Q. If I don’t have a very large estate, should I make a Will anyway?
A. Yes. Even for those with a relatively modest estate, making a Will is a good idea. By making a Will, you can determine not only who will receive your assets following your death, but also who will be responsible for paying debts and making distributions to your beneficiaries. A New Jersey estate planning attorney can help you make the right decisions.
Q. Must the Executor of my estate post a surety bond?
A. New Jersey requires the Personal Representative (executor or administrator) of an estate to post a bond representing the full value of the real and personal property in the estate. The bond acts as an insurance policy to ensure that assets are distributed properly. Payment for the bond comes from the decedent’s estate. Another benefit to making a Will is that the testator (the one making the Will) can decide whether to waive the bond requirement. If the bond requirement is not waived, the Personal Representative will have to obtain the bond.
Q. I hear a lot of talk about estate taxes, but I'm no millionaire. Should I be concerned about my estate having to pay taxes after my death?
A. Perhaps. Many people do not realize that apart from the federal estate tax, New Jersey also imposes its own estate tax. At present, an estate valued at more than $675,000 is subject to New Jersey estate tax. In addition, New Jersey also imposes an inheritance tax, depending upon the relationship of the beneficiary to the deceased person. Proper advanced planning can minimize or even eliminate some or all of these taxes.
Q. I have small children. How can I make sure my sister will be entitled to take care of my minor children if my husband and I were to die?
A. Parents are the natural guardians of their children. Typically, a person with minor children will name in his or her Will a relative or a close friend to serve as guardian of the minor children in the event of death.
Q. How will the guardian provide financially for my children in the event of my death?
A. You are responsible for providing financially for your children. You can include in your New Jersey Will a testamentary trust for the benefit of your children.
Q. I heard trusts are complicated, are they?
A. They can be, or they can be relatively simple, depending upon your specific circumstances. You should consult a New Jersey estate planning lawyer.
Q. What is the difference between a Living Will and a Living Trust?
A. A Living Will is an instrument that addresses a person’s wishes with regard to healthcare, and may include Advanced Directives and the appointment of another to make medically related decisions. A Living Trust is an instrument that deals with a person’s assets and authority over those assets. A Living Trust sometimes is used in place of a Will, but more often is used in conjunction with a Will.
Q. What is a Power of Attorney?
A. A Power of Attorney is a written instrument that authorizes another to act as one’s agent. This instrument can be very broad or very narrow, depending upon the purpose for which it is drafted.
Q. What is a Prenuptial Agreement?
A. A Prenuptial Agreement is a written document made before marriage that defines each person’s ownership rights in the other person’s property following marriage.
Q. What is the difference between a limited partner and a general partner?
A. In a limited partnership, a limited partner is a partner who contributes only capital to the partnership, but has no right to participate in the management and operation of the business. A limited partner’s liability is limited to the amount of his or her investment. A general partner, however, assumes responsibility for the management of the partnership and liability for all partnership debts.
Q. I want to start a small business. Should I operate it as a limited liability company?
A. Perhaps. A limited liability company is a form of business that offers the limited liability of a corporation with certain tax advantages of a partnership. Whether you should operate your business as a limited liability company, sole proprietorship, corporation, partnership, or some other entity should be based upon the specific circumstances of your situation.
Q. Under New Jersey law, can one person be the only shareholder of a corporation? Can one person be the only member of a limited liability company?
A. Yes and Yes.
Q. I intend to start a business with my friends. My brother said I should have a Buy-Sell Agreement. What is that?
A. In Business Law, a Buy-Sell Agreement is an expressed agreement preferably made at the time the business entity is formed for one or more of the principals to buy-out the other or others should the situation warrant.
Q. What is a real estate easement?
A. There are many kinds of easements, but in general an easement is a privilege or an advantage in another’s property.
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