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.

http://timothyjlittlelaw.com/firm/attorneys/justin-m-smigelsky-esq/
http://timothyjlittlelaw.com/practice-areas/estate-administration-and-litigation/

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.