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    Home » Resources » Frequently Asked Questions » Wills and Trusts FAQs

    Wills and Trusts FAQs

      • Don’t I need to wait until I’m married and/or have acquired significant assets before I need a Will?

      • People offer all sorts of explanations for why they have yet to create even the most basic estate plan. The simple truth is that every adult can benefit from having an estate plan in place, without regard to age, marital status, or net worth. At a bare minimum, executing a Will ensures that the State of New Jersey (or your state of residence at the time of death) will not determine what happens to your estate assets in the event of your death.

      • What is a Last Will and Testament and what can I accomplish with one?

      • A Last Will and Testament is a legal document that is used to express an individual’s wishes with regard to his/her estate assets and what should be done with them upon the Testator’s (creator of the Will) death. Gifts made in a Will may be general or specific and may be made to as many different beneficiaries as the Testator wishes. Along with serving as a vehicle for making gifts of estate assets, a Will is the only opportunity the parent of a minor child has to indicate who the parent would want to serve as Guardian for the minor child if one is ever needed.

      • What happens if I die without a Will in place?

      • If you do leave behind a valid Will you are said to have died “testate.” If you fail to leave behind a valid Will you will leave behind an “intestate” estate. If you die intestate, the State of New Jersey (or your state of residence at the time of your death) decides how your estate assets are distributed using the state’s intestate succession laws. Usually, this means that only close relatives will inherit from your estate.

      • What is a trust?

      • In its most basic, a trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, also referred to as a Grantor or Maker, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. The beneficiaries may be current and/or future beneficiaries. Although you never have thought about it, you likely enter into trust agreements on a regular basis. Imagine, for example, that you are moving out of the country and you ask your best friend to hold onto your living room furniture until your nephew is able to come pick it up. In that scenario, you have created a trust agreement wherein you are the Settlor, your best friend is the Trustee, and your nephew is the beneficiary of the trust. To create a trust, you need the following five elements:

        • Settlor – the person who creates the trust. A Settlor may also be referred to as the Grantor or Maker of the trust.
        • Trustee – an individual or entity that administers the trust terms as well as manages and invests the trust assets. Most Settlors also appoint a successor Trustee in case the original Trustee cannot or will not serve.
        • Beneficiary – a beneficiary is the person, entity, or even family pet that receives the benefit of the trust assets. A trust may have both current and future beneficiaries.
        • Terms – created by the Settlor and may be anything that is not illegal or unconscionable.
        • Funding – almost anything of value can be used to a fund a trust, including cash, securities, and real property.

      • What are the duties and responsibilities of a Trustee?

      • The duties and responsibilities of a Trustee can be wide ranging and will differ from one trust to another; however, there are some common duties and responsibilities most Trustees have, including:

        • Following all trust terms unless they are illegal or unconscionable.
        • Communicating with beneficiaries.
        • Investing trust assets using the “prudent investor” standard.
        • Managing trust assets.
        • Distributing trust assets.
        • Keeping trust records.
        • Preparing and filing trust taxes.
        • Defending the trust against legal challenges.

      • What happens during the probate process?

      • At the time of your death, you will leave behind an estate that consists of all assets owned by you, or in which you had an ownership interest, at the time of your death. Those assets must now be transferred to new owners; however, before that can occur a number of other steps must take place first during the legal process known as probate. Among the most common of those steps are:

        • Authenticating the decedent’s Last Will and Testament if applicable.
        • Identifying, locating, and valuing estate assets
        • Allowing creditors to file claims against the estate
        • Litigating any challenges to the Will
        • Ensuring that taxes owed by the decedent and/or the estate are paid
        • Effectuating the transfer of estate assets to the intended beneficiaries and/or heir of the estate.

      • Should I use a Will or a trust to distribute my estate assets?

      • This is something that can truly only be decided after consulting with an experienced estate planning attorney; however, there are some common considerations when deciding whether a Will or a trust should be used. If your estate is small enough to qualify for small estate administration, and you do not have minor children (nor plan to have any in the near future), a Will should suffice. If, however, your estate is large enough that probate avoidance is a consideration and/or you do have minor children who will inherit from your estate, a trust is often the better choice to distribute your estate. Using a trust also keeps the terms of your estate plan private and offers the added benefit of incapacity planning as well.

      • Do I need an estate planning lawyer to create a Will or trust or can I use a DIY form?

      • It is easy to find just about any DIY legal form you might need on the internet. As such, you might see an opportunity to save time and money by using one of these forms; however, in reality you are more likely to cost your loved ones a considerable amount of unnecessary time and money when it comes time to probate your estate if you forego the advice and guidance of an experienced estate planning attorney. DIY estate planning forms are notorious for having mistakes, errors, and omissions that lead to protracted litigation during the probate of an estate. Your Will and/or a trust agreement will act as the foundation of your entire estate plan. Consequently, you want them created right – the first time. To make sure that is the case, work with an experienced estate planning attorney during the creation and execution of your Will and trust.

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