Many people think that you need to be wealthy to have an estate plan. They have visions of complicated trusts and other obscure legal documents. This just isn’t true. Estate planning is for everyone. A good estate plan ensures that your property is passed on to your loved ones in a straightforward, fast, and inexpensive manner. In addition to that, you will want to make sure that your wishes regarding end-of-life medical care are followed.
Goals of an Estate Plan
There are 5 major goals for estate plans. They are to:
- Designate how your assets are to be distributed among beneficiaries after you die.
- Avoid or minimize the delays and expense of probate.
- Appoint a guardian for your minor children and a person to manage the children’s assets.
- Provide for your incapacity.
- Minimize estate taxes.
What If You Die Without One?
But if you die without an estate plan, the State of New Jersey will provide a plan for you that may not be what you wanted! This is called “intestacy.” This is a “one size fits all” plan that attempts to predict how most people would like their property distributed. Usually, your property would go to your spouse. If you don’t have a spouse or children, your property would then go to other relatives such as parents or siblings.
This plan may follow what should typically happen, but it is not suitable in many instances. For example, you may want to:
- Leave unequal shares to your children because they have different needs, or you have already provided more help to one during your life.
- Ensure that property left to a spouse will go to your children from a different marriage on the spouse’s death, rather than to the spouse’s children or relatives.
- Disinherit a child.
- Leave a gift to a grandchild, more distant relative, or friend.
- Leave a contribution to charity.
All these goals require estate planning.
Estate Plans Are About More Than Your "Stuff"
But an estate plan is more than about who gets your property. If you have minor children, you will want to name a guardian to care for them in the event of your death. Although a court will need to appoint the guardian, most courts will follow your wishes absent of a compelling reason not to.
Because minors can’t be given property outright, you will need to either designate someone to manage your children’s property until they are adults and able to manage it themselves, or leave it to them in a trust.
So What Should I Do?
I recommend that everyone have an estate plan. If you want more information about them, what documents are included, and things you need to think about to prepare them, then I recommend that you download my free book, A Guide to Creating Your Estate Plan. It will get you a long way towards achieving that goal.
But if you live in Burlington, Camden, Gloucester, Salem, or Cumberland counties, have decided that you need to put together an estate plan, and are ready to move forward to create one, then just click here to schedule a free, no obligation phone call to discuss it.