When a New Jersey business owner dies unexpectedly, the company may be damaged if the owner did not have an estate plan in place. Owners can use several different estate planning tools in order to protect their businesses in the event something unexpected happens.
New Jersey residents should review their estate plans periodically to ensure that modifications are made to reflect changes in tax laws. Failure to do so could leave one's estate vulnerable to loss based on inadequate tax planning. In some cases, strategies that once provided important protections for the value of a marital estate may be less important because of increased exemption allowances. Leaving an outdated strategy in place could end up costing an estate rather than protecting its value.
New Jersey residents who are planning their estates may wonder what steps they need to take and what documents they may be advisable beyond a will. A person may want to consider using a living trust in addition to a will because it might allow assets to be distributed more privately and quickly than a will. People should also keep in mind that beneficiary designation forms such as those for retirement plans and life insurance policies are part of an estate plan and must be kept up to date.
New Jersey residents who are preparing their estate plans may think that they do not need a trust for their children. They might think of trusts as something that is only suitable for wealthy families or spoiled kids. However, a trust can be a useful vehicle for managing how distributions are made.
The federal estate tax exemption stands at $5.45 million in 2016, and there are a variety of ways that people can take advantage of it. One particularly popular option is using gifts. People are allowed to give up to $14,000 per person per year as a gift without it counting against their estate tax exemption. Additionally, married couples are able to give joint gifts, allowing couples to give gifts of $28,000 to a person every year.
People in New Jersey are typically aware of the need for addressing end-of-life matters. This process usually includes writing wills, deciding on powers of attorney and choosing guardianships. Unfortunately, however, people often make the mistake of asking a lawyer to help with drafting estate planning documents and then never reviewing the plan again.
New Jersey residents who are starting to think about how their assets will be passed along after they die should take inspiration from the careful estate planning achieved by the late singer and songwriter David Bowie. He died from liver cancer on his 69th birthday two days after the release of his final album, "Blackstar."
Anyone whose estate plan was done years ago might want to review it in light of changes to federal tax laws. Historically, the focus of estate planning was to have an asset distribution aimed at avoiding federal estate taxes, but an increase in the estate tax exemption to $5.45 million for individuals in 2016 makes it likely that New Jersey taxpayers might be more concerned about other tax implications besides estate taxes.
People don't like to think about dying. It's only natural. But heirs of New Jersey residents who plan ahead will reap the benefits from their estate planning actions.
Married couples in New Jersey may want to consider taking some simple steps to prepare for the possibility of one spouse's death. Although most spouses don't like to think about estate planning, it is important to have certain documents prepared. According to a survey by NerdWallet, about one in three married couples don't have life insurance.