Why should I prepare an estate plan?
An estate plan is a set of legal documents made with the purpose of explaining your wishes and executing those wishes in the event you pass on. Put another way, estate plan documents can be understood as a set of instructions to take the place of your own words and directions in moments when you are unable to communicate.
Without an estate plan — or without a legally enforceable, up-to-date estate plan — your wishes will not be understood, and they may not be carried out as intended. In many cases, your loved ones will have their hands tied when trying to fulfill what you might have wanted to happen in these moments. Further, for the aspects they will retain control of, such as your funeral arrangements, they will be left guessing what you would have wanted based on previous conversations and communications.
Going beyond the immediate effects, an estate plan acts like a fulfillment of your life, legacy, and values during times when you need it most. You can create instructions to form a charity from your estate, provide instructions about handling your remains, and generally leave behind a world that’s better than the one you came into, all thanks to your careful planning.
Speak to an experienced estate planning attorney in New Jersey to set goals, get answers to your questions, and prepare a set of documents worthy of a life of hard, caring work. Building an estate plan with an attorney’s help can allow you to address the following scenarios in the event of your death.
One of the most immediate roles of a will is to discuss, in specificity, the entirety of what your estate will constitute and how the contents of your estate will be distributed. Without these declarations, your estate will be declared intestate. The laws of intestate succession in New Jersey declare that, in most situations, your property will be inherited in whole by your surviving spouse and/or your surviving descendants. Your parents or siblings may also be the recipients if there is not a surviving spouse or surviving descendants.
While this arrangement may not sound so bad, consider a few things. First, all property directly inherited will be subject to taxes. The tax burden may force your beneficiaries to sell property like your primary home or your business in order to free up funds. Your family members and other survivors may also feel bitter or competitive about the estate, leading to potential infighting or even legal action, in some cases.
Put simply, dying without a will is undesirable. It leaves behind confusion and anguish for your survivors, and it leaves behind many opportunities to preserve your estate and your legacy in ways you would find more fulfilling.
When someone passes without having a valid will in New Jersey, then the state determines who is the most appropriate person to act as administrator of the estate. Typically, a surviving spouse will be chosen. However, the surviving spouse may decline to fulfill this role. In that event, the state will name the next-of-kin who is most eligible to serve as administrator, and so forth.
Just as in an intestate inheritance, you may have specific plans in mind for who you feel is best-equipped to act as your administrator and executor. It may be your most-faithful child, or it may be a trusted attorney or accountant with whom you’ve worked for years. These individuals likely won’t get the opportunity to serve in the position you have elected for them without having an estate plan that names them, specifically.
Without a trusted individual serving as your administrator or executor, there may be unintended outcomes with how your estate is handled and how your final wishes are carried out.
Within an estate plan, guardianship can be legally assigned for minors, family members with disabilities in your care, and other dependents who will legally require a guardian in order to survive and thrive.
Again, without the proper designations, the state will be forced to determine the most appropriate guardian for a dependent. What may end up happening is an inappropriate guardian is selected, or the dependent could even become a ward of the state, in extreme situations.
Inheritance taxes can be mitigated through a variety of estate tax planning strategies, not the least of which is strategic trust formation. You could also take advantage of gift taxes, generation-skipping transfer tax exemptions, and portability strategies that allow your spouse to exempt much or all of the taxes owed.
Creating a charitable gift plan is one of the most important estate planning activities for individuals who wish to leave behind a specific legacy. Creating certain arrangements prior to your passing, such as a charitable gift annuity or a charitable lead trust, can not only donate funds to needy non-profit organizations, but it can also defer or exempt taxes for specific non-charitable beneficiaries.
Charitable planning can involve some complex aspects of both financial accounting and tax law. Setting up the most appropriate instruments depends upon understanding your goals and laying the groundwork well in advance of your passing. With the right advance planning, you can leave behind a world that is better for your generosity and calculated forethought.
You Want to Assign Someone With Durable Power of Attorney (POA) to Manage Your Business, Finances, or Other Matters After Your Passing
Estate planning can involve the creation of a living will, as well as a last will and testament. Among the most important preparations is assigning durable power of attorney to a trusted family member or professional, who will manage your business, finance, or medical needs according to your stated instructions.
The exact powers and permissions granted can vary greatly according to the wording of your documents. Further, you want to ensure that your instructions are legally valid and provide the powers and permissions you intended to assign so that the people you trust most can be able to fulfill their duties as intended.
Find Out What You Need to Include in Your Estate Plan by Talking With New Jersey Estate Planning Attorneys
VanDyck Law Group provides client-focused service with the aim of defining and achieving your goals for this life. Our extensive experience with estate tax planning, charitable planning, and other aspects of estate planning uniquely positions us to assist you.
Learn how we can help — and why estate planning is so important in the first place — during your confidential, no-risk initial case review. Call (609) 293-2562 or contact us online to schedule your consultation appointment with a New Jersey estate planning lawyer now.