Wills & Estates
What is an Estate Plan?
Lawyers are often asked, “What is an Estate Plan?” A short answer: Planning an Estate is a demonstration of love and affection for the natural objects of your bounty. It is the care of your family. It is assurance that your children are educated, protected and nurtured. So, you should have an Estate Plan. Many people do not even consider this and leave this world intestate. Without a proper Will, your family could suffer unnecessarily.
Consider what makes up your estate:
1. Your home and other real estate
2. Tangible personal property such as cars, furniture, antiques, oriental rugs, collections, tools, power equipment
An Estate Plan is your map of where your assets will go after your death.
Where do you begin?
You are not too young to make a Will or plan an Estate. Estate planning is not for older people only. Many young and middle aged people die suddenly, often accidentally. They leave behind minor children who are now in greater need of care and direction. Who will be responsible for them? There is really no need to worry. The courts are very capable of handling this without your input. However, if you do not want the court overseeing the care of your children, plan your Estate. Estate planning should be part of your overall financial plan along with your children’s college tuition and your retirement needs. If circumstances change, it is easy and rather inexpensive to change your Estate Plan. In fact, younger people often need an Estate Plan more than older people as employment benefits for a non-retired employee can be huge.
What happens if you do not plan? If you die without a Will or a Trust to control your assets, you have elected to have the State of New Jersey “write your Will”. This means New Jersey will make certain assumptions about where you would like your money to go. You probably would not agree with these assumptions, but nevertheless, that is where it is going. It is possible some of your money will end up with people you do not want to have it, while others who really need it will be shortchanged. Also, you have left the ability for your relatives and survivors to bicker and fight and run up legal bills about who will get particular items of your property. If you made these decisions in your lifetime, there would be no questions to fight over.
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TEN THINGS AN ESTATE PLANNER CAN DO FOR YOU
1. PROVIDE FOR YOUR IMMEDIATE FAMILY. Couples with children can make some assurance for their children’s upbringing if they both die. There should be a provision for the surviving spouse. Name the personal guardians of the children and name who will take care of their funds for them until they grow up. What do you mean by growing up? Eighteen years of age? Twenty-one? Twenty-four? Thirty-five?
2. TRANSFER PROPERTY QUICKLY. There are means to have money transferred quickly without waiting to go through an entire accounting.
3. PLAN FOR YOUR INCAPACITY. While planning your Estate, do not forget to consider your possible mental or physical incapacity. There are so many things that could occur such as accidents, stroke and the like. Do not wait until your children have to approach the court seeking to have a parent declared incompetent. It is a miserable and unhappy experience. Instead, you should prepare a General Durable Power of Attorney appointing someone with whom you have a special trust and confidence. Prepare a Living Will appointing a healthcare representative and making decisions about life support and your medical treatment concerning artificial sustaining of life.
4. MINIMIZE EXPENSES. Estate Planning will minimize the cost of transferring property to beneficiaries, leaving more money for your beneficiaries. If you did not appoint Executors and state that they should serve without bond, they must post an Administration Bond which can be expensive.
5. SELECT AN EXECUTOR. Choosing a competent Executor or Trustee and giving them the necessary broad power and authority, will save money, reduce the burden on the survivors and simplify the administration of your Estate.
6. EASE THE STRAIN ON YOUR FAMILY. You can ease the burden of your grieving survivors by making your funeral arrangements in your Estate Plan. Or, you may wish to simply make a few minor instructions and limit the expense of your funeral service.
7. HELP A FAVORITE CAUSE. Your Estate Plan can support research, scholarships, religious and educational institutions, or other charities. You can do this in your lifetime and also upon your death and at the same time take advantage of tax laws designed to encourage philanthropic endeavors.
8. REDUCE TAXES ON YOUR ESTATE. This is the most important part of your Estate Plan. Every dollar your Estate has to pay in Inheritance Taxes is one dollar that your beneficiaries will not realize. A good Estate Plan can provide the maximum allowed by law to the beneficiaries and the minimum to the government. It is possible to leave everything to your spouse and there will not be even one penny due in taxes, no matter how huge your Estate is. However, at such time as your spouse then leaves this world, taxes can and often do, exceed fifty-five percent of what you have left! If you die a millionaire without a will, you can be sure your children will not be millionaires.
9. PROVIDE FOR PEOPLE WHO NEED HELP AND GUIDANCE. If you have an elderly parent, a disabled child, a grandchild whose education you want to assure, you can establish a special trust or provision for these people. If you do not provide for the lifetime care of a family member with special needs, the courts may be deciding your loved one’s future.
10. MAKE SURE YOUR BUSINESS CONTINUES SMOOTHLY. If you are in a small business, or even a large business, you can provide for an orderly succession of management and a continuation for the affairs of the business and assure your obligation to your employees by spelling out what will happen to your business interest.