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Kearny Estate Blog

An LLC can help accomplish estate planning goals

Like other states, New Jersey allows residents to form limited liability companies, or LLCs. Usually, a person would form an LLC because he or she is interested in starting a business and wants the protection from creditors that the LLC offers.

However, some New Jersey residents may also want to consider using an LLC as an estate planning device. Using an LLC for the purpose of transferring assets can be a convenient way both to avoid some of the probate process and to save on taxes, including the federal gift tax.

How are claims against an estate handled?

Not surprisingly, many New Jersey residents die owing various other individuals and businesses money. In some cases, these are well established debts like a medical bill or a credit card. In other cases, though, the debt may arise under more controversial circumstances.

For instance, the person who died may have been the target of a negligence lawsuit or some other litigation that could have led to the deceased's owing money.

Dispute over film illustrates problem with high-profile estates

Lawyers for the estate of the late pop sensation Michael Jackson seemed reasonably confident in an initial victory in their legal dispute with HBO.

This probate litigation arose after the estate heard that HBO was planning a film that portrayed Jackson in a negative light.

What happens when there is no will?

When a New Jersey resident dies without a will, then the laws of this state determine who gets what share of his or her property. These rules also apply when the person's will is invalid or if the will does not provide for a particular piece of the person's overall estate.

These rules do not apply, however, to property held in trust or that would otherwise pass outside of the probate and estate administration process.

3 questions to ask before creating a living will

Surveys show less than a third of all Americans have created an advance directive, such as a living will, making it one of the most neglected documents for their physical and financial well-being. A living will states how you want to be cared for if you become physically or mentally incapacitated.

Some avoid getting this legal document because they’re too young and healthy to worry, while others avoid it because it forces them to answer difficult questions over their mortality, such as whether doctors should do everything they can to keep them alive, even if the outlook is dire.

Make sure to update your beneficiary designations

This blog has previously discussed that there are ways a New Jersey resident can pass property along to their loved ones without having to draft a will or go through probate. In addition to trusts, people can use vehicles like jointly held real estate, joint bank accounts and other means to pass along property.

One type of property that works like this is a beneficiary account. These accounts include retirement plans and life insurance proceeds. As the name implies, a New Jersey resident can designate a beneficiary, or beneficiaries, with respect to these individual assets.

Limits to hand-written wills

A previous post on this blog talked about the ongoing legal conflict surrounding the estate of the late, great singer Aretha Franklin. The so-called Queen of Soul died last year.

As that post discussed, one of the issues is that while Ms. Franklin left no formal will, she did leave several handwritten documents in her home which she styled as wills. The documents did include detailed instructions about how Ms. Franklin wanted to distribute her property after her death and appeared at first glance to be in her handwriting.

Do you know when to update your estate plan?

Many people procrastinate drafting an estate plan, so if you already have an estate plan, you may be a step or two ahead of the pack. However, this should not mean that you have finished estate planning for good.

Estate plans are usually the most effective when they reflect current laws, your current situation and your current estate planning goals. This means that as your life changes, you may need to revisit your estate plan to make sure it reflects those changes.

Common mistakes for executors to avoid

As this blog has discussed before, executors and personal representatives in New Jersey have a lot of obligations they are expected to fulfill in a timely fashion. To summarize, their job is to collect the assets of a deceased loved one, pay off all valid debts and expenses and then distribute whatever is left to the heirs according to either the law or the terms of the will.

The process can be more complicated than one might think. In many cases, a person who is not accustomed to handling legal affairs will strongly want to consider consulting with an attorney who has experience with probate and estate administration.

How does joint real estate play in to an estate plan?

Many New Jersey residents own real estate together with other people. It is therefore important for people to understand how real estate gets passed down when an owner of the property dies.

For example, property owners may choose to own property as tenants in common. Under these circumstances each person owns a certain percentage of the property, even if the property is not literally divided in to parts. Should the person dies, his or her share of the equity in the property will pass down under the terms of his or her will or other estate planning documents.

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