New Jersey Estate Planning & Administration: How Does Divorce Impact An Estate Plan?

By: Justin M. Smigelsky, Esq.

 

It is ordinarily suggested that a client modify his or her estate planning documents in the event of any significant life events including, but not limited to, relocation to another state or country; changes in financial circumstances; changes in tax laws; changes in relationships; the death, disability, or incapacity of any designated beneficiary or fiduciary; and marriage or divorce. However, oftentimes a divorcee will fail to modify his or her Last Will and Testament or insurance policy beneficiaries at the conclusion of the divorce proceedings – what happens in the event that the existing Will benefits the ex-spouse or names the ex-spouse as a fiduciary?

Fortunately, New Jersey has a statute that addresses this circumstance and potentially limits the repercussions for failing to modify an estate plan. Pursuant to N.J.S.A. 3B:3-14, “except as provided by the express terms of the governing instrument, a court order, or a contract relating to the division of the marital estate,” a divorce or annulment serves to revoke any revocable disposition benefitting the former spouse (including by way of Last Will and Testament or life insurance policy), and revokes the nomination of the ex-spouse as Executor or Executrix. At the time of the divorce or annulment, provisions of the “governing instrument” are treated as if the former spouse, and relatives of the former spouse, disclaimed any disposition of property or, in the event of an appointment as fiduciary, the ex-spouse and any relatives died immediately before the divorce or annulment – pursuant to case law, evidence of contrary intent is irrelevant in the event of a challenge to the revocation. Furthermore, pursuant to the statute, the interest of the former spouse in property held by them as joint tenants with the right of survivorship or as tenants by the entireties is severed, and the interest is transformed into a tenancy in common.

It is important to note that, in the event that any provisions in the governing instrument are revoked under the statute, they may be revived by a remarriage between the divorced parties, or by a revocation, suspension, or nullification of the divorce or annulment. Additionally, in the event that the ex-spouse is benefitted by a document executed after the divorce, he or she may still benefit from the deceased spouse or serve as a fiduciary. It is also important to note that a divorce or annulment does not nullify dispositions made pursuant to a qualified retirement plan; for example, in the event a beneficiary is designated for a 401(k) plan or any type of retirement plan subject to Federal law, such designations are not revoked under the pre-empted New Jersey statute. Litigation will often occur where an ex-spouse benefits from the deceased ex-spouse’s failure upon divorce to modify beneficiary designations for a qualified retirement plan; therefore, it is highly recommended that you evaluate all beneficiary designations and estate planning documents in the event of a divorce.

If you have any questions in regards to the divorce process, your Marital Settlement Agreement, alimony, child support, or family law, you may wish to consult with an experienced family law attorney. Similarly, because estate and trust planning, administration, and litigation requires specialized knowledge, you may wish to consult with an experienced attorney if you have questions regarding your estate plan, 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.

Justin M. Smigelsky, Esq. /  Timothy J. Little, P.C.  –  2017  –  All Rights Reserved

Timothy J. Little, P.C. is a full-service law firm with offices in Woodbridge and Chesterfield, New Jersey. Timothy J. Little, P.C. offers specialized legal assistance to individuals, families and businesses throughout New Jersey including Middlesex County (Old Bridge, Woodbridge, Sayreville, East Brunswick, Spotswood, Perth Amboy, Dunellen, Colonia, Sewaren, Iselin, Avenel, Fords, Keasbey, Menlo Park, Port Reading, South Amboy, Monroe, Edison, Carteret, Cranbury, Helmetta, South River, Milltown, Highland Park, Jamesburg, Laurence Harbor), Monmouth County, Union County, Ocean County, Somerset County, and Burlington County. If you have any questions or concerns regarding family law or divorce, please contact the attorneys at Timothy J. Little, P.C. http://timothyjlittlelaw.com/firm/attorneys/justin-m-smigelsky-esq/

Family Law Practice Specialties:
Divorce, equitable distribution of assets and liabilities, alimony, domestic violence, child custody, child support, parenting time, emancipation applications, removal applications, Marital Settlement Agreements, post-judgment enforcement and modification applications

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New Jersey Divorce: The Early Settlement Panel

By: Justin M. Smigelsky, Esq.

 

In an effort to avoid the time, expense, energy, and risks of contested litigation, parties to a divorce in New Jersey are often required to participate in the Early Settlement Panel, or “ESP” as it is commonly referred. In a recent, unpublished decision of the Ocean County Superior Court, the Honorable Lawrence R. Jones, J.S.C., addressed the significance of the Early Settlement Panel. In Swift v. Swift, Judge Jones explicated Rule 5:5-5 of the New Jersey Rules of Court as well as the significance of the divorcing parties’ participation in the program.

As succinctly explained by Judge Jones, generally, the Family Part of each Superior Court sets aside at least one day per month as an “ESP day,” whereby a panel of volunteer panelists – ordinarily, experienced divorce attorneys – donate their time, energy, and knowledge to assist the divorcing parties in resolving the issues in dispute. At the ESP, the panelists are provided with each party’s Case Information Statement, an overview of the case, and the parties’ general positions as to the issues in dispute, and will make non-binding, confidential recommendations for a potential agreement. The proceedings of the Early Settlement Panel are confidential in nature – all discussions, negotiations, offers, counter-offers, and recommendations are treated as confidential and, if the case does not settle, no offer, counter-offer, statement, or recommendation may be presented to the Court as evidence against either party.

As stated by Judge Jones, in order for the ESP program to be successful, both parties must be willing to participate. Pursuant to the Rules of Court, parties to the divorce action, once referred to the Program, are required to participate in the Early Settlement Panel as scheduled. The failure of either party to participate in the Early Settlement Panel, to provide his or her Case Information Statement, or to provide “a submission” to the Early Settlement Panel coordinator in the county of venue, could result in sanctions against the non-cooperating party including the assessment of attorney fees and/or dismissal of that party’s pleadings.

If you have any questions in regards to divorce in New Jersey, the Early Settlement Panel, equitable distribution, or family law, you may wish to consult with an experienced family law attorney. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.


Justin M. Smigelsky, Esq. / Timothy J. Little, P.C. / 2016 – All Rights Reserved

Timothy J. Little, P.C. is a full-service law firm with offices in Woodbridge and Chesterfield, New Jersey. Timothy J. Little, P.C. offers specialized legal assistance to individuals, families and businesses throughout New Jersey including Middlesex County (Old Bridge, Woodbridge, Sayreville, East Brunswick, Spotswood, Perth Amboy, Dunellen, Colonia, Sewaren, Iselin, Avenel, Fords, Keasbey, Menlo Park, Port Reading, South Amboy, Monroe, Edison, Carteret, Cranbury, Helmetta, South River, Milltown, Highland Park, Jamesburg, Laurence Harbor), Monmouth County, Union County, Ocean County, Somerset County, and Burlington County. If you have any questions or concerns regarding family law or divorce, please contact the attorneys at Timothy J. Little, P.C. http://timothyjlittlelaw.com/

Family Law Practice Specialties:
Divorce, equitable distribution of assets and liabilities, alimony, domestic violence, child custody, child support, parenting time, emancipation applications, removal applications, Marital Settlement Agreements, post-judgment enforcement and modification applications

http://timothyjlittlelaw.com/firm/attorneys/justin-m-smigelsky-esq/
http://timothyjlittlelaw.com/practice-areas/family-law/

New Jersey Estate Administration & Litigation: The Importance of Having a Will

By: Justin M. Smigelsky, Esq.

 

Shockingly, it is estimated that seventy percent (70%) of adult Americans do not have a Last Will and Testament. There are many reasons why the majority of adults in this country do not have a Will including, but not limited to, laziness, discomfort in pondering and planning for death, misconception as to the cost to have an attorney prepare the Will, and, as is most often the situation, misunderstanding as to the significance of having a Will.

Despite the popular misconception, having a Will is not only important for the elderly or people with wealth – if you are over the age of eighteen (18), you should have a Will, regardless of whether or not you have assets. A few reasons why you should immediately have a Will properly drafted by an attorney on your behalf are so that you may:

1. Avoid intestacy and New Jersey’s intestate succession laws;
2. Designate the specific beneficiaries to receive your probate estate upon your death;
3. Designate specific items or the percentage of your assets to pass to each beneficiary you select;
4. Designate someone you trust as the executor or executrix of your estate;
5. Avoid the cost and complication of having an administrator or administratrix appointed to administer your estate;
6. Avoid the requirement that the fiduciary post a bond in being appointed;
7. Designate the specific authority you wish for your executor or executrix to have;
8. Designate a guardian for your minor children;
9. Address complex family relationships (such as a second marriage) and ensure that your assets are distributed according to your wishes;
10. Establish testamentary trusts to ensure that distributions are managed properly on behalf of minor or “Special Needs” beneficiaries upon settlement of the estate; and
11. Address “death tax” consequences as the result of your passing.

Having a Will is also important in allowing the testator or testatrix to plan for his or her funeral. Pursuant to New Jersey statute, a testator/testatrix may appoint a person in his or her Will to control his or her funeral and disposition of human remains. It is not necessary that the appointed funeral representative be the executor/executrix of the Will, and the designated representative may act prior to the Will being admitted to probate. In the event that the decedent died intestate (without a Will) the right to control the funeral and disposition, unless otherwise ordered by the Court, is dictated by statute and could easily result in litigation.

Estate planning is not a one-size-fits-all concept and most estate plans require monitoring and periodic revisions. It is ordinarily suggested that a client modify his or her estate planning documents in the event of any significant life events including, but not limited to, relocation to another state or country; changes in financial circumstances; changes in tax laws; changes in relationships; the death, disability, or incapacity of any designated beneficiary or fiduciary; and marriage or divorce. It is also essential that a client understands the difference between probate and non-probate assets and what specific assets will pass through the Will, as opposed to by law or by contract.

Because estate and trust planning, administration, and litigation requires specialized knowledge, you may wish to consult with an experienced attorney if you are planning your estate or are 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.
 

Justin M. Smigelsky, Esq. /  Timothy J. Little, P.C.  –  2017  –  All Rights Reserved
 
Timothy J. Little, P.C. is a full-service law firm with offices in Woodbridge and Chesterfield, New Jersey. Timothy J. Little, P.C. offers specialized legal assistance to individuals, families and businesses throughout New Jersey including Middlesex County (Old Bridge, Woodbridge, Sayreville, East Brunswick, Spotswood, Perth Amboy, Dunellen, Colonia, Sewaren, Iselin, Avenel, Fords, Keasbey, Menlo Park, Port Reading, South Amboy, Monroe, Edison, Carteret, Cranbury, Helmetta, South River, Milltown, Highland Park, Jamesburg, Laurence Harbor), Monmouth County, Union County, Ocean County, Somerset County, and Burlington County. If you have any questions or concerns regarding estate planning, administration, or litigation, please contact the attorneys at Timothy J. Little, P.C. http://timothyjlittlelaw.com/

Estate Practice Specialties: Drafting of Wills and Trusts, appointment and removal of fiduciaries, probate procedures, intestacy, fiduciary duties and obligations, fiduciary accountings and exceptions, fiduciary compensation, marshaling of assets, insolvency petitions, will contests and disputes, Power of Attorney abuse, ejectment and eviction, Refunding Bonds and Releases, New Jersey Transfer Inheritance Tax (IT-R), New Jersey Estate Tax (IT-Estate)

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

New Jersey Estate Administration & Litigation: What is a “Caveat” Against the Probate of a Will?

By: Justin M. Smigelsky, Esq.

New Jersey law requires a period of ten (10) days to elapse between the death of the testator and the probate of his or her Last Will and Testament; therefore, a contestant is provided with what is ordinarily a short period of time within which to file a “caveat” against the probate of the Will. A caveat against the probate of a Will is a legal notice that should be filed with the Surrogate’s Office in the county where the decedent resided at the time of his or her death. Once a caveat is filed with the Surrogate’s Office, the Surrogate is prevented from acting, and anyone challenging the caveat must file a complaint upon an order to show cause in the Superior Court, Chancery Division – Probate Part. A caveat serves to preclude the entry of the probate judgment until the order to show cause is filed, the matter is set for a hearing, and the validity of the Will may be determined. In other words, upon the filing of a caveat, the Will may not be probated and appointment of the executor or executrix can not take place while the caveat remains on file.

Only a party who might be injured by the admission of the Will to probate may file a caveat against admission of the Will – this includes a next-of-kin, a judgment creditor, or a beneficiary under an earlier Will executed by the testator. A caveat should be filed in the Surrogate’s Office in every county where the decedent may have been domiciled – if the decedent had more than one residence, or if he had property in more than one county, the caveator should protect his interests in the event the Will is presented for probate in any one of those counties.

Although the validity of a Will may be challenged for a certain period of time after it has been admitted to probate (generally, four months), if a caveat is properly filed, it prevents the executor or executrix from receiving letters testamentary; if, on the other hand, an action is filed to set aside the Will after it has been admitted to probate, the executor or executrix would have been already permitted to undertake administration and, possibly, distribution. In sum, it is usually advantageous to prevent the probate of a doubtful Will by filing a caveat, rather than seeking to challenge the probate judgment after the Will has been admitted.

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.

Justin M. Smigelsky, Esq. /  Timothy J. Little, P.C., 2017, all rights reserved

Timothy J. Little, P.C. is a full-service law firm with offices in Woodbridge and Chesterfield, New Jersey. Timothy J. Little, P.C. offers specialized legal assistance to individuals, families and businesses throughout New Jersey including Middlesex County (Old Bridge, Woodbridge, Sayreville, East Brunswick, Spotswood, Perth Amboy, Dunellen, Colonia, Sewaren, Iselin, Avenel, Fords, Keasbey, Menlo Park, Port Reading, South Amboy, Monroe, Edison, Carteret, Cranbury, Helmetta, South River, Milltown, Highland Park, Jamesburg, Laurence Harbor), Monmouth County, Union County, Ocean County, Somerset County, and Burlington County. If you have any questions or concerns regarding estate planning, administration, or litigation, please contact the attorneys at Timothy J. Little, P.C.

Estate Practice Specialties: Drafting of Wills and Trusts, appointment and removal of fiduciaries, probate procedures, intestacy, fiduciary duties and obligations, fiduciary accountings and exceptions, fiduciary compensation, marshaling of assets, insolvency petitions, will contests and disputes, Power of Attorney abuse, ejectment and eviction, Refunding Bonds and Releases, New Jersey Transfer Inheritance Tax (IT-R), New Jersey Estate Tax (IT-Estate)

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. 

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.

 

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).