Hanlon Niemann Blog | A Freehold, New Jersey Law Firm

Warning: Your Decision Does Matter

Fredrick P. Niemann, Esq., NJ Estate Plan Attorney

When creating an estate plan, especially in your will and/or trust, an important decision is who to name as your fiduciary. A fiduciary is a fancy legal term for the person who will take care of your property for you if you are unable to do it yourself, such as the executor of an estate, the trustee of a trust, or an attorney-in-fact under a power of attorney. Your first instinct might be to name one of your children as a fiduciary, but if you want to avoid conflict among your children, this might not be the best option.

When naming a fiduciary, it is important to be able to trust the individual, which is why people often name family members as fiduciaries. However problems can arise when a parent with two or more children names one child as a fiduciary. According to Fredrick P. Niemann, an attorney from Freehold, New Jersey, who spoke on the issue of family harmony at a recent estate planning seminar, a child is often not the best fiduciary for several reasons:

• It is hard for a child to be completely objective. 
• Children often disagree over many things, including how long the estate should take to complete, the selling of assets, and the division of personal property.
• Children often don’t communicate with each other well.

An alternative is to hire a professional fiduciary. A professional fiduciary can be a bank or investment firm with trust administration experience with trust powers, a certified public accountant, or a trust company. A professional fiduciary will charge a fee, but the fee should be explained ahead of time. In addition, because a professional is experienced in managing money and property, your assets are more likely to increase under this person’s or institution’s guidance.

To ensure that your family has some input, you can include a provision that allows one or more family members to discharge the fiduciary if they feel the professional is not doing a good job. This will allow your family to make sure the fiduciary is performing properly without having the burden of acting as fiduciary.

For further information and advice in any estate planning matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

By Fredrick P. Niemann, Esq., NJ Special Needs Trust Attorney

Self-Settled Special Needs Trusts are often use when a person with disabilities receives a personal injury settlement, an inheritance, equitable distribution, alimony or child support.  However, in many instances a Self-Settled Special Needs Trust is not appropriate.  A disability lawyer must make an analysis on the onset to make this determination. 

Some of the reasons that the trust may be inappropriate are:

•   The beneficiary does not qualify. For example, the beneficiary may not be disabled or may be over age 64.
•   The beneficiary may not be receiving means-tested public benefits, such as SSI and Medicaid, and may never require such benefits in the future. Also, the amount may be so large that benefits may not be necessary.  In those situations a determination should be made whether a special needs trust is appropriate for other reasons. Perhaps a support trust would be adequate.
•   The amount of the net settlement may be too small. For net amounts under $100,000 it is usually better to seek an alternative to a standalone Self-Settled Special Needs Trust, because of the expense associated with establishing and maintaining the trust. If the net settlement is between $100,000 and $200,000, then a trust may or may not be appropriate. If an individual trustee is available then the trust cost may not be prohibitive. A pooled or community trust may be a good option.
•   It is difficult to find a professional trustee if the amount of liquid assets to be placed in the trust is less than $500,000 - $1,000,000. If a substantial percentage of the settlement is in the form of a structured settlement annuity, there will be insufficient liquid assets to interest a financial institution in serving as trustee.

If you have questions about protecting eligibility for government benefits when filing a personal injury lawsuit or near the end when settlement or verdict is a reality, contact Fredrick P. Niemann at 732-863-9900 or 888-800-7442.  He’s happy to be of assistance.

Fredrick P. Niemann, Esq., a NJ Trust Law Attorney

Your living trust is much more than just a will or a trust document that says which heirs get what percentage or which specific items that you leave behind should you die. A living trust details how and when heirs are to receive their inheritance, who is to take over any businesses in question, and many crucial issues of your estate. A living trust is very specific in how an estate is to be dealt with. Therefore, the choice of a trustee for your living will is a very important decision in your estate planning process.

Living Trusts: Choosing a Trusted Friend
When choosing a person to be the trustee of your living will, you need to answer on question:

• Who could step into my place and confidently act as I would in carrying out my wishes?  

It is vitally important to choose someone that you have full faith and confidence in. You should feel at ease that he or she would carry out your requests as they are written in your estate planning documents. Some typical choices include a:

• Close family friend 
• Close family member 
• Child 
• Professional trustee

While you may feel completely secure in trusting this huge responsibility for carrying out your wishes to a family member, there are several situations when that is not wise or possible. In that case, your estate planning wishes can be addressed by a trusted outsider.

Living Trusts: Choosing an Outside Trustee
If you do not have a close friend or relative that you feel comfortable leaving this job to, or if by selecting one of the heirs will cause conflict, then there are other options. You can hire an outside trustee like:

• Your bank 
• A trust company 
• Your lawyer 
• A financial advisor

These professionals are well versed in what it requires to be a trustee and can often work more expediently and effectively, which saves the heirs money and time. While there are many benefits to not having a family member involved as the trustee of your living trust; there are also some drawbacks to using a bank or trust company as your trustee.

• Higher fees 
• Minimal estate value of around $700,000

No matter whom you choose, you want to be sure that you have full confidence in them to do exactly as you want, no matter what other people say. There may be heirs who are unhappy with the terms and conditions of the living trust and will try to sway your representative to do as they want. Knowing that you have a strong, trustworthy individual protecting your wishes will provide peace of mind.

If you have any questions, contact Fredrick P. Niemann, Esq. at 732-863-9900, or fniemann@hnlawfirm.com.  He is happy to answer your inquiries.