Category Archives: Estate Law
Let’s examine the duties of the executor, trustee and agent as it pertains to your estate plan. Selecting a person to carry out the provisions of your estate plan is one of the important and difficult decisions involved in the estate planning process. Yet, the selection process is often overlooked. There are a few practical guidelines in the selection process.
Before selecting any person, it is vital that you understand what it is that person should be doing and how that person may interact with others. Accordingly, the following is a brief discussion of the duties of the executor, trustee and agent (under a power of attorney).
Executor – an executor is the person named in a will to serve as the personal representative of a testator when his or her will is being probated. When the person dies, the executor is charged with the responsibility of locating and probating the decedent’s will. Further, the executor must then safeguard the decedent’s property, pay debts, taxes and expenses, and finally distribute any remaining assets to the beneficiaries as specified in the decedent’s will. Typically, an executor’s responsibilities last from nine months to three years.
Trustee – a trustee is the person (or institution) named in a trust agreement to carry out the objectives and follow the terms as set forth in the trust. A trustee’s duties will vary with the complexity of the trust agreement, thus the more complex the trust agreement is, the more knowledgeable and experienced the trustee should be. The duties of a trustee, however, typically include satisfying tax objectives, protecting trust assets in compliance with the dispositive intentions of the grantor, and distributing assets to beneficiaries as expressed in the trust agreement, among other responsibilities. Unlike an executor, a trustee’s responsibilities can last many years, even beyond a generation or two.
Agent – an agent is a person named in a power-of-attorney (there are multiple types of powers of attorneys, including health care power of attorney and financial power of attorney) who settle choices on your behalf in the event you are unable to do so yourself. An agent under a POA may have responsibilities that last through the lifetime of the person for whom the POA was designed.
Attributes of a Good Executor, Trustee or Agent-in-Fact
With a general understanding of duties and responsibilities, the following is a non-exhaustive list of general attributes of a good executor, trustee or agent-in-fact.
1. Availability and willingness to serve
3. Integrity and loyalty
4. Trust and confidence
5. Business and investment experience and acumen
6. Decision-making abilities
7. Impartiality and lack of any conflict of interest
8. Experience handling such responsibilities
9. Familiarity with your wishes, business, family, etc. (although not always for a trustee)
These nine attributes are just a non-exhaustive list of factors that should be well-thought-out during your selection process. As each role (i.e., executor, trustee, and agent-in-fact) is slightly different, some factors should garner greater attention depending on the role. For instance, a trustee with close familial ties to the beneficiaries may or may not be the best fit on a discretionary trust, whereas someone with a more objectivity and less personal connection may be better suited for the decision-making responsibility.
If you have any questions about the selection process or wish to speak with an experienced estate planning attorney, please contact the estate planning attorneys at Puff & Cockerill LLC. Our estate planning attorneys are experienced and well-versed with the particular nuances of each role and the corresponding responsibilities.
A common question our estate planning attorneys at Puff & Cockerill, LLC receive is: What happens if you die without a will? The short answer is that your estate will be administered according to the intestacy laws of New Jersey. This short answer, however, is not so easily met in practice. Intestacy laws, including the process by which an intestate estate must be administered can be (and often is) complex, confusing and frustrating.
Here is what happens if you die without a will in New Jersey, you are said to have died intestate. Intestate is a legal term that means that you have died without a valid will. In the absence of a will (which is a legal document that directs distribution of your estate) your estate is distributed in accordance with the State of New Jersey’s intestacy laws, which can, and often is, contrary to your wishes.
In essence, what happens when you die without a will, intestacy laws create a framework for how your estate will be distributed. This framework of intestacy statutes are fact-specific, meaning there is no one-size-fits-all answer to intestacy distribution. For instance, depending on your family makeup (i.e. your marital status, number of children, existence of parents, siblings etc.) your distribution may vary in unexpected ways.
The distribution process when you die intestate is called “administration.” Administration is the legal procedure that takes place from the time of your death until your estate and assets are fully distributed to your heirs as delineated by New Jersey’s intestacy laws. Administration occurs in the county in which the decedent died as a resident. The Surrogate Court of that county has jurisdiction over the administration.
The Surrogate Court will appoint an “Administrator.” The administrator collects and preserves assets, pays off your debts and taxes, and finds your heirs and distributes your estate to them. Some of the legal duties include, but are not limited to, investing and reinvesting the assets of the estate, keeping all insurance policies paid and in full force, managing and selling any real property of the estate, settling all claims against the estate, filing any tax returns for the estate, filing any inheritance tax returns for the estate, and continuing any of the decedent’s businesses.
In addition to the foregoing duties and responsibilities, the administrator must also receive the “Letters of Administration.” These letters grant the administrator the authority to handle the estate. Letters of Administration are granted after ten days have passed from the date of death. The person seeking to be appointed administrator must travel to the County Surrogate’s office and apply for administration. The applicant must bring a copy of the death certificate, fill out proper forms, and pay a filing fee of approximately $200.
Most importantly, the County Surrogate Court will normally require an applicant for administrator to post a bond for the estate. The bond serves as insurance that the administrator will not steal the assets of the estate. The cost to obtain a bond increases with the size of the estate and is a reoccurring expense for each year the estate is open. The bond costs can run into the thousands of dollars and the administrator needs to be credit worthy to be appointed. This very significant issue can be avoided with a properly drafted will. All told, the administration process can be quite expensive and time-consuming.
Don’t die without a will in New Jersey!
Due to the complexities and intricacies of the intestate laws, including the estate administration process, our estate attorneys of Puff & Cockerill, LLC are available to help ease the burden and navigate the legal waters. Our estate planning attorneys are experienced and well-versed with the particular nuances of intestate succession, intestacy laws, estate administration and litigating contested estate issues.
You may have an estate plan in place but have you considered estate planning for digital assets you own? Our estate plans need to keep pace and reflect our ever changing digital world. The digital age has ushered in an online and paperless society. With much of our life dedicated to the internet, we all find ourselves with multiple online accounts. Online accounts are amorphous, they include, but are not limited to, online brokerage accounts, retirement accounts, credit cards, stocks, student-loan or utility statements, social media accounts, blogs, and email addresses.
These accounts are our property, they are part of our estate. Consequently, when family members and individuals die, they leave tangible property and, now, digital property.
Recently, a common question has been – how does an executor sort through the decedent’s digital accounts and possessions? Often, the executor does not even know that these digital accounts exist, let alone have any clue as to how to access them. Individuals simply keep these accounts and their passwords to themselves and fail to share even minimal information with their executor. This secrecy only adds to the headache and heartache of administering a loved one’s estate.
The solution: estate planning for your digital assets. As with all estate planning issues, proper and prudent planning is the solution. There are simple steps that all individuals can take to properly plan for our digital world.
Steps to Estate Planning for Digital Assets
Estate Planning for Digital Assets Step 1: You must have an Estate Plan.
In order to protect your digital assets, you should have a will, trust, and power of attorney. These estate planning devices enable you to appoint a fiduciary (an executor or trustee or agent).
Estate Planning for Digital Assets Step 2: Incorporate a Digital Asset Clause or Provision
A “Digital Asset” clause or provision will authorize your fiduciary to access and manage your digital assets and accounts. For instance, such a clause will empower a fiduciary to access your online bank accounts to make payments or close an account in the event of incapacity or death. This clause can also be tailored to a client’s wishes. For instance, if a client does not want to allow their fiduciary to have specific authority over certain digital assets, the will or trust agreement can be altered in accordance with the client’s wishes.
Estate Planning for Digital Assets Step 3: Organize a List of Your Digital Assets
After properly updating or creating a new estate plan to reflect your digital assets, you need to, at a minimum, to identify what your accounts are and where they can be accessed. Additionally, if you feel comfortable, you should (safely) leave the passwords to the accounts with your fiduciary. Your executor should have one document with a list of your assets and passwords.
What you can do? Contact the estate planning attorneys at Puff & Cockerill to help implement a proper and adequate estate plan that covers and protects your digital assets. Your estate plans should reflect our ever-changing world. Online accounts are becoming the norm and technology will continue to expand in our lifetimes. When it comes to planning your estate, there is no better time than now.