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New Jersey Estate Planning Blog

Without current beneficiary information, probate court decides

  • 28
  • March
    2015

Organization and periodic review are two topics that should always be associated with the creation and maintenance of a proper estate plan. Without these two practices, it is all too easy for the wishes of a New Jersey resident to fall by the wayside. Over the course of a lifetime, many individuals will obtain a wide variety of assets, including various insurance policies. Ensuring that the beneficiaries for those assets are up-to-date is an essential aspect of good estate planning. Absent such measures, the division of one's estate can be left in the hands of a probate court.

An example is found in the estate of a man who passed away in 2011. The man had purchased two life insurance policies in 1999 and named the same three beneficiaries for each policy. However, within the same policy, he made note of his plan to establish a trust that would then become the beneficiary of the policies, and that the same three people would then become the beneficiaries of that trust. Later that year, the man made the change and designated the trust as the beneficiary of both policies.

Seek cohesion within estate planning efforts

  • 26
  • March
    2015

When planning for the distribution of one's assets upon death, many New Jersey residents make the mistake of taking a piecemeal approach to the matter. They may draft a will in which they outline how they would like their assets to pass to the designated heirs, which is an important step within estate planning. However, there may be a range of assets that have named beneficiaries, such as bank accounts, investment accounts, life insurance and more. In addition, many individuals name their children or others as joint owners on certain assets, such as their home. This approach can lead to a wide range of problems.

Having a will in place does not change how assets with a named beneficiary will be distributed. Therefore, if the goal is to divide all assets equally between one's children, and one of those children is also named as a beneficiary on one or more accounts, then the end result will be that child receiving one third share of the assets that go through probate, in addition to the full value of the assets held in the separate accounts. This can lead to a high level of contention between siblings, and such matters often end up in court.

Estate planning is a marathon, not a sprint

  • 22
  • March
    2015

When many New Jersey residents complete their estate planning packages, they feel overwhelming senses of relief at having handled such an important task. Often, they then place those documents into safes or file cabinets and move on to other projects. It is important to realize that estate planning is not a one-time event, and a properly structured estate plan must be revisited from time to time. In other words, simply having these documents in hand is not sufficient to ensure that one's wishes are followed when the time comes.

A prime example is planning for the cost of long-term care needs. For those who own a business and wish to pass that business along to their children, it is imperative that the appropriate assets are shielded by a life estate deed or similar planning tool. This ensures that if the owner becomes ill or otherwise incapacitated, the business and related assets will be protected.

Providing for pets during estate planning

  • 20
  • March
    2015

Many New Jersey residents consider their pets as members of the family and would go to great lengths to ensure that they are happy and healthy. However, many fail to consider what would happen to their beloved animals in the event of the owner's death. Including pets within one's estate planning is an attainable goal and is also an incredible gift that pet owners can give their furry family members.

One way to include pets within one's estate plan is the creation of a special pet trust. This solution requires a significant investment of time and effort, however, and is best suited for animals that require expensive and highly specialized care, such as horses or rare pets. For owners of beloved cats and dogs, a simplified approach is often the best possible solution.

Charitable giving and estate planning options

  • 13
  • March
    2015

Many New Jersey residents have a long history of giving their time and money to various charities. It comes as no surprise that those same individuals would like to include their favorite charitable organizations within their estate planning. There are also a number of tax benefits that can accompany charitable giving, many of which yield benefits during the life of the giver. Understanding the various options is important when determining how to work charity into one's greater estate plan.

One way to pass assets on to a favorite charity is by naming the organization as the "transfer on death" or TOD beneficiary. This can be done with a piece of personal property such as a car, boat or recreational vehicle. It is also an effective strategy for various savings or investment accounts. At the time of the holder's death, the assets will pass immediately to the named beneficiary, in this case the charitable organization.

Factoring risk of divorce into estate planning and trusts

  • 11
  • March
    2015

The creation of a comprehensive estate plan is in effect a gift that an individual gives to his or her loved ones. By carefully structuring the means by which assets will be distributed after one's death, a great deal of stress and turmoil can be reduced for those left behind. However, there are certain areas of estate planning that offer a challenge to New Jersey residents. Addressing the risk of divorce is a prime example.

Many individuals wish to leave assets to a family member within a trust. It is understood that the spouse of said family member will also benefit from the gift. However, should a loved one eventually divorce, a portion of that gift could be lost within the property division process of the divorce. This is unacceptable to many in New Jersey, but in order to prevent such an outcome, careful planning steps must be taken.

Estate planning tips to help avoid family conflict

  • 04
  • March
    2015

When a loved one passes away, those left behind are often very distressed. This is a time when emotions and tensions run high, and when conflict between family members in New Jersey can easily flare up. When it comes to estate planning, there are several tips that individuals and families can implement to offset the risk of family feuds. Doing so can make this challenging time far easier to weather for all involved.

One common mistake that people make within their estate plan is to select the wrong person to act as executor of their estate. For example, many families will select the oldest child to handle these matters, even though that individual may have a long history of contention with his or her spouse or other family members. Giving that party control over the estate can lead to a great deal of tension and resentment among surviving family members, and can even lead the parties to head to court to resolve certain conflicts. A better approach is to choose a more level-headed family member or even an unrelated but trusted friend to handle the estate.

Blended families have unique estate planning needs

  • 02
  • March
    2015

The shape of the American family is not what it was in generations past. Today's families in New Jersey and across the nation are often comprised of a blend of children from the current and previous unions. This diversity makes family life far more complex and interesting than in previous decades, but it also brings about a range of challenges. One such challenge involves the need to take a carefully considered approach to estate planning, to ensure that everyone's needs are properly addressed.

Consider, as an example, a family in which both spouses bring a child into the marriage. That couple then has a child together. If their estate plan is structured in such a way that the surviving spouse inherits all of the family's assets, a problem could arise in ensuring that all of the children are eventually treated evenly. The surviving spouse could amend his or her own estate plans to disinherit the child of the deceased spouse.

Get an early start on estate tax planning

  • 26
  • February
    2015

Many New Jersey residents have worked hard to build a strong base of wealth. Retaining as much of that wealth as possible becomes a priority for many families. Understanding the proper steps required to do so can be a challenge, as there are a wide range of rules in place that must be carefully adhered to in order to achieve a favorable result. By working with an attorney, individuals and families can create an estate tax planning strategy that meets their needs.

When considering estate planning, many people focus solely on the distribution of wealth to heirs after a death has taken place. While this is one of the primary goals of estate planning, there are many ways to take action to preserve assets and reduce taxes prior to one's death. An example lies in creating and implementing a plan to gift assets to one's chosen heirs, instead of passing that wealth on after death.

Divorce prompts the need for estate planning adjustments

  • 24
  • February
    2015

Many New Jersey residents who have created a solid estate plan feel a significant sense of relief in the knowledge that their wishes are documented in a legal format. However, there are certain life events that necessitate a re evaluation of existing estate planning measures. The end of a marriage is one of the most significant changes that can prompt the need to take a second look at one's plan, and to make changes where needed.

Many traditional estate plans are designed to guide the division of marital wealth in the event of the death of one or both spouses. However, when a divorce takes place, the manner in which both parties wish their assets to be passed down will often change. The best way to accomplish this goal is for both spouses to create a new estate planning package.

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