Wednesday, April 6, 2016

The New Jersey Wills Act: Can You Draft Your Own Will?


By: Justin M. Smigelsky, Esq.
 
The drafting and execution of a Will is extremely technical and should not be undertaken by a layperson without legal assistance. Although numerous forms of fill-in-the-blank and do-it-yourself Will kits can be found with a few clicks of your mouse, you should never draft a Last Will and Testament without the assistance of an experienced attorney.

Pursuant to statute, every Will must be in writing, signed by the testator or testatrix– or by some other person in his or her presence and at his or her direction – and signed by at least two witnesses to either the signing or the testator’s acknowledgment of the signature or the Will. If a document is not executed in compliance with these requirements, the document may still be valid if the proponent of the document establishes by clear and convincing evidence that the decedent intended the document to constitute his or her Will. A handwritten (or holographic) Will may be valid if it is intended to be a Will and the signature and material portions of the document are in the testator's or testatrix’s handwriting.

New Jersey case law is rife with examples of what can wrong when a testator attempts to draft his own Will. Although the New Jersey Wills Act recognizes holographic Wills as valid, whether witnessed or not, testamentary intent of the holographic Will must be demonstrated by the proponent. The proponent of the holographic Will bears the burden of producing evidence of testamentary intent – a holographic writing prepared without testamentary intent will not be admitted to probate merely because it represents the probable intent of the drafter. Furthermore, even if the holographic Will is admitted to probate, the drafter has most likely created ambiguity or failed to include certain important provisions which will have unanticipated consequences on his or her estate.

In a 2003, the Chancery Division of Monmouth County tackled the issue of whether the completion of a pre-printed form resulted in the creation of a valid holographic Will acceptable for probate. According to the Court, the Wills Act requires only the testator’s or testatrix’s handwritten words be considered and those words must be intelligible apart from the words that are not in the testator’s or testatrix’s handwriting; accordingly, by striking the pre-printed portions of the Will, the purported holographic Will was without meaning and, thus, invalid.

In sum, although it is possible that a self-drafted Last Will and Testament will be admitted to probate, there are far too many problems that could arise if the Will is not properly prepared and executed. The disposition of your estate is far too important to jeopardize by not seeking the assistance of an experienced attorney.

Because estate planning, administration, and litigation require specialized knowledge, you may wish to consult with an experienced attorney if you are planning your estate, or the fiduciary or beneficiary of an estate or trust. Specifically, you may wish to contact an attorney if you have questions regarding the probate process, administration of an estate or trust, fiduciary obligations, preparation of a formal or informal accounting, refunding bonds and releases, and the procedures for filing a formal accounting or exceptions thereto. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship. 

Friday, March 4, 2016

NEW JERSEY ESTATE ADMINISTRATION & LITIGATION: WHAT IS THE AUTHORITY OF AN EXECUTOR OR ADMINISTRATOR?


By: Justin M. Smigelsky, Esq.

Pursuant to New Jersey statute, the duties and power of an executor or administrator commence upon his or her appointment. In the event that the individual acts on behalf of the estate prior to appointment, he acts at his own risk; however, if the acts are beneficial to the estate, such power may relate back in time to ratify said acts.
 
All wills executed after September 4, 1968, confer upon every executor thereunder, in the absence of a contrary provision in the will or in a court order, a wide-ranging set of administrative powers authorizing him or her so to act, provided he or she acts in good faith and with reasonable discretion. Sometime, however, the testator may wish to limit, modify, or enlarge the powers conferred upon the executor – of course, if an individual passes away intestate (without a Last Will and Testament), this is not possible.

Therefore, in accordance with N.J.S.A. 3B:14-23, unless otherwise limited by judgment, order, or the governing document, an executor or administrator shall have several powers including, but not limited to, the following:
  • To employ or compensate attorneys from estate funds for services rendered to the estate or to the fiduciary in performance of his or her duties;
  • To employ and compensate accountants from estate funds for services rendered to the estate or to the fiduciary in the performance of his or her duties;
  • To accept additions to the estate from sources other than the estate of the decedent;
  • To invest and reinvest assets of the estate in certain instances;
  • To effect and keep in force fire, rent, title, liability, casualty, or other insurance to protect estate property;
  • To take possession of, manage, sell, lease, or mortgage property owned by the estate, unless the property or any interest thereof is specifically disposed of;
  • To make repairs to estate property;
  • To execute and deliver agreements, assignments, bills of sale, contracts, deeds, notes, receipts, and any other instrument necessary or appropriate for the administration of the estate; and
  • To compromise, contest, or otherwise settle any claim in favor of the estate or fiduciary, or in favor of third persons and against the estate, including New Jersey Transfer Inheritance Tax, New Jersey and Federal Estate Tax, income and other taxes.

Additionally, the court having jurisdiction over the estate may authorize an executor or administrator to exercise any other power, or to disclaim any other power, if the court determines that such authorization is necessary for the proper administration of the estate.
 
In sum, in administering an estate, it is essential that the fiduciary understand the scope of his or her authority and, as permitted by statute, that the fiduciary retain an experienced attorney in the event he or she has any questions or concerns as to whether he or she is taking an appropriate course of action.

Because estate and trust administration and litigation requires specialized knowledge, you may wish to consult with an experienced attorney if you are either a fiduciary or beneficiary of an estate or trust. Specifically, you may wish to contact an attorney if you have questions regarding the probate process, administration of an estate or trust, fiduciary obligations, preparation of a formal or informal accounting, refunding bonds and releases, and the procedures for filing a formal accounting or exceptions thereto. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.

 

Thursday, February 25, 2016

NEW JERSEY ESTATE ADMINISTRATION AND LITIGATION: THE FIDUCIARY DUTY TO ADHERE TO THE WILL OR TRUST



By: Justin M. Smigelsky, Esq.1


Pursuant to statute2, a fiduciary is under a duty to expeditiously and efficiently settle and distribute the estate of the decedent in accordance with the terms of any probated and effective will and applicable law. Accordingly, a fiduciary appointed to administer an estate – an executor, administrator and substituted administrator with the will annexed, or trustee under a will – must adhere to the directions of the instrument under which he or she was appointed. Any deviation from the testator’s testamentary scheme during the course of the fiduciary’s administration of an estate or trust is made at his or her own peril; therefore, the fiduciary must be cautious if he or she is to take any action not consistent with his or her authority. If the fiduciary exceeds his or her authority under the instrument, he or she may be liable for any ensuing loss regardless of his or her good faith or due care.

In limited circumstances a fiduciary may be permitted to depart from the directions of the governing instrument – if the powers of the fiduciary are not clearly defined (oftentimes, the authority granted is far from clear); if it is impossible or illegal to comply with the directions; if compliance would substantially impair the accomplishment of the purposes of the instrument; or, most importantly, if a court permits departure.3

With respect to seeking the advice and direction of the court, a fiduciary has the right – and duty – to seek the court’s direction if he or she has a substantial doubt as to his or her duties and obligations. Pursuant to Rule 4:95-2, a fiduciary is permitted to bring an action for instructions as to the exercise of any statutory powers or for advice and direction in making distributions. Due to the potential liability for failure to adhere to the terms of a will or trust, a fiduciary should seek advice and direction if he or she is unsure as to the propriety of any action to be taken.

Because estate and trust administration and litigation requires specialized knowledge, you may wish to consult with an experienced attorney if you are either a fiduciary or beneficiary of an estate or trust. Specifically, you may wish to contact an attorney if you have questions regarding the probate process, administration of an estate or trust, fiduciary obligations, preparation of a formal or informal accounting, refunding bonds and releases, and the procedures for filing a formal accounting or exceptions thereto. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.  

  1. Justin M. Smigelsky, Esq. is an Associate with Timothy J. Little, P.C., with offices in Woodbridge and Chesterfield, New Jersey.
  2. N.J.S.A. 3B:10-23.
  3. In re Cook’s Will, 35 Backes 123 (Prerog. 1945).
  4. See In re Matter of Wold, 310 N.J. Super. 382 (Ch. Div. 1998).

Wednesday, October 28, 2015

THE “LIVING WILL” IN NEW JERSEY: AN OVERVIEW OF THE NEW JERSEY ADVANCE DIRECTIVES FOR HEALTH CARE ACT



THE “LIVING WILL” IN NEW JERSEY: AN OVERVIEW OF THE NEW JERSEY ADVANCE DIRECTIVES FOR HEALTH CARE ACT

By: Justin M. Smigelsky, Esq.

An often overlooked – yet essential – item of any estate plan is the document commonly referred to as an “advance directive” (otherwise known as a “living will” or “health care directive”). Nearly every state has enacted legislation to recognize an individual’s right to plan for important health-care decisions in the event of future incapacity by executing an advance directive. The New Jersey Advance Directives for Health Care Act, N.J.S.A. 26:2H-53 et seq., addresses the formalities for execution, re-affirmation, modification, revocation and suspension of an advance directive, as well as an individual’s rights in this regard and the obligations imposed upon health-care professionals and institutions.

New Jersey law provides for three types of advance directives: an individual may state his wishes/instructions for health care (“instruction directive”), may designate another competent adult to make health-care decisions on his behalf (“proxy directive”), or, as is commonly preferred, both can be stated in the same document (“combined advance directive”). An advance directive becomes operative when (1) it is transmitted to the attending physician or the health-care institution, and (2) it is determined that the patient lacks capacity to make a particular health-care decision. Pursuant to N.J.S.A. 26:2H-60, the attending physician shall determine whether the patient lacks capacity to make a particular health-care decision, with the determination required to be stated in writing (section “a.”) and, in most instances, confirmed by one or more physicians in writing (section “b.). In making such a determination, the patient’s ability to understand and appreciate the nature and consequences of a particular health-care decision – including the benefits, risks, and alternatives – must be evaluated (section “g.”).

Upon a determination that the patient lacks capacity, a designated health care representative (the proxy) exercises the patient’s rights to be informed of the patient’s medical condition, prognosis and treatment options, and to give informed consent to, or refusal of, health care. Once lack of capacity is established, the proxy has the authority to make decisions in regards to the patient’s health care so long as the proxy acts in good faith and within the bounds of the authority granted in the advance directive. In exercising these rights and responsibilities, the representative must seek to make the decision the patient would have made had he possessed decision-making capacity or, when the patient’s wishes cannot be adequately determined, shall make the decision in the best interests of the patient. N.J.S.A. 26:2H-61.

The New Jersey Advance Directives for Health Care Act specifically allows a “declarant” to execute an advance directive for health care at any time; however, an individual adjudicated incompetent cannot execute an advance directive. Accordingly, as with any estate-planning device, it is critical to execute an advance directive prior to loss of capacity/competency. Pursuant to N.J.S.A. 26:2H-57(d), an incompetent individual is permitted to suspend and reinstate an advance directive so long as it was executed while competent – the Act is an anomaly as it provides incompetents with a certain degree of autonomy with regard to pre-determined health-care decisions, but prohibits them from enjoying the full benefit of the statute. See In the Matter of Roche, 296 N.J. Super. 583, fn 3 (Ch. Div. 1996).

Because estate planning, and estate and trust administration and litigation, require specialized knowledge, you may wish to consult with an experienced attorney if you are planning your estate, or a fiduciary or beneficiary of an estate or trust. Specifically, you may wish to contact an attorney if you have questions regarding estate planning, the probate process, administration of an estate or trust, fiduciary obligations, preparation of a formal or informal accounting, refunding bonds and releases, and the procedures for filing a formal accounting or exceptions thereto. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.



           

           

 

Tuesday, August 18, 2015

New Jersey Estate Administration & Litigation: An Overview of the Fiduciary Duty to Account

By: Justin M. Smigelsky, Esq.

A fiduciary – an executor, administrator, guardian, or trustee – holds a position of trust. Because the fiduciary acts for the benefit of others, he must account for the manner in which he handles the assets entrusted to him. Accordingly, a fiduciary has an obligation to account to the beneficiary, at reasonable times, for each item of the estate or trust that comes into his hands.

The fiduciary’s administration of an estate or trust may be concluded either informally or formally. Whereas a formal accounting is submitted to the court for adjudication, it must be prepared in the format provided by the Rules of Court; an informal accounting, however, is not submitted to the court, and may be prepared in any format that the parties find mutually acceptable. Ordinarily, regardless of form, an accounting will include schedules detailing the inventory of assets at inception, subsequent receipts, disbursements made, any distributions to beneficiaries, the balance on hand, and a proposal for distribution upon termination.

In regards to informal accountings, where all interested parties agree to the accounting and execute a Refunding Bond and Release, the fiduciary will not be required to settle his account via court action. Due to the substantial filing fees and audit fees incurred by the estate or trust in seeking judicial approval of an accounting, parties ordinarily will attempt to amicably resolve any issues and avoid judicial approval of the fiduciary’s account.

As to formal accountings, a person in interest may file a complaint upon an order to show cause to compel the fiduciary to account. Also, a fiduciary has the right by statute to seek judicial approval of his account. As previously mentioned, a formal accounting will ordinarily require an audit by the Surrogate which could result in a substantial fee. Currently, for example, an estate exceeding $200,000 (a modest estate if the decedent owned a residence and any financial accounts) will incur an audit fee of 4/10 of 1% of the estate – exclusive of the filing fee, for an estate of $500,000 the audit fee alone will be $2,000 under the current statute.

Regardless of whether the fiduciary’s accounting is presented formally or informally, it is essential that the fiduciary maintain accurate records of all transactions and establish a record-keeping system to monitor the activity of the funds in his charge. The nature of the record-keeping system depends on the size of the estate or trust, the nature of the assets under the fiduciary’s control, and the volume of the anticipated transactions during the course of administration.

Because estate and trust administration and litigation requires specialized knowledge, you may wish to consult with an experienced attorney if you are either a fiduciary or beneficiary of an estate or trust. Specifically, you may wish to contact an attorney if you have questions regarding the probate process, administration of an estate or trust, fiduciary obligations, preparation of a formal or informal accounting, refunding bonds and releases, and the procedures for filing a formal accounting or exceptions thereto. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.

Wednesday, January 14, 2015

Marital Settlement Agreements: Considerations for Drafting New Jersey Divorce Settlements

Marital Settlement Agreements: Considerations for Drafting New Jersey Divorce Settlements
 
By: Justin M. Smigelsky, Esq.
 
            If carefully drafted, a marital settlement agreement (MSA)1 can work to minimize future disputes between divorcees – disputes that can require constant and costly legal assistance. Accordingly, it is very important to reach and draft an agreement that will work over a long period of time. Of course, the nature and content of such an agreement is dependent upon the unique circumstances of each divorce; however, with careful drafting, divorcees can implement a fair and equitable agreement that can minimize post-judgment litigation.
 
            New Jersey law strongly favors the amicable resolution of matrimonial disputes.2 MSAs, are enforceable, however, only to the extent they are just and equitable.3 It is up to the divorcee, with the advice of her attorney, to decide for herself what is fair and equitable – the parties are generally free to divide marital assets (and debt) in any manner they wish.4
 
            As to content, the parties are similarly free to include as much, or as little detail as desired. The standard MSA will include general introductory clauses and recital paragraphs (names, addresses, dates, background information in regards to the children, etc.), clauses pertaining to the parties’ children (form of custody, parenting time/visitation terms, religious upbringing, school concerns, etc.), spousal support provisions (form of alimony, waiver, cohabitation, escalation or reduction, etc.), clauses pertaining to equitable distribution (real property, pensions, financial accounts, vehicles, household items, etc.), clauses pertaining to division of marital debt5, clauses pertaining to tax issues (division of liability, apportionment of deductions, and methods of filing), clauses pertaining to litigation costs and expenses (who will pay the attorney and expert fees?), as well as various other provisions.
 
            As previously set forth, the terms of any agreement depend upon the relationship of the divorcing parties. For example, if there remains an element of trust between the parties, and they are willing to cooperate and communicate with each other in the future, an agreement may be drafted with general terms (an agreement that “breathes”). If, on the other hand, the parties are hostile towards each other, greater detail and specificity may be required in the provisions of the MSA, so that many contingencies can be addressed prior to seeking judicial intervention.
 
            In conclusion, a carefully drafted MSA will serve as an outline for all critical issues between divorcing parties for many years following the entry of the Judgment of Divorce. Although neither party will be completely happy with the provisions and what they may be conceding to their soon-to-be former spouse, at the very least, a properly drafted MSA can reflect the complete understanding of the parties as to their respective rights and obligations upon dissolution of the marriage.
 
Because reaching a divorce settlement, and memorializing the terms thereof, requires specialized knowledge in the area of family law, you may wish to consult with an experienced family law attorney if you are considering dissolution of your marriage. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.
 
  1. Although often referred to a a “property settlement agreement," this term is somewhat of a misnomer; agreements regarding resolution of marital issues do not relate to only real or personal property.
  2. See e.g., Harrington v. Harrington, 281 N.J. Super. 39 (App. Div. 1995).
  3. See Faherty v. Faherty, 97 N.J. 99 (1984).
  4. DeLorean v. DeLorean, 211 N.J. Super. 432, 437 (Ch. Div. 1986).
  5. Unfortunately, division is of marital debt has become more prevalent than division of assets.
 
 
Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq.

Thursday, July 24, 2014

MOTION PRACTICE IN NEW JERSEY FAMILY COURTS

 
Motion Practice in New Jersey Family Courts
 
By: Justin M. Smigelsky, Esq.
 
An application to the court for relief in the form of an enforceable order is generally by motion or, in certain special circumstances, by an application for an order to show cause. There are as many types of motions as there are issues to be decided in the family court including, but not limited to, motions to provide support, fix custody and parenting time, enter injunctive relief, enforce a prior court order, and award counsel fees and costs.
 
In the majority of circumstances all motions must be in writing. Ordinarily, the “motion papers” to be filed with the court and served upon the other party include the notice of motion, supporting certification or affidavit, legal argument in the form of a legal brief or letter memorandum, and proposed form of order. The Rules of Court contain specific requirements as to all papers to be filed with the court – for example, all papers must be prepared on 8.5” x 11” letter-sized paper, with double-spaced 10 or 12-point font, be within the applicable page limits, and must be signed and dated by the attorney of record or a pro se party.
 
If a motion does not rely on facts already in the court’s record, it must be supported by affidavit or, as is more common, a supporting certification. An affidavit or certification must be made on personal knowledge, and must not contain improper matter – for example, the certification must comply with the rules of evidence (hearsay, privilege, etc.). The affiant must sign and date the certification after inclusion of the following statement: “I certify that the foregoing statements made by me are true. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment.”
 
Because motion practice can be expensive, it is important (in non-emergent matters) to make every good faith effort to resolve all contested issues prior to seeking intervention of the court. Furthermore, it is essential to ensure that your application has adequate support in the law prior to filing. Motions without sufficient legal basis, as well as motions made in bad faith, can result in an award of attorney fees and costs to be paid by you to your adversary. Accordingly, you may wish to consult with an experienced family law attorney if you are considering making application to the court. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.
 
Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq., 2014, all rights reserved: Justin M. Smigelsky, Esq.