Do You Have an Estate Plan?
Updated: Jul 3, 2019
Estate planning is one of the most important steps anyone can take to make sure their final wishes are honored and their loved ones are provided for in their absence. It’s your ideal opportunity to make personal decisions concerning your assets, finances and health care.
Putting a comprehensive estate plan in place – regardless of your age or net worth –will provide answers to the most critical legal questions when you die. It will clarify the state of your financial affairs, the real and personal property you own and declare who gets what. It will indicate who you’ve appointed as guardian for your children and outline your funeral arrangements. This is also the time to think about who you would trust to handle your business affairs and medical care if you become incapacitated.
It's never too early to start planning. Take stock of your assets, including investments, retirement accounts, insurance policies, real estate, business interests and items that have value to you. This can range from jewelry, cars and artwork to your prized baseball card collection. Then decide what you want to achieve with those assets and who you would like to inherit them.
After you decide what gifts you want to make to your beneficiaries, discuss them with everyone involved. The sooner you outline your intentions to your family and friends, the less chance there will be for disagreements after you're gone.
Here are some of the basics to consider as part of your estate planning:
Make a will. A will is the cornerstone of estate planning and everybody should have one. You will designate an executor, state who you want to inherit your property (real property and personal property) and, if appropriate, name your preference for a guardian to care for your young children.
Make health care directives. Writing out your wishes for health care can protect you if you become unable to make medical decisions for yourself. Health care directives include a health care declaration ("living will") and a health care proxy (sometimes called a power of attorney) for health care, which gives someone you choose the power to make decisions if you can't and makes sure that medical providers follow your instructions.
Designate a financial power of attorney. You can give a trusted person authority to handle your finances and property if you become incapacitated. Another option is to have the power of attorney take effect immediately (known as a durable power of attorney).
Protect your children's property. If you children are minors, it’s advisable to name an adult as trustee to manage any money and property they may inherit from you.
File beneficiary forms. Naming beneficiaries for bank accounts and retirement plans allows the funds to skip the probate process.
Consider life insurance. If you have young children, own a house or may owe significant debts or estate tax when you die, a life insurance policy could be a good idea.
Understand estate taxes. Estate taxes come into play after your death. In 2016, a deceased's estate is subject to federal estate tax only if it worth more than $5.45 million. New Jersey currently has its own estate tax but it will go from $675,000 to $2 million as of Jan. 1 2017 and will be repealed entirely as of Jan. 1 2018.
New Jersey also has an inheritance tax; but you can leave an unlimited amount of money to your spouse and children tax-free. Your daughter’s husband, for example, would have to pay some taxes.
Make final arrangements. This includes your wishes regarding organ donation, burial or cremation, as well as making sure that your funeral expenses are covered.
Estate planning can be complicated, so it’s wise to work with an experienced attorney who can explain all options available to you. Whether you need to revise an existing will or create a comprehensive plan from scratch, please don’t hesitate to call me at (973) 509-8500 x213 or write me at LFarber@LFarberLaw.com.
The contents of this writing are intended for general information purposes only and should not be construed as legal advice or opinion in any specific facts or circumstances.