Most people know that I believe living trusts are unnecessary in New Jersey if the sole reason is to avoid probate.  There are, however, situations when living trusts are not only useful, but essential.

Take, for example, the circumstances of a married couple where both spouses have children from previous marriages.  The following example is a good illustration.

Ed and Barbara have done well financially had have accumulated joint assets well in excess of the New Jersey estate tax exemption of $675,000 each.  Each of them has a son and a daughter from their first marriage.  Both parties have close and loving relationships with their own children, all of whom are adults.  Ed is close with Barbara’s children.  Although Barbara and her step-children tolerate each other, they are not close.  The clients’ basic objective is to provide for each other after the first one dies and to leave everything equally to their children upon the death of the survivor.  Ed and Barbara agree on all of the details when it comes to designing the provisions of their wills - - except one:  Ed is afraid that, if he should die first, Barbara might decide to change her will and either disinherit his children or substantially reduce the amount of assets she leaves to them.  Barbara says she would never do that, but Ed does not want to take any chances.  Barbara then wonders out loud whether she, too, ought to be concerned.  What happens if she dies and Ed meets someone else, and things change???

The parties can execute wills with typical provisions for couples in their financial position to meet all of their objectives, except that is no guarantee that what both agree to now will be carried out after one of them is gone.  They know wills are dynamic documents - - they can be changed at any time you are still alive and have testamentary capacity. 

Think about how the parties could make sure their current intent is carried out regardless of who dies first and regardless of what happens afterwards.  There is more than one way to solve this dilemma.  In next month’s issue, I will provide the answers.





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Questions? Contact us at Michael C. Rudolph, Esq. P.A.

Michael C. Rudolph, Esq. P.A.
154 Boonton Avenue | Kinnelon 07405
Phone: (973) 208-2900 ext. 4