There are a number of websites that have a forms you can fill out to prepare your will. However, every state has its own requirements with respect to the execution of a last will and testament and it’s very easy to run afoul of those requirements on a website that uses a generic one-size-fits-all template. In New Jersey, you need to have the will duly witnessed, duly executed and acknowledged.
Beyond the formalities of the will execution, many of those forms simply do not include clauses and provisions to properly protect you and your estate. For instance, the wills we prepare contain personal property clauses which allow you to separately list valued items such as family heirlooms to leave to certain people, which we refer to within the four corners of your will.
In addition, your will should provide for tax provisions to the extent necessary and should be very cautious in listing the representatives.
Our wills also provide for a trust for the benefit of minor children who might otherwise receive a share of the estate outright. It allows you to provide that any share in the estate be held until they reach a certain stage in their life or a certain age.
Our clients typically embrace the idea of delaying the distribution of money to minor children until they reach adulthood. They often feel that their children are too young at the age of 18 or 21 to have a significant amount of cash paid out to them. Sometimes, they’ll provide that a third of what their children would get would be paid out at the age of perhaps 25 and another third at the age of 30, and then the last third at 35, depending on the formula they’re comfortable with.
The form wills that you might otherwise get online or in the store simply will not go into that sort of thoughtful detail.
Q: What do you call a trust for minors in this situation?
It’s a testamentary trust if it’s included in the four corners of your will. It’s a survivor’s trust if it’s created outside of your will during your lifetime. If it’s a testamentary trust included in your will, it does not come to life, legally speaking, until after you’ve passed away.
Q: In the case of a trust for a minor, are you required to allow the opportunity to invade that trust at the age of 18 for a short period?
Not in New Jersey.
The person for whom we draft the will can dictate the terms. There is a tremendously wide range of discretion. For example, the trust can provide that the trust’s beneficiary simply receives the trust assets when he or she reaches the age of majority. Or the trust can give the trustee the discretion to pay or withhold income generated by that trust and/or to invade its principal from time to time for the benefit of the beneficiary of the trust.
The discretion and judgment of the trustee may be necessary for the support, education, medical care, etc. of that minor child. Even after the child reaches 18 or 21, whatever the age of majority is in that jurisdiction, depending on the trust, it can be held or invaded from time to time at the trustee’s discretion for the benefit of a trust beneficiary until certain age thresholds are reached.
The trustee’s discretion can also be limited and, for example, might require that you pay the income to the beneficiary when he or she meets a certain age. It might also require you to make periodic distributions of the principal in certain amounts yearly, or however frequently you choose.
Q: Is the trustee normally a person or an institution?
It can be either. Institutional trustees used to be in greater favor, but the trusted relative or friend can serve as trustee and typically does today. We still have circumstances in which our clients elect to appoint a bank or other institution as the trustee, but those situations have become much rarer.