What does an estate plan contain?
More than just a will, an estate plan is a comprehensive set of documents intended to provide legally enforceable instructions in the event of your death — or, in some cases, your medical incapacitation.
Every estate plan is unique, in a sense, but all will at very least contain a last will and testament and other documents needed to properly handle vital affairs. Many estate plans will include instruments dictating the formation of trusts or how existing trusts may change in light of your passing. Through these instructions, you can not only designate what property will be given to specific beneficiaries, but you can also create trusts and other legal arrangements that help you carry out your most-important wishes and aspirations for the world you will leave behind.
There is not one plan or set of instructions that can help an individual create the “perfect” estate plan. Instead, they should consult with a New Jersey estate planning lawyer to discuss their goals and reveal which options are best suited to succeed in those goals. Revisiting the estate plan periodically is also important, especially in the event of major life changes.
Below are some of the most-common components included in an estate plan and how each helps represent the wishes and goals of the person creating it.
One of the most crucial documents to include in your estate plan is a last will and testament. To be legally valid and enforceable in the state of New Jersey, a will must meet the following criteria:
- The document is in writing
- The testator (will creator) is 18 years old or older and has full knowledge, agency, and capacity
- The testator must sign the document
- The signing of the document by the testator must be witnessed by two individuals who are at least age 18, who must then sign the document
- Performing the signing in front of a notary is not necessary, but can help assert the validity of the document
Even under these conditions, there are various possibilities that could make a will be deemed invalid and non-executable under certain circumstances. These include a will that is so out of date that many of its provisions no longer apply (e.g. a majority of the property listed no longer exists), or a will that includes provisions that are unfair, illegal, or unconscionable.
A complete and comprehensive will includes all of the following:
The testator should be clearly identified, along with some personal information that can clear up possible confusion over identity, such as a birth date, current address, etc. The document should also include a clear declaration about the testator’s intent, such as by writing verbatim: “this is my last will and testament.”
The will should clearly delineate all property and assets held by the testator. These items will eventually be distributed to the designated beneficiaries.
Note that all property that is transferred through a will is subject to probate, estate taxes, and in many cases creditor claims, among other possibilities. Individuals wishing to keep their estate private and minimize exposure to diminishment risks may place the majority of their possessions and assets in a trust or an instrument like a transfer-upon-death account. In these cases, the inventory described within the last will and testament may be negligible.
All beneficiaries should be named, with the level of specificity indicated in the declaration, when possible. The will can then describe which contents of their estate will be transferred to which beneficiary.
The administrator of an estate is referred to as an executor in the state of New Jersey when they are designated on the will. This individual will represent your estate in probate proceedings and serve as the representative in other possible legal proceedings. Since these may include claims or legal action against the estate, be sure to name someone in whom you not only trust but who also has the resources to handle potential legal cases, either alone or (more advisably) with the assistance of attorneys.
If you have minor children, relatives with disabilities in your care, or other dependents who lack the capacity to fully care for themselves, then you can designate a guardian for these individuals. Note that you will likely need to prepare more documentation to make your guardianship designations valid and executable, but listing the intended guardians in your will can provide clarity and direction to supplement your other preparations.
Whether trying to minimize the effect of taxation on your estate or create a charitable fund or accomplish other goals, you will be motivated to look into forming a trust or other similar legal entities.
The creation of an irrevocable trust can shield assets from probate, taxation, and creditor claims, in many instances. Further, trusts of all sizes and stripes can be formed to fulfill a specific purpose. For example, perhaps you have relatives or loved ones you want to provide funds to for very specific purposes? Or, you may wish to leave certain assets to a charitable foundation created in your name at the time of your death.
Whatever the goal, there are legal instruments available to help you fulfill them. An estate planning lawyer in New Jersey can help you clearly understand your goals and choose the best options to make them a reality, either before or immediately after your death.
Your estate plan can also include documentation intended to help you designate individuals who can act in your stead and provide specific instructions for medical care, financial administration, and other vital aspects of your life. Simply put, when you are in a medical coma or otherwise unable to do these things, the information in your estate plan ensures you have people to act in your stead.
Documents you may wish to incorporate include:
- Advance medical directives dictating whether you would like the use of a feeding tube or respirator when you have a low chance of medical recovery; can include a do not resuscitate (DNR) order
- Medical power of attorney assigning agency to someone to make medical decisions on your behalf
- Durable financial power of attorney for someone to manage your personal finances and/or business finances while you are incapacitated
If you have concerns about your medical health or would like to prepare for a wide range of possible futures, be sure to speak to an experienced estate planning attorney in New Jersey who can help you anticipate and plan for your potential medical incapacitation.
Every estate plan starts with multiple conversations, long before the first blank page is ever written upon. At VanDyck Law Group, we can help you understand exactly what legal options you have at your disposal and which ones are best suited to help you achieve your vision for the future.
Be prepared, and be up-to-date with periodic reviews, all with our assistance. Start the conversation when you call (609) 293-2562 or contact us online to schedule a confidential consultation, with no obligation.