A New Jersey resident who is creating an estate plan might think primarily of putting together a strategy that will pass assets on to loved ones. However, making a plan that covers potential incapacitation is another important aspect of estate planning. Many seniors end up needing a caregiver at some point, and around one-third of people eventually need long-term care.
There are several legal documents an estate holder may need. For example, a financial power of attorney appoints someone to take care of financial matters if the estate holder is incapacitated. A living will and possibly other documents cover health care matters. A person may also need a will and a trust.
If possible, a family conference should be held in which the estate holder’s wishes are discussed. This is an opportunity to run through various scenarios and make sure the family understands those wishes. Another consideration is how care will be paid for.
People should also keep in mind that these documents might need updating as situations change. Wills and trusts may need to be reviewed and updated on a regular basis or after family changes such as marriages or births. Another estate planning document that is often overlooked is the beneficiary designation. This is used to pass on assets such as life insurance policies and retirement accounts. Unfortunately, these documents are often forgotten after they are initially filled out. They need to be reviewed along with other estate planning documents to ensure that a retirement account does not go to an ex-spouse or leave out children born later. If a family understands the rationale behind the estate plan, the process will usually be easier for everyone involved.