Many New Jersey residents are under the misconception that only the wealthy need to go through the estate planning process. The reality is that estate planning is a necessity for adults. It doesn’t matter if you have a lot of assets or hardly any.
Common topics of estate planning
Another big misconception about estate planning is that it’s all about drafting a will. While a will is surely one component of the process, it’s not the whole picture. A good estate plan will have a few key components. These include a durable power of attorney, beneficiary designations, a health care power of attorney, and a guardianship appointment if you have minor children.
Beyond just wills and trusts
Apart from dividing up your assets after your passing, your estate plans should include a durable power of attorney. This document helps to specify a person that will act on your behalf in the event that you become physically or mentally incapacitated. This durable power of attorney helps to ensure that your wishes are carried out, even if you can’t do so yourself.
If you have minor children, you’ll want to include the guardianship designation. This allows you to specify just who you want to have guardianship of your children upon your passing. Whoever you choose should be financially sound and actually willing to raise the child. It’s always advisable to list a backup or contingent guardian just in case the first person you named is unavailable.
Estate planning is a process that everyone should go through as they enter their adult years. While you may think that this process is one-and-done, that’s not how it works. You’ll want to update items in your estate plans every three to five years.