Jump to Navigation

New Jersey Estate Planning Blog

Celebrity examples of estate planning mistakes

  • 20
  • November
    2014

In virtually any significant social matter, the mistakes of others can present an opportunity to those who are willing to learn from those errors. Such is the case with celebrity estate planning missteps, which are often widely reported in the media. New Jersey residents who follow these matters can learn a great deal about how not to construct their own estate plans, and can use that knowledge to avoid a similar outcome.

Take, for example, the contention and strife that followed the death of Michael Crichton. The successful author made millions of dollars from his popular novels and their movie rights. However, a failure to update his estate plan left his family in a series of bitter battles after his unexpected death.

Document storage an important part of estate planning

  • 18
  • November
    2014

When New Jersey residents go through the process of planning their eventual estate, it is important to remember that these directives can only be put into place if the guiding documentation is available to those who need to take action in the matter. Simply creating these estate planning documents and then stuffing them into a file box is not the best course of action. Individuals must take the proper steps to ensure that their wishes can be carried out in the manner of their choosing.

In regard to a will, the original document must be presented in order to begin the probate process. If the family is unable to present this copy, it may be impossible to carry out the wishes of the deceased. In some cases, a copy or duplicate can be produced, but this can be a difficult process, especially if there is any form of contest to the will as it stands.

Estate planning with a purpose: Creating trust stipulations

  • 13
  • November
    2014

As many in New Jersey consider how to pass on their wealth to loved ones, the issue of responsibility often arises. Parents and grandparents want to create an estate planning package that allows their heirs to access an inheritance, but also want to ensure that those funds are used in a responsible manner. This can pose a challenge, one that is best met by the careful creation of one or more trusts.

Trusts are among the most flexible estate planning tools available. Individuals can structure a trust to guide how and when their chosen heirs can receive funds. The scope of stipulations that can be made is virtually endless, and each family can create a trust that meets their own unique needs.

Estate planning for couples without children

  • 11
  • November
    2014

For the majority of New Jersey residents, the primary focus of their estate planning involves how to pass on their assets to children and grandchildren. However, there are many couples who do not have children, and their estate planning needs are somewhat different. It is easy to assume that a childless couple has less need for a comprehensive estate plan, but this is simply not true. Even when there are no direct descendents in place, individuals still need to create a roadmap for how their assets will be handled in the event of their death.

Without a will or trust in place, the distribution of one's assets will be dictated by state law. This is an outcome that no one desires, as those left behind will have no control over how assets are distributed. In general, the spouse who survives the death of his or her partner will inherit the family's assets. If that individual also dies intestate, his or her surviving relatives will inherit what is left. This leaves the family of the first spouse completely cut out of any inheritance.

Estate planning tips: Common trust fund errors

  • 08
  • November
    2014

Most New Jersey residents are aware of the benefits of establishing one or more trusts. These flexible estate planning tools can help individuals protect assets from excessive taxation and can give families the ability to bypass probate. However, in order to access the full potential of any given trust, it is important to follow some simple guidelines.

For example, many individuals go through the process of establishing a revocable trust, only to fail to properly fund the vehicle. Trusts are only valid when they hold assets. While it may seem obvious that one would go through the motions of funding the trust that was created to meet their needs, it is not unusual to find trusts that were never properly funded and are therefore useless.

Addressing collections within estate planning

  • 06
  • November
    2014

Many New Jersey residents have amassed impressive collections. Some focus on more traditional items, such as stamps or coins, while others favor collections of a more esoteric nature. In fact, some collections are so unique as to lead others to wonder why anyone would choose to hunt for such unusual items. When considering how to pass these collections on to loved ones, individuals have a number of estate planning options.

For many, the value of a collection is not understood by those who stand to inherit the items. This leads to a concern that one's heirs could sell a collection for far less than it is worth, or even dispose of the collection as though it were trash. When an individual has spent years or even decades building a valued collection, this risk is hard to bear.

DIY estate planning, is it worth it?

  • 02
  • November
    2014

The do-it-yourself lifestyle is alive and well here in New Jersey. An increasing number of people are interested in learning how to remodel homes, plant gardens or learn a variety of other valuable skills that will benefit themselves, their families and their pocketbooks. While taking time to do a project by oneself can certainly grant a sense of accomplishment and save money in the long-run, there are some things where seeking professional assistance would be advisable. Estate planning is one such area.

While estate planning can be done without the help of an attorney, it is important for those considering this option to understand the risks involved. As with most DIY projects, yes, a DIY estate plan will likely cost less to create; however, this could cost beneficiaries more in the long-run. A do-it-yourself estate plan may not offer protection from taxes or other expenses and could be easily contested in court. Even though these documents can make sure final wishes have been made known, they will likely not provide the same level of security compared to estate planning documents drawn up by an experienced attorney.

Increase in estate tax exemption can help with gift taxes

  • 31
  • October
    2014

Each year, the IRS announces how much the estate and gift tax exemptions will be for the following year. Recently, the announcement was made that the estate tax exemption will rise to $5.43 million per person, and the annual gift tax exemption remains at $14,000 for 2015. The $90,000 increase could allow a New Jersey resident to do more gifting during his or her lifetime.

This is because the amount of every gift needs to be deducted from the total amount of the exemption. For instance, if a person has not made any gifts up to this point, he or she could give away up to $5.43 million next year, and no taxes would be due for the one making the gift. A married couple can combine each party's exemption and give away up to $10.86 million.

How a vacation home factors into estate planning

  • 25
  • October
    2014

Some families are fortunate enough to have bought a vacation home, and can share that property with those they hold dearest. When the time comes to create an estate plan, some in New Jersey are unsure how to address their vacation home within the scope of their estate planning tools. Fortunately, there are a number of ways to handle a second or vacation home, which means that there is a solution available for virtually every scenario.

The first step in addressing how to pass on a vacation home is to determine if one's children want to retain the property. This is best accomplished in a sit-down discussion with all parties present. If the children want to keep the home, the discussion should include the costs of maintaining the property, including taxes, upkeep and routine maintenance. This is also a good time to work out an agreement on who will have the right to use the property, and how the schedule might work if siblings do not want to make use of the home at the same time.

A sad but true estate planning and probate reality

  • 23
  • October
    2014

Much has been written, here and elsewhere, about the need to create and maintain a thoughtful drafted estate plan. That said, the reality is that many in New Jersey and across the nation will not address this important need, and their heirs will be forced to go through the probate process. A recent article written for estate planning attorneys puts an unusual spin on this reality, one that is disheartening for many families but also has the power to motivate some to make a change.

The piece reported that statistics suggest that between 55 and 70 percent of Americans do not have an estate plan in place. With the Baby Boomer generation now at or beyond retirement age, more Americans than ever before will soon need the protections that an estate plan can offer. However, the article does not focus on how to convince older Americans to create an estate plan; it instead suggests that the negative repercussions of failing to do so will increase awareness of the issue.