As the new year begins people consider changes that they may wish to make. These changes may involve estate planning, particularly if a life changing event such as a marriage or the birth of a child has occurred. Many terms are thrown around about estate planning, and one that is frequently heard in New Jersey and elsewhere is probate.
Probate is the process that is undertaken to determine the legal owner of an asset when the original owner of the asset has died. If a beneficiary is named and living, on a life insurance or 401(k) policy for example, probate is not required as the ownership of the asset is clearly indicated. Probate assets are those that were owned by the decedent without having a beneficiary named. This does not apply to jointly-owned assets as the surviving joint owner is now the sole owner.
Typically when a person dies, an estate is opened and the probate process on the will begins. It is possible to create a will where probate may not be needed. In addition to naming beneficiaries, two additional options are available to designate a beneficiary and are known as Transfer on Death (TOD) and Payable on Death (POD). Assets with either of these in place are not probate assets. It is possible to name alternate recipients in the event that the named beneficiary predeceases the testator.
Estate planning can seem a complex and overwhelming task. It can also be emotional and difficult as it forces one to face one’s own mortality. It can also be an invaluable gift to one’s loved ones. A well-thought-out estate plan will make a very difficult time easier to bear for the loved ones left behind. An experienced estate planning attorney in New Jersey can provide guidance in creating a plan that is comprehensive and helps to ensure that one’s final wishes will be carried out.