted to have $2,000.00 in available assets in order to qualify. Many individuals are required to “spend down” their assets to meet the $2,000.00 limit. One tool that can help individuals qualify for Medicaid, while also saving for inevitable funeral expenses is to establish an Irrevocable Funeral Trust. In this post, we’ll explore what an irrevocable funeral trust is, how it works, and how it can assist with Medicaid planning in New Jersey.
What Is an Irrevocable Funeral Trust?
An Irrevocable Funeral Trust is a legal arrangement that allows individuals to set aside funds to cover funeral and burial expenses. Once funds are placed in the trust, they are managed by a trustee and cannot be withdrawn, altered, or revoked by the individual who established the trust. This ensures the money is exclusively used for pre-arranged funeral costs. While the funds are irrevocable, it is often easy to reassign the funds to a different funeral service provider.
Unlike a revocable trust, which can be changed or terminated, an Irrevocable Funeral Trust offers specific benefits, particularly in the context of Medicaid planning. The funds in an Irrevocable Funeral Trust are generally exempt from being counted as an asset when determining Medicaid eligibility. With the average New Jersey funeral costing in the $10,000.00 to $15,000.00 an Irrevocable Funeral Trust can be a powerful planning tool.
How Does an Irrevocable Funeral Trust Work?
- Establishing the Trust:
- The individual works with a funeral provider or financial institution to set up the trust. They specify the funeral and burial arrangements they want, including items such as a casket, service, and burial plot.
- Funding the Trust:
- The individual transfers a sum of money into the trust, typically based on the anticipated costs of the funeral and burial arrangements.
- Management of Funds:
- The funds are managed by the trustee and used exclusively for the purposes outlined in the trust. Any remaining funds after the funeral services will revert to the State of New Jersey if you are a Medicaid recipient or in other cases to your estate.
Benefits of an Irrevocable Funeral Trust for Medicaid Eligibility
Medicaid is a need-based program, meaning applicants must meet strict income and asset limits to qualify. In New Jersey, individuals often find it challenging to meet these requirements while also setting aside money for necessary future expenses. Here’s how an Irrevocable Funeral Trust can help:
- Asset Protection:
- Funds placed in a Medicaid compliant Irrevocable Funeral Trust are not counted as part of an individual’s assets for Medicaid eligibility. This means you can reserve money for funeral expenses without jeopardizing your ability to qualify for Medicaid.
- Spend-Down Strategy:
- If an individual has excess assets that prevent them from qualifying for Medicaid, funding an Irrevocable Funeral Trust can be an effective spend-down strategy. By transferring assets into the trust, the individual reduces their countable resources while ensuring their end-of-life expenses are covered.
- Peace of Mind:
- An Irrevocable Funeral Trust provides certainty that your funeral and burial arrangements are pre-funded and will not burden your loved ones during a difficult time.
Key Considerations for New Jersey Residents
- State-Specific Rules:
- New Jersey has specific guidelines regarding how the funds in an Irrevocable Funeral Trust can be spent. Services ancillary to the funeral costs may not be permitted. Some states also have a maximum contribution limit. It is essential to work with a knowledgeable professional to ensure compliance with these limits.
- Irrevocability:
- Once funds are placed in the trust, they cannot be withdrawn or repurposed. This is a binding arrangement, so careful planning is crucial.
- Choosing a Trustee:
- Select a reputable funeral home or financial institution to manage the trust. Transparency and reliability are key factors to consider. In New Jersey, Funeral Planning CHOICES, the New Jersey Prepaid Funeral Trust Fund is the leading funeral prefunding product in the state and one of the largest prepaid funeral trusts in the country.
Final Thoughts
An irrevocable funeral trust can be a valuable part of Medicaid planning for New Jersey residents. It offers a way to preserve assets, ensure Medicaid eligibility, and relieve loved ones of financial and emotional burdens associated with end-of-life arrangements. However, navigating the complexities of Medicaid and trusts requires careful planning and professional guidance.
If you’re considering an IFT, consult with an elder law attorney or a trusted funeral director to ensure that your trust is properly established and aligned with New Jersey’s requirements.
by Jose D. Roman | Nov 13, 2024 | Estate Planning, Power of Attorney
A durable Power of Attorney is an essential legal document that grants a trusted individual (the “agent” or “attorney-in-fact”) authority to act on your behalf (the “principal”) in managing financial, legal, or healthcare decisions. A “durable” Power of Attorney is one that remains valid even if you become incapacitated.
It is important to have a Power of Attorney in place because everyone in New Jersey is presumed to be in charge of their own decision making as soon as they reach the age of 18 (the age of majority). Having a Power of Attorney in place will ensure that someone can act on your behalf in the event you ever become incapacitated. Since we never know when we might be incapacitated – even temporarily due to an accident – there is no good reason to wait to obtain your Power of Attorney.
The law regarding adult decision making applies to everyone. It even applies to individuals with intellectual disabilities, whose parents are often surprised to learn that they no longer have the legal authority to make decisions for their child as soon as they reach their 18th birthday. Parents in that situation cannot have their child sign a Power of Attorney and need to apply to the court to become appointed guardian. However, guardianship is a topic for another day.
What Is a Durable Power of Attorney?
A Power of Attorney allows the agent to make decisions and handle affairs for the principal in specific or broad areas, depending on how the document is drafted. Common powers granted under a Power of Attorney include:
- Managing bank accounts and investments,
- Paying bills and handling debts,
- Buying or selling property,
- Filing taxes,
- Making healthcare decisions (if included in the scope of authority).
The document’s durability means it remains valid even if the principal loses the capacity to make decisions due to illness, injury, or other circumstances.
Why Is Having a Durable Power of Attorney Important?
Without a Power of Attorney, your loved ones may face significant legal and financial challenges if you become incapacitated. They may need to petition a court to appoint a guardian or conservator, which can be time-consuming, costly, and emotionally draining. A Power of Attorney ensures:
- Continuity in managing your financial and legal affairs,
- Avoidance of court intervention,
- You get to choose someone you trust to act in your best interests.
In addition to financial matters, a Power of Attorney can include provisions for healthcare decisions, ensuring that your medical preferences are respected even if you cannot communicate them. However, this is often included in a separate documents such as a Healthcare Proxy, Advance Directive, or Living Will.
How to Create a Durable Power of Attorney in New Jersey
Creating a Power of Attorney in New Jersey involves several steps to ensure it is legally valid and tailored to your needs:
- Choose a Trusted Agent Select someone you trust implicitly, such as a family member, close friend, or professional advisor. Your agent should be reliable, organized, and capable of managing the responsibilities assigned to them.
- Determine the Scope of Authority Decide whether the Power of Attorney will grant broad or limited powers. For example, you may authorize your agent to handle all financial matters or restrict their authority to specific tasks, such as managing a single bank account.
- Draft the Document Work with an attorney familiar with New Jersey law to draft the Power of Attorney. While templates are available online, consulting an attorney ensures the document complies with state-specific requirements and addresses your unique needs.
- Sign the Document In New Jersey, a Power of Attorney must be signed by the principal in the presence of a notary public. Additionally, it’s recommended to have two witnesses present to strengthen the document’s validity, especially if you anticipate that it will be used out of state.
- Make Copies Accessible Provide copies of the Power of Attorney to your agent and any relevant institutions, such as banks or healthcare providers. Keep the original in a safe, accessible location and inform your agent where to find it.
- Review and Update Periodically Life circumstances change, so it’s important to review and update your Power of Attorney as needed, especially after major events like marriage, divorce, or the death of your chosen agent.
Key Considerations for New Jersey Residents
- Statutory Requirements: New Jersey law requires that a Power of Attorney document clearly state the principal’s intention for it to remain effective upon incapacity.
- Financial Institutions: Some banks and financial institutions in New Jersey may require additional documentation or their own forms, even with a valid Power of Attorney.
- Revocation: You can revoke a Power of Attorney at any time as long as you have the mental capacity to do so. In order to revoke the document you must inform your agent and any institutions of the revocation in writing.
Final Thoughts
A durable Power of Attorney is a powerful tool for ensuring your affairs are managed by someone you trust if you become unable to do so. By taking the time to create a Power of Attorney, you can protect yourself and your loved ones from unnecessary stress and uncertainty. If you’re ready to establish a durable Power of Attorney in New Jersey, consult with a qualified attorney to guide you through the process and ensure your wishes are legally documented.