Why would you need a Will? There are several considerations.
Limiting Estate or Inheritance Tax exposure: If you die domiciled in the State of New Jersey with a net estate worth over $650,000, the portion over $650,000 may be subject to New Jersey Inheritance tax. There is currently no Federal Estate Tax, but in 2011, absent Congressional action in the meantime, the exemption amount will revert to $1,000,000, so if your net estate is over $1,000,000, the portion over that amount may be subject to Federal Estate Tax. If you are likely to die with an estate worth over $650,000, it is worthwhile to retain an attorney to do some estate planning for you and draft a Will that will help you limit your estate tax exposure.
What if you don’t have a lot of money? There are still reasons to have a Will! It’s common for people with modest estates to think that a Will isn’t really necessary for them, since they don’t have to worry about estate tax issues. Let’s examine what will happen if you die without a Will (intestate).
Who would inherit if you don’t make a Will? The New Jersey intestacy statutes deal at great length with who inherits if you don’t make a Will. Here is what the courts will do with your estate if you don’t tell them otherwise (by Will):
If you are married or in a domestic partnership, your spouse gets all of your estate if you have no descendents or parents living, and still gets most of your estate if you do have descendents or parents living. If you die without a surviving spouse (or if you and your spouse die simultaneously), then the order of succession is:
- your descendents (children, grandchildren, etc, including both natural born and adopted children);
- your parents;
- your parents’ descendents (your siblings, nieces and nephews, etc.);
- your grandparents;
- your grandparents’ descendents (your aunts and uncles, first cousins, second cousins, etc.);
- your step-children.
Is this how you would like to have your money and worldly goods go? This scheme may be fine for you, but many people’s relationships don’t follow such strict lines. If you are closer to your step-children, for instance, than to your third cousins, you might want to make a Will, or if you’d rather benefit your impoverished nieces than your wealthy parents.
What about the children? One of the most compelling reasons to make a Will even if you don’t have a lot of money is to provide for the guardianship of your children. There is no strict line of succession followed by the courts to determine who will care for your children should you die while they are minors. The courts will look first to the other parent, if he or she survives you, and then to any other heirs, to decide who is a fitting guardian for your children. If you want to decide who will raise your children if you are not around to do it, it’s important to have a Will to set this out.
C. Megan Oltman, Esq.
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