Estate planning is not only important for New Jersey residents who have a lot of money in the bank. Even people with a minor amount of assets and who have a family should write a basic estate plan so that their assets are distributed correctly after their death. Dying without a will can create a lot of legal and financial problems for a person’s family.
The cornerstone of an estate plan is the will, and it is vital to make sure that the document is comprehensive and up to date. A will can name an executor for the testator’s estate, designate guardians for minor children and determine how assets should be divided between family members, friends and charities.
Some assets like life insurance and retirement accounts go directly to the person listed on the beneficiary designation, no matter what is written in the will. For this reason, it is important to make sure that beneficiary designations are up to date. Some estates may benefit from the use of a trust in addition to the will. A trust can hold property and other assets and pass them directly to beneficiaries without the need to go through probate court. A trust may be created outside of a will, or a testamentary trust may be established by language in a will and go into effect upon the death of the testator.
There are other documents that an estate planning attorney can suggest. For example, a power of attorney can allow a trusted individual to make health care or financial decisions if the principal becomes incapacitated and is unable to do so.