New Jersey Wills vs. Trusts
Navigating New Jersey estate planning doesn’t have to be overwhelming. The Garden State offers unique estate planning features including inheritance tax exemptions for close family members, special probate allowances for surviving spouses, and recognition of holographic wills. With New Jersey’s specific rules for estates and inheritance, understanding the key differences between wills vs trusts can save your family significant time, money, and stress while preserving your legacy.
Table of Contents
US Map For The Different Will and Trust Requirements by State
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New Jersey Will Requirements
A New Jersey Last Will and Testament should include:
- Age and Capacity: Testator must be “of sound mind” and at least 18 years old
- Format: Must be in writing
- Intent: Must clearly indicate that it is intended as a will
- Signature: Must be signed by the testator (or by someone else in the testator’s presence and at the testator’s request)
- Witnesses: Must be attested by two competent witnesses
Witness Requirements
For New Jersey wills:
- Witnesses must actually observe the testator’s signature or hear the testator affirm that the document is intended as a will
- Witness signatures must be included within a reasonable time after the witness observes the testator’s signature or hears the testator’s acknowledgement
- Though disinterested witnesses are generally preferable, a New Jersey will is not invalid just because it is attested by a witness who has an interest in the will
Incorporation by Reference
New Jersey law permits wills to incorporate other existing documents by reference:
- The document must be sufficiently described to allow identification
- Incorporation of personal property memoranda by reference is expressly authorized for specific bequests of tangible personal property items
- Personal property memoranda must be in the testator’s handwriting or signed by the testator
- Memoranda must identify relevant items with reasonable certainty
- A personal property memorandum may be prepared before or after execution of a will and can be altered by the testator
Self-Proved Wills
Wills in New Jersey do not technically need to be notarized. However, New Jersey wills can be made “self-proved” if the will is accompanied by a statutorily compliant self-proving affidavit:
- The notarized affidavit must be signed by the testator and witnesses
- The affidavit must state that the testator signed the will willingly and had legal capacity to create the will when signing
- The New Jersey legislature publishes a form self-proved affidavit within the New Jersey Statutes, at Title 3B, §§3-4, 3-5
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Amendment, Revision, and Revocation of New Jersey Wills
Amending a New Jersey Will
Provisions of a New Jersey will cannot be altered except via:
- Execution of a codicil (a separate document that revises the terms of an existing will)
- Execution of another will
A codicil can be used to amend a will as long as it is signed, dated, and otherwise satisfies all formalities required for creation of a will.
Revoking a New Jersey Will
A New Jersey will can be revoked through:
- Execution of a new will expressing the intent to revoke the prior will
- Intentional physical destruction of the document (such as through burning, tearing, or shredding)
The destruction must be accomplished by the testator or by someone else acting at the testator’s direction while in the testator’s presence.
Implied Revocation
If a later-executed will is not clear as to whether a prior will is being revoked:
- The earlier will is considered revoked if the later will disposes of substantially all of the testator’s assets
- If a later-executed will does not address portions of the estate, then it is treated as a supplement to the earlier will
- The later will takes precedence if there are any conflicting provisions between the two
Automatic Revocation by Divorce
Provisions of a will executed prior to a divorce are deemed under New Jersey law to have been revoked to the extent the provisions include:
- Dispositions of property to the former spouse
- Appointment or nomination of the former spouse (or relative of the former spouse) in any fiduciary or representative capacity
However, will provisions relating to a former spouse are not revoked if the will or a court order or property settlement agreement expresses a contrary intent.
Holographic and Oral Wills
Holographic Wills
Under New Jersey law, a document intended as a will but not properly witnessed is admissible as a valid will in probate if all material provisions are recognizably written in the testator’s own handwriting.
Harmless Error Rule
Additionally, a document that does not meet the formal requirements for a New Jersey will or a holographic will may be treated as a valid testamentary document if a proponent of the document can establish through clear and convincing evidence that the document was intended as the decedent’s will or an amendment, revocation, or revival of the decedent’s will.
Oral Wills
New Jersey law does not recognize oral (or “nuncupative”) wills.
New Jersey Trust Requirements
The New Jersey Legislature has adopted the Uniform Trust Code approach to trusts, subject to a few modifications.
Types of New Jersey Trusts
New Jersey law allows for a variety of trusts, including:
- Special needs trusts that provide for beneficiaries without jeopardizing eligibility for Medicaid
- Spendthrift trusts that can’t be reached by beneficiary creditors
- Charitable trusts that provide support for a charitable purpose and often confer estate-tax advantages
- Trusts for the care of animals
- Discretionary trusts that give trustees significant flexibility over distributions
Requirements for a Valid New Jersey Trust
To create a valid trust in New Jersey:
- The grantor must have sufficient capacity (must be an adult of sound mind when creating the trust)
- Creation of a New Jersey trust must be evidenced by a written document
- The trust must have a named trustee with actual duties to perform
- The trust must have at least one identifiable beneficiary
- Some sort of property must be formally transferred into the trust
Beneficiary Requirements
- At least one beneficiary of a New Jersey trust must be ascertainable, subject to a few exceptions such as charitable trusts and trusts for the care of animals
- The same person cannot be the sole beneficiary and sole trustee of a New Jersey trust
Trust Creation Methods
A trust becomes effective when:
- The settlor transfers title to property to a trustee for a beneficiary’s benefit
- The grantor declares that he or she holds property as trustee for someone else’s benefit
- Upon execution of a written appointment of a trustee
Trust Purpose and Trustee Duties
- New Jersey trusts can be used for any purpose that is not impossible, unlawful, or contrary to the state’s public policy
- Trustees are obligated under New Jersey law to act in good faith with undivided loyalty to beneficiaries
- Trustees must exercise reasonable prudence in managing trust assets
Trust Termination
New Jersey trusts terminate upon:
- Revocation or expiration under the terms of the trust instrument
- Termination by a trustee empowered to terminate the trust
- If the purpose of the trust becomes impossible, unlawful, or uneconomical
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Special Considerations
Estate Taxes
No State Estate Tax
The New Jersey legislature repealed New Jersey’s state-level estate tax effective beginning in 2018. Large New Jersey estates may still qualify for the federal estate tax.
Inheritance Tax
State Inheritance Tax
New Jersey imposes a tax on inheritances ranging from 11 to 16 percent. The precise amount depends on the value of the inheritance and the heir’s relationship to the decedent:
Exempt from Inheritance Tax:
- Spouses and domestic partners
- Direct descendants (i.e., children, grandchildren)
- Parents of a decedent
- Religious and charitable institutions
Partial Exemptions:
- Siblings and sons-/daughters-in-law are exempt up to $25,000
Tax Rates for Other Heirs:
- 15% up to $700,000
- 16% for any additional amounts
Simplified Probate
Small Estate Procedures
New Jersey law provides a simplified probate process for small estates:
- For estates with surviving spouses: A married decedent’s estate can qualify for summary probate if the value of the probate estate is $50,000 or less and the surviving spouse is entitled to the entire estate
- For estates without surviving spouses: If the decedent does not leave a surviving spouse, an heir (with the consent of any other heirs) can request summary probate if the probate estate has a value of $20,000 or less
Important note: Simplified probate is only permitted for intestate estates. If a decedent leaves a will, the estate goes through standard probate in the Surrogate’s Court.
Non-Probate Transfers
No TOD Deeds or Vehicle Titles
New Jersey does not recognize TOD designations on vehicle titles or real estate deeds.
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Wills vs. Trusts: Comparison
| Feature | Wills | Trusts |
|---|---|---|
| When It Takes Effect | After death | Can be immediate (living trust) or after death (testamentary trust) |
| Probate Process | Requires probate | Assets in trust avoid probate |
| Privacy | Public record | Generally private |
| Challenges | Can be challenged in probate court | More difficult to challenge |
| Cost to Create | Generally less expensive | Usually more expensive |
| Ongoing Administration | None until death | May require ongoing management |
| Protection During Incapacity | None (requires separate power of attorney) | Can provide management if grantor becomes incapacitated |
| New Jersey Special Feature | Recognizes holographic wills and has “harmless error” rule | Can help avoid NJ inheritance tax for non-exempt beneficiaries |
Conclusion
Creating a will or trust does not have to be difficult or intimidating for New Jersey residents. However, certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests—can add complexity and result in unforeseen consequences.
New Jersey offers unique estate planning considerations including its inheritance tax (with exemptions for close family members), recognition of holographic wills, and special needs trust protections. While the state no longer imposes an estate tax, proper planning remains essential to minimize inheritance taxes and ensure your assets pass according to your wishes. When any out-of-the-ordinary issues are present, it’s advisable to consult with an experienced attorney familiar with and licensed under New Jersey law to ensure your estate plan takes full advantage of the state’s provisions while avoiding potential pitfalls.
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FAQs: New Jersey Wills and Trusts
Q: What are the requirements for a valid will in New Jersey?
A: A New Jersey will must be in writing, signed by the testator (or by someone else at the testator’s direction and in their presence), and witnessed by at least two competent people. The document must clearly indicate it is intended as a will, and the testator must be at least 18 years old and of sound mind.
Q: Does New Jersey have an inheritance tax?
A: Yes, New Jersey imposes an inheritance tax ranging from 11% to 16%, depending on the heir’s relationship to the deceased. Spouses, domestic partners, children, parents, and charities are exempt. Siblings and children-in-law have a $25,000 exemption, while other beneficiaries pay 15% up to $700,000 and 16% on amounts over that.
Q: Are handwritten wills valid in New Jersey?
A: Yes, New Jersey recognizes holographic (handwritten) wills as valid even without witnesses, provided all material provisions are recognizably in the testator’s handwriting. Additionally, under the “harmless error” rule, a document not meeting formal will requirements may still be valid if clear and convincing evidence shows it was intended as a will.
Q: Can I avoid probate with a small estate in New Jersey?
A: Yes, New Jersey offers simplified probate for small estates, but only for intestate estates (those without a will). If a surviving spouse is entitled to the entire estate and its value is $50,000 or less, summary probate is available. Without a surviving spouse, the threshold is $20,000. Estates with wills must go through standard probate.
Q: How are surviving spouses protected under New Jersey law?
A: New Jersey protects surviving spouses through an elective share right of one-third of the deceased spouse’s “augmented estate,” which includes probate assets, some jointly owned property, and certain transfers made during life. This protection is need-based and only available if the couple wasn’t separated at death.
Q: Does New Jersey recognize transfer-on-death deeds for real estate?
A: No, New Jersey does not recognize transfer-on-death (TOD) designations for real estate deeds or vehicle titles. To transfer real property outside of probate in New Jersey, options include joint ownership with right of survivorship, living trusts, or lifetime gifts.
