An effective estate plan is one that addresses disability and incapacity, caters for end-of-life situation, protects assets, and transfers them down to heirs cost-effectively and in the most hitch-free manner possible. While there are many estate planning documents to use for addressing a variety of concerns, the estate planning attorney, NJ, will enlighten you on the most important and effective ones to create, and the foremost things to consider. The following are the essential elements that make up an effective estate plan.
1. Last will
In you Last Will, you state precisely how you want your assets disposed at your death, and those who you want as your heirs. You state clearly in your will which asset will go to each beneficiary. These assets are those outside a trust and those without beneficiary designation. A will must pass through probate. Nevertheless, it is very simple to establish and highly effective.
2. Revocable Living Trust
If you wish to avoid probate, then you should consider creating a revocable living trust. It also helps you appoint a trustee who steps into your shoes should you become physically or mentally ill. The trust can be used alongside a will, for handling those assets which you want to pass outside probate. You can put real estate, bank accounts, cars, etc. into your trust. You can name yourself as your own trustee, directly using the assets in the trust; you also have to name a successor trustee who will step in when you die.
In creating a will, you have to name an executor. The executor should be someone you trust to be competent enough to carry out the instructions of your will when you die. It is often not advised to choose a spouse or child as an executor, as they may be overwhelmed by the grief of your death. A simple estate may require a relative or friend as an executor, but a more complex estate may require a professional. It is advised the executor hires an estate planning attorney for legal assistance.
When parents die leaving minors without considering them in the estate plan, these minors may not get the care and financial protection desired by the deceased parents. This is why you should include Guardianship for minors in your estate plan. It’s also important you plan towards how your insurance policy will be used for the benefit of your minors. Assets can be placed in trust for them as well.
5. Durable powers of attorney
Durable powers of attorney authorize someone to make financial and health care decisions on your behalf when you become unable to make those decisions yourself due to incapacity or disability. The person is bound by law to uphold his or her fiduciary duties to you. We have two types viz.:
- Financial power of attorney – with which you appoint a person who would step in your shoes to make financial decisions and handle your business for you. It is important as it gives you the chance to appoint a trusted and competent individual.
- Medical power of attorney – with which you appoint a person to make medical decisions for you during your incapacity.
6. Tax planning
An effective estate plan is one which also addresses estate taxes, and greatly minimizes them. Wealthy estates can incur huge federal and state estate taxes if they value beyond the threshold of the state in which they are located. A good estate plan that offers minimal tax can be drafted by the estate planning attorney in New Jersey.
The federal state estate tax threshold is currently $11.58. If your estate values above this, then kindly discuss with the estate planning attorney NJ on how to lower your estate value below this threshold.
7. Advance health care directive
Also known as a living will, an advance health care directive spells out your requirement for your end-of-life situation; that is, what you want to be administered to you when you become terminally ill or in a vegetable state. Would you want to be put on oxygen, a feeding tube, or not?
The estate planning attorney NJ helps you ensure your estate plan is effective
Some people often fail to consider some of these things, and simply settle for a will. A will doesn’t cover tax planning, probate avoidance, insurance policies, estates owned in multiple states, and so many other things. The estate planning attorney NJ will help you create an estate plan that is highly effective to address each of these concerns, and is acceptable in New Jersey. Contact the estate planning lawyer today.