Estate planning is one thing that should be done before it is needed. A New Jersey estate planning attorney can guide people through the process, but even the best estate planners appreciate questions from their clients. A few of the questions that clients should ask to avoid pitfalls in their estate planning are:
Is a will enough?
After a person dies, their will gives instructions of how their wealth and possessions should be distributed to family members, friends or charities. This may not cover all the possibilities. It is good for a person to have a health care directive that gives instructions in the event the person cannot speak for him or herself.
Wills just hand out money, they don’t control the terms such as the age when the children can get their inheritance or the amount they get at one time.
Is a will fair?
Estate planning can do much more than a will when it comes to distributing wealth fairly. Assets can be split equally, but this may not be the fairest choice. One child may have a disability and need more help. Another child may want to run the family business and the other doesn’t. These things can be taken into consideration to avoid sibling quarrels.
How to coordinate my documents?
Beneficiary designations supersede the contents of a will. Even if the will says the assets should be distributed equally, if one person is designated beneficiary on a bank account or IRA, the funds will go to that person no matter what the will says.
What is titling assets into the name of the trust?
If assets are not titled into the name of the trust, and are titled to another name, the funds cannot be managed or distributed by the trustee. In this case, the trust will most likely go into probate.
How much life insurance is necessary?
It is difficult for a person to determine the amount the surviving family members may need after their death. The best way to answer this question is for the family members to think about what will be needed as well as how much life insurance they can afford. The answer to these two questions will help determine the right amount of life insurance.
How much will my estate be taxed?
Revocable living trusts are not tax-free. There are federal laws as well as state tax rules for trusts. A good estate planner can minimize the amount of tax the survivors will have to pay.
Why avoid probate?
Probate may be an expensive, lengthy process, but it is not the worst thing that can happen. Avoiding probate is recommended by estate planners if the person wants confidentiality or if there are several properties owned in different states.
Should a child be added as a joint owner?
This is not a good idea if there are several siblings because it can cause strife. Also, if the child who is designated wants to get a loan from New Jersey credit unions, they have to report this asset, which could make it vulnerable to creditors. A durable power of attorney is better than adding a child as owner to a house or bank account.
Should heirs be prepared to receive an inheritance?
It is a good idea to encourage a warm family atmosphere throughout life, so when the time comes for the assets to be inherited, the family will feel united and not divided.
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