Reasons to Create an Estate Plan Today
An estate plan is setting up documents to provide for the management and protection of your assets and personal affairs while you are alive and for the orderly distribution of those assets after you pass away. In the past, an estate plan was thought of as simply making a will. Today, at a minimum, an estate plan consists of a will, power of attorney and living will. In some cases, a trust may be necessary.
Some people think that they do not need an estate plan. They think that they are too young or don’t have enough money to reap the tax benefits of a plan. But as the following list makes clear, estate planning is for everyone, regardless of age or net worth.
1. Loss of competency. What if you become incompetent and unable to manage your own affairs? Without a plan, the courts will select a person to manage your affairs. With a plan, you pick that person through a power of attorney or inter vivos (living) trust.
2. Minor children. Who will raise your minor children and control their assets if you die? Without a plan, a court will make that decision. With a plan, you are able to designate the guardian and trustee of your choice.
3. Dying without a will. Who will inherit your assets? Without a plan, your assets pass to your heirs according to New Jersey laws of intestacy. Your family members (and perhaps not the ones you would choose) will receive your assets without benefit of your direction. With a plan, you decide who gets your assets, and when and how they receive them.
4. Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse and to the children from a prior marriage or marriages.
5. Children with special needs. Without a plan, a child with special needs may have to use his or her inheritance to pay for care or run the risk of being disqualified from receiving Medicaid or SSI benefits. With a plan, you can set up a Special or Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.
6. Medical decisions. If you become incompetent, who will make medical decisions for you? Do you want to be kept on life sustaining measures? Without a plan a court will appoint someone to make medical decisions for you. With a plan, you name the person who will make medical decisions and your can specify what life sustaining measures you would want.
7. Business ownership. Do you own a business? Without a plan, you don’t name a successor, thus risking that your family could lose control of the business. With a plan, you choose who will own and control the business in the event you become incompetent or after you are gone.
As you can see, estate planning is for everyone, regardless of age or net worth. Please feel free to contact us for assistance and to protect your family and your assets.