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Title and Homeowners Insurance: Knowing the Difference, Why You Need Both

Jan 18 2016
Written by Jason C. Henbest, Esq. and Brittany Saxton

In today’s world, the word insurance is used in various capacities.  Car, travel, and life insurance are popular ways to protect yourself and your assets.  There is also insurance available for real property, as all home purchasers know.  For new prospective buyers, it is important to familiarize yourself with the types of insurance involved with real estate.

Two common types of insurance involved with a home purchase are title insurance and homeowner’s insurance.  Each type of insurance serves different functions.  Title insurance involves claims against the buyer’s ownership of the property.  Homeowner’s insurance protects loss or damage to the property itself and claims made against the owner of a property for injuries.  Even though these insurances serve different purposes, some people still question: do I really need to have both? 

Homeowners are strongly encouraged to purchase title, on top of homeowner’s insurance, for numerous reasons.  Yes, homeowner’s insurance covers the cost of physical damage to the property—such as theft, vandalism, and injury—but title insurance ensures the future sale of a property.  While homeowner’s insurance provides financial protection against disaster, it does not provide financial protection against a smooth transaction on the future sale of your home.  Not every person, nor every family, wants to live in the same place their whole lives.  Title insurance guarantees true entitlement to the property, effectively preventing anyone else from claiming title to the property where your home is located.  In order for the current buyer, and potential future seller, to be protected against liens on the property, title insurance is essential.

In the legal and financial role as a homeowner, learn to understand how both title and homeowner’s insurance can protect you.  Whether you are purchasing a home for the first or fifth time, come into our Barnegat office to speak with an experienced real estate attorney about the real estate process today. 

Forgetting to Change a Will in the Event of Divorce

Jan 04 2016

Written by Jason C. Henbest, Esq. and Brittany Saxton

Married couples that make estate plans typically designate their spouse as the primary beneficiary and executor of their Will. When creating their estate plans, most couples do not have a reason to believe they will end up separated. But unfortunately, some couples decide they have irreconcilable differences and end up getting divorced.

In the case of divorce, it is recommended that each individual update their estate plan with a qualified attorney to recognize the significant change that has taken place. However, there have been cases where a client fails to update their estate plan, and at the time of death everything is left to the ex-spouse. New Jersey has statute N.J.S.A. 3B: 3-14 which states that in the event of divorce, provisions that once benefitted the ex-spouse are essentially dissolved as if the former spouse disclaimed the bequests. In this case, the bequests pass over the spouse and are divided among the remaining beneficiaries. The same is true in the case of having named an ex-spouse as executor of a Will; the successor executor would be the primary point of contact to probate the Will. Statute N.J.S.A. 3B:3-14 also revokes the ex-spouse’s beneficiary designation to life insurance claims, as well as survivorship rights in jointly held property.

While a divorce nullifies the ex-spouse as a beneficiary of the estate, life insurance, executor of a Will, and survivorship rights of property, a divorce does not remove former spouses from inheriting retirement plans. This is one of many reasons that it is crucial to keep estate plans up to date amidst major life changes. The law intends to protect people, but it does not serve as a replacement for the personal responsibility of updating estate planning documents and beneficiary designations.

It is never too early to make sure you are creating an estate plan. Regardless of the extent of your assets, having your wishes in writing will save you and your loved ones from future headaches. Whether you are recently divorced or are similarly interested in creating new or reviewing your estate planning documents, come into our Barnegat office to speak with a qualified attorney about your estate plan, today.

Why Homeowners Choose to Lease

Dec 23 2015
Written by Jason C. Henbest, Esq. and Brittany Saxton

Becoming a homeowner is a big undertaking. And sometimes, to ease the burden of homeownership, many homeowners decide to rent all or part of their property to prospective tenants. Most homeowners rent a portion of their space to relieve the financial burden of a costly mortgage payment. However, others use the increased income from a tenant’s rental payments for vacations, home renovation projects, or retirement funds. Whatever the reason behind a homeowner’s decision to rent out space, it is important to understand the legal implications of entering a landlord-tenant agreement, especially if this is your first time being a landlord.

Each state has unique landlord-tenant laws. In New Jersey, the State Department of Community Affairs has an abundance of information and paperwork regarding landlord-tenant information (see link below). The Legal Services of New Jersey also has a helpful website for understanding the legality behind every facet of landlord-tenant relationships (see additional link below). Likewise, realtor associations may be able to provide the appropriate paperwork. 
However, your most valuable resource is a well-qualified attorney. Lawyers who are familiar with landlord-tenant law can provide you with information regarding leases, rents, security deposits, potential evictions, and the like. Come to our Barnegat office to discuss your options—and the appropriate course of action—as a potential landlord, today!

What is a Certificate of Occupancy?

Dec 21 2015
Written by Jason C. Henbest, Esq. and Brittany Saxton

What is a Certificate of Occupancy? Commonly referred to as a C.O., a Certificate of Occupancy and a Certificate of Continuing Occupancy determines the legal usage of real estate properties. In the state of New Jersey, a C.O. is required before a real estate closing on new construction occurs. For existing real estate, where property is being sold or leased from one homeowner to another, the circumstances differ. In the instance of existing real estate being resold, mandating the seller to obtain a C.O. is left to the individual municipalities where the property itself is located.

Since each municipality differs in its requirements for a C.O., it is essential for the property owner to understand their municipality’s requirements. For towns in New Jersey that do require a C.O., the seller must complete the application for inspection, issuance of the Certificate, and pay the application fee—on top of understanding the coinciding state mandates. New Jersey requires each property to have a Certificate of Smoke Detector, Carbon Monoxide, and Fire Extinguisher. Failure to obtain the certificates, or a C.O. when required, will result in a fine.

Why Your 30s are the Time to Validate Estate Plans

Jul 16 2015

Written by Jason C. Henbest, Esq. and Brittany Saxton

Planning for your eventual demise by constructing estate plans in your thirties may seem like a morbid thought—and most likely low on your list of priorities.  Yet, financial advisors and estate planning attorneys encourage working on an estate plan during your thirties, if not before then.  For the average American family, your thirties are the time when you most likely have settled down with a partner and have contemplated, if not started, having a family.  Thirty year olds have as much to lose as older Americans, and it is important that these assets are protected.  It is essential to start thinking about your assets and how you can help your family by planning for the future.

Your first step, if you are unsure where to start, is to set up a meeting with a local Ocean County attorney and financial advisor to discuss establishing a Last Will and Testament, Living Will, Durable Power of Attorney, and those documents related to your Life Insurance, Retirement Funds, and the like.  For more information on estate planning for thirty-somethings, contact one of the attorneys at Henbest Law Group.

Filial Responsibility in NJ: Adult Children Supporting Aging Parents

Jul 13 2015
Written by Jason C. Henbest, Esq. and Brittany Saxton

New Jersey is 1 of 29 states to have a filial responsibility law. What is it? Basically, children have a legal responsibility to support their parents when their parents are incapable of financially taking care of themselves. It is legally well established that parents have the responsibility to support their children in various capacities—one of the most important being financial support. In legal terms, the reverse can be true as well.

Filial responsibility laws are not new; they go back to 16th century England. The States adopted these laws to require children pay for their parents’ hospital, nursing home, and long-term care bills. In the past, filial responsibility laws have been weakly enforced. Yet, this trend of weak legal enforcement is one that could change at any time.

The good news about filial responsibility: it applies only if your parent has to accept financial support from the government, or they are unable to pay their medical or nursing home bills. While failure to act in accordance with filial responsibility laws may lead to criminal penalties, not every adult child must pay. If you have extenuating circumstances, such as paying significant costs for your own child, barely making ends meet, or a history of parental abuse or abandonment, the courts typically do not hold you responsible.

Why Buying a Home is Currently Cheaper than Renting

Jul 09 2015
Written by Jason C. Henbest, Esq. and Brittany Saxton

It is often presumed that purchasing a home is a huge fiscal investment in comparison to the ‘smarter, cheaper’ option of renting a home. Clients looking into real estate spend months, sometimes even years, deciding whether they can afford to buy a home based on the location, maintenance, and mortgage costs of a particular property of their interest. It used to be the case that renting was in fact a cheaper option in comparison to buying a home—but not anymore. Owning a home costs less in 97 out of 100 of America’s major metro areas due to three main reasons:

1. Mortgage interest rates: Mortgage interest rates, while no longer at the historic lows of 2012-2013, are still very low. This means your dollar will go further if you are looking to purchase a home.

2. Increased rental demand: Due to former homeowners’ displacement with economic distress, there is an increase in demand for rental properties. The increase in foreclosures has thrust millions of former homeowners into the rental market. Therefore, the desire for rental properties will continue to increase over the coming years.

3. Deflated home prices: In comparison to the ‘boom,’ home prices are a lot lower than they used to be—which is why it is a wise time to invest in a property that you and your family own. The number of distressed homes on the market continues to depress home prices for all sellers. And more distressed properties continue to go on the market.

When you are weighing your options in regards to the prospects of your new home—renting or buying—consider this once in a lifetime opportunity to purchase an affordable piece of real estate. Speak with a local Forked River lawyer to further discuss you and your family’s real estate options.

For Childless Couples: Essential Estate Planning

Jul 05 2015
Written by Jason C. Henbest, Esq. and Brittany Saxton

For a couple with children, designating your spouse, and then children, as beneficiaries of the estate is the most common course of action. However, couples without children usually have questions regarding the future of their assets—and what the ‘appropriate’ course of action entails. Childless couples need to discuss two main topics when debating the future of their estate: property disposition and power of attorney designation.

What happens to your property, or estate, after you pass away is determined by a Last Will and Testament—commonly referred to as a Will. The beneficiaries are people designated in your Will as people who inherit a percentage of or specifically designated items from your estate. The executor is designated in the Last Will and Testament, or by the Court, as the individual in charge of the estate’s finances. People without children often struggle to find potential executors and beneficiaries they completely trust. The most common course of action for childless couples is to execute ‘sweetheart’ wills where each spouse designates their belongings to each other. The second most common approach is transferring assets to a joint revocable living trust—which spells out how the assets will be distributed. A joint revocable living trust can be executed during life or at death. 

NJ Ruling Admits Unsigned Copy of Will to Probate

Jun 29 2015

Written by Jason C. Henbest, Esq. and Brittany Saxton

The law has always been that for writing to be accepted as a Will, it must meet certain formal requirements—such as signatures and witnesses. Over time, exceptions have been recognized, but recently, many states including New Jersey have admitted writings to probate that extend far beyond these formal requirements The ruling of In re Estate of Ehrlich is a pertinent example of how the law is changing and how it could impact you.

The decision in the case of In re Estate of Ehrlich by the New Jersey Appellate Division holds that the adoption of the Uniform Probate Code (UPC) in 1990 provides legal framework to allow the court to admit the unsigned Will in the case of Richard Ehrlich. Mr. Ehrlich was a trust and estate attorney in Burlington County for more than 50 years. Upon his death, the only copy of Ehrlich’s Will was unsigned, but it had proper formality and testamentary intent. Therefore, the probate judge held that Ehrlich’s document was professionally prepared—besides the date of the document and the execution—and admitted the Will to probate.

IRA Beneficiary Form: How One Mistake Could Cost Your Children Thousands

Jun 18 2015
Written by Jason C. Henbest, Esq. and Brittany Saxton

Yahoo! Finance recently posted an article about the estate of Leonard Smith. Smith, who lost his cancer battle in 2008, had a well formulated plan for his retirement fund. But his intended beneficiaries did not get this money due to Smith’s single mistake: improperly filling out his beneficiary forms. (Click here for full article: http://finance.yahoo.com/news/man-s-mistake-cost-his-children--400-000-of-an-ira-inheritance-152712809.html)

It is imperative to learn from Mr. Smith’s error when planning for the future distribution of your assets. Many people assume that once they sign their Will in their attorney’s office the work is done. You should know, as in the case of Leonard Smith that insurance policies, retirement accounts, and the like are secondary to the beneficiaries you have designated for your Will.

If your estate planning lawyer does not talk to you about your beneficiary designations, you might want to discuss your estate plan with a different lawyer. Talk with a licensed New Jersey lawyer to verify your estate plan fits your unique needs and desires.