Many people dread the thought of approaching their estate planning. It’s an uncomfortable reminder that we are all limited by our own mortality, but there can be devastating consequences for putting this off until it’s too late and leaving your heirs with an administrative and financial mess. Those individuals who will receive your assets may receive less because of expenses like taxes and court costs. They may not receive them at all in some situations. This is why estate planning is so important regardless of your age, your health condition or the size of your estate.
There are several critical documents that belong in any estate plan, the most important of which is known by most individuals and this is a will. This is the legal document that allows you to determine how your assets will be distributed when you pass away. The state intestacy statute in New Jersey will determine what happens to your property if you pass away without a will. Those individuals who have only a will, however, may mean that your assets have to go through the probate process prior to distribution.
Many people living in New Jersey hope to avoid the probate process for the benefit of their heirs and therefore, will use a revocable trust. This trust will act in a similar way as the will, however, it will avoid probate and cut down on expensive court proceedings while also giving greater privacy to your estate.
A durable power of attorney is also strongly recommended as another crucial estate planning tool. This allows another individual to step in and take responsibility for your financial affairs, should you become unable to do so. In the event that you become incapacitated without having taken the planning step of naming a durable power of attorney, the court may be responsible for stepping in and naming someone to act on your behalf in a time consuming and possibly expensive proceeding. Thankfully, your ability to look ahead and plan for these risks including incapacity as well as what happens when you pass away can make things much easier for your heirs.