Estate planning tips for those who start families later in life
Couples throughout the United States are choosing to start their families later in life. A recent article in Forbes addressed this growing group, noting that steady increases have been recorded in the rate of women giving birth over the age of 40. Those that find themselves within this group have a unique set of estate planning concerns. These can include:
- Retirement. Children are expensive. Ideally, those starting their families later in life have already begun saving for retirement. How these families continue to save may need to change. In addition to planning for retirement, plans should also be made for saving to cover the cost of higher level education for children. Financial experts with Forbes note that although education accounts like 529s are beneficial, they are also often taken into consideration when institutions make financial aid determinations. As a result, in some cases it may be wise to fund retirement more heavily than a 529 or other educational saving mechanism. Retirement accounts are generally not used in these calculations and the smaller 529 could lead to more financial aid options. The couple could then use the additional retirement payouts towards college.
- Special needs. Additional planning is recommended if a child has special needs. This child will likely require additional care throughout life. Additional measures could include planning to cover the cost of health care insurance throughout the child’s lifetime.
- Legal documents. Having a current will not only helps ensure loved ones are taken care of but also makes financial sense. Discussing the various options available for asset distribution with a legal professional can help to better ensure an estate is not overly burden with taxes and other fees.
Although these tips are helpful, they are just the tip of the iceberg. For example, the will is just one legal issue to consider when putting together an estate plan.
New Jersey estate plan considerations
New Jersey is one of very few states that apply both a state inheritance tax and estate tax in addition to the federal taxes already taken out of an estate prior to distribution. The taxes apply in certain situations. For example, an inheritance tax may be applied to assets left to extended family members like nieces and nephews as well as closer members like siblings, but generally not to parents or children.
Navigating through the intricacies of taxes and how they impact the distribution of assets can be difficult. As a result, those who are putting together an estate plan should contact an experienced professional. A New Jersey estate planning attorney can help review the various legal tools available to design an estate plan and help you choose the ones that best suits your needs.