In New Jersey, if a person passes away without a will or trust, his or her estate assets are distributed according to what is known as intestate succession. It’s an estate plan of sorts, and for most people, not a very good one.
Certain assets are not subject to New Jersey’s intestate succession laws. These include funds in an IRA, 401(k) or other retirement account, proceeds from life insurance policies, property owned in joint tenancy or tenancy by the entirety, payable-on-death bank accounts, and securities in a transfer-on-death account.
Most other assets are transferred according to intestate succession. So, “who gets what” according to the state of New Jersey? It can get quite complicated, but let’s look at just a few examples.
Let’s say that when you die, your spouse is still alive, you and your spouse have living children and other descendants, and your spouse has no other descendants. In this case, your spouse inherits everything.
Or let’s say your spouse survives you, as do the children you had together and children that you had from a previous marriage. In this situation, your spouse inherits the first 25 percent of your assets (but not less than $50,000 or more than $200,000), together with one half of the balance. Your descendants get everything else.
Obviously, it can get complicated. But the question you need to ask yourself is:
Is this is how you’d like your assets to be distributed?
The answer is probably no, because the state’s plan is like using an axe when a scalpel is called for. It’s based on a formula, with no regard to your actual relationships with your spouse, children, and extended family.
“Who gets what” is just one reason to have a plan of your own, designed and implemented by an experienced New Jersey estate planning attorney. The plan we can create for you not only lets you decide who gets what, but it can also allow you to make sure your wishes are carried out with regard to medical care and financial decisions in the event of incapacity, name guardians for your children, obtain assistance to pay for nursing home care, and much more.
Don’t settle for New Jersey’s “estate plan.”
To learn more about New Jersey’s plans for your estate if you don’t have “a plan”, visit: https://www.nolo.com/legal-encyclopedia/intestate-succession-new-jersey.html