Estate planning involves many tasks, such as writing a will, signing a power of attorney form, crafting a health care proxy, and taking several other steps. Some New Jersey residents may wonder where they should start. Performing a thorough review of the estate might be an essential first step.
Examining the estate
Taking a thorough inventory of one’s assets and liabilities may provide insights into how to draw up estate plans. Documenting all assets, such as bank accounts, individual retirement accounts, real estate holdings, and other things of value is an important first step.
Another initial step involves itemizing all debts and obligations. When going through the probate process, the executor must settle outstanding debts. Beneficiaries receive assets after creditors receive payments, so keeping a thorough file of all creditors and related obligations is advisable.
Proper estate planning preparation could make things less challenging for the executor and the beneficiaries. A comprehensive asset and liability audit may help all involved.
Other critical steps to review
Tax issues could arise when a beneficiary receives assets from an estate. While living, the testator may take advantage of giving a qualified beneficiary an annual tax-free gift. Certain relatives might be eligible for $15,000 in that tax-free gift.
The “average person” might not realize that estate planning potentially involves so many steps. Conducting some research as early as possible could prove revealing and worthwhile. For example, learning about health care proxies and living wills may lead some to undergo a full health examination. If someone’s health shows worrisome signs, taking advance action to set up directives in case of an emergency might help the person’s family.
Waiting too long to start estate planning steps is not in everyone’s best interests. Moving forward without feeling rushed could help reduce oversights and decrease stress.