You already understand that it’s important to have a will. Without it, New Jersey’s intestacy laws will determine who gets your assets when you die.
But just having a will is not enough. A comprehensive estate plan doesn’t just distribute your assets after you pass away; it also protects them while you’re alive.
An estate plan consists of legal documents that lay out how you want your affairs and assets managed during your lifetime and after you die. Everyone is unique and has their own estate planning needs. The family with school-age children has different priorities from the couple nearing retirement. A good estate plan is tailored to the individual. However, some key components should be a part of everyone’s estate plan:
1. A will
If you die without a will, according to New Jersey’s intestate succession statute, all of your assets will go to your nearest relatives in the following order – your wife, your children, your parents, your siblings and so on. If you don’t have any relatives, your entire estate will go to the state. With a will, you dictate who gets what, including any bequests to special friends or charities.
A will is also essential for parents with minor children. In your will, you can name who you want to be your children’s legal guardian. Without that designation, the courts will decide who will raise your children, and it may not be someone whose values align with yours.
2. Power of attorney (POA)
Life is full of the unexpected. At any moment, an accident or illness can leave you incapacitated. How will your bills get paid, and who will manage your other financial and legal affairs if you cannot? By naming someone you trust as a durable POA, you have the assurance that those crucial matters will be handled.
3. Advance directives and healthcare proxy
Some people want extreme measures taken to keep them alive, while others don’t want to be kept alive by a variety of machines. Your advance directives let healthcare providers know which life-saving measures you do and don’t want. Your healthcare proxy is similar to your POA, only they make decisions on your behalf regarding medical treatment, surgeries, medications and organ donation.
4. Trusts
Trusts are incredibly versatile estate planning tools. There are revocable and irrevocable trusts that can be used to protect assets, support charities, minimize estate taxes and ensure privacy. They can be tailored to meet various needs, such as caring for minor children or individuals with special needs or safeguarding family wealth for future generations.
Working with a legal professional can help ensure you get an estate plan that meets your objectives. Knowing that you have taken this vital step in protecting and managing your assets will give you and your family peace of mind.
