The Will and Estate Planning Process

The state’s legal experts discuss what to consider when determining how to distribute your assets.

By Jennifer Lesser, Contributing Writer On Feb 1, 2024

The process of will and estate planning can be daunting and often unpleasant, to say the least. Creating an estate plan requires putting all of your affairs in order, from property ownership to bank accounts, so that they can be passed on to loved ones if you die or are incapacitated – and a will is just one piece of that puzzle. Fortunately, New Jersey is home to attorneys who can help with this process, serving not only as experts on the legal ins and outs of drafting a will or estate plan, but also as trusted advisors to families.

“There’s almost a detective aspect of what we do for clients. We have to find out as much as we can about their background, any legal issues, any obligations that need to be upheld under a prenuptial or divorce agreement if they’re in a second marriage …there are lots of little details along the way that have to be considered,” says Joseph P. Scorese, a member of Sills Cummis and Gross’s Tax, Trusts and Estates Practice Group. “One of the biggest mistakes I see is clients who have tried to draft their own wills; they’ve gone online to sites like LegalZoom and think they have it all worked out, but people have made major mistakes – like accidentally disinheriting their spouse – through one of those programs.”

There are also specific laws and taxes relevant to New Jersey residents that the average person may not be aware of, such as the state’s inheritance tax. “If a client is unmarried and without children, and they want to leave their assets to a relative like a niece, sibling or cousin, there’s a tax that applies at low thresholds … it ends up being around 15%, and many of our clients don’t realize that,” Scorese explains. Other New Jersey-specific laws will apply if a client wants to limit what he or she decides to leave to their spouse; the state’s elective share statutes place limits on how far a spouse can be disinherited.

“And if a person doesn’t have a will, the law stipulates that the state will dictate who receives your assets, which is why these documents are so important,” adds Adam M. Grenker, partner in the Taxation and Wealth Planning Department at Fox Rothschild.

In addition to taking into consideration the relevant state inheritance taxes and federal estate tax, Susan K. Dromsky-Reed, co-chair of the Trust and Estate Practice Group at Brach Eichler, LLC, explains that families need to consider who will be named in certain important positions: who will act as the executor of the will, a guardian of any minor children, and which individuals or institutions could serve as trustees if a trust is in order for family planning. It’s also important to determine a backup in case any of these individuals are unable to act, she adds.

Scorese adds that attorneys can help clients sort out the interpersonal relationships of anyone they have designated in their will. “We look at what’s going on within the family and how they get along to guide clients to make decisions that are not only good on paper, but that we’ll be able to successfully implement,” he says.

As such, in the initial phase of will or estate planning, clients can expect their attorney to want to discuss both what kinds of assets they have (and how they are owned) as well as elements of their family life that may come into play when executing their plans. Scorese also notes that a will doesn’t necessarily dispose of all of a person’s worldwide property, which is a common misconception – assets like bank or brokerage accounts in their own names, retirement accounts, 401(k)s and IRAs don’t pass under wills and are pursuant to beneficiary designations.

“One very common mistake is to think that assets like life insurance, qualified retirement plans, IRAs and jointly held property are somehow controlled by the will that we are preparing. These are so-called non-probate assets which require individual attention,” Dromsky-Reed adds. As a result, she explains that there must be a separate designation for the owner and beneficiary of life insurance, and a separate designation for who the beneficiaries are of IRAs and pension plans.

“If a client has $50,000 in a bank account and a $5 million 401(k), and they want to protect their spouse or children on those assets, they’re going to have to make sure they’re considering how to get those accounts into the estate or through a trust to protect their beneficiaries,” Scorese adds. “It’s a crucial part of the process, as we want to be able to harmonize and coordinate all of these assets under the umbrella of the client’s intentions.”

New Jersey attorneys can also help clients create an extra layer of protection for their children through what are called special needs trusts (SNTs), which are often necessary for children who have a disability. “These trusts are designed to allow a child with special needs to use the money for things that are not otherwise provided by government assistance programs,” Scorese says.

According to Grenker, other important documents to consider drafting are living wills, healthcare proxy and power of attorney, which can all come into play for clients who are still alive, but unable to handle their own affairs. “It’s very important to put on paper who is able to conduct your affairs if you become unable to do so,” he says. “These documents stipulate who can take care of your needs during your life as well as if something were to happen to you.”

Legal experts agree that ensuring that all of these documents remain up-to-date is also extremely important. One of the most common mistakes is never going back to review or update them to reflect a person’s current wishes for their belongings, guardianship or assets. “A common pitfall is the failure to review the will and other documents from time to time to ensure that the documents still make sense; that the people who are going to act as guardian, executor and trustee are still available to assist you, or to review whether tax laws have changed, which could require a modification of the planning and that the beneficiaries of the will are still appropriate,” Dromsky-Reed says.

Grenker points out that as children get older, clients may want to give them more control, or if an issue arises with someone in the family, that there won’t be any recourse if the documents aren’t updated to reflect those changes. “It can cause a whole lot of trouble amongst your loved ones. Problems within the family can provide fertile ground for litigation, and nobody wants to see an estate go up in legal fees,” Scorese says.

“From a legal perspective, doing the proper planning now is a lot more cost effective than fighting in court later,” Grenker adds.

To that end, the preparation of a will should be considered an ongoing and fluid process as opposed to a one-time transaction, Grenker concludes. And that’s why it’s imperative to work with an attorney you can trust. “It’s really important to get to know the person who does your estate planning work, and develop a real relationship with them – as practitioners who deal with families more than corporations or other entities, we are in this field to become a trusted advisor to your family,” he says.

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