There are several misconceptions about estate plans for New Jersey residents. Some people incorrectly assume that estate planning is only necessary for the super-wealthy or the elderly. Others believe that estate plans only contain a will, which means they’re missing out on these four must-haves for a complete estate plan.
Will or trust
Even though estate planning involves more than just a will, every good estate plan begins with a will or trust. Regardless of how many assets you own, a will allows you to decide what happens to them after your passing. People who die without a will run the risk of their estate spending months or even years in probate courts.
Durable power of attorney
Creating a durable power of attorney allows you to name someone to act on your behalf if you can’t do so yourself. This document allows your chosen representative to make financial decisions on your behalf. This includes real estate transactions, business agreements, and other financial decisions.
Healthcare power of attorney
People typically designate a family member as their healthcare power of attorney (HCPA). These documents allow you to name someone to make important decisions regarding your healthcare if you become incapacitated. In addition to naming a primary HCPA, many people also name a backup HCPA if the primary representative is unavailable.
This component of an estate plan only applies to people with minor children under their care. While some wills and trusts include a provision for guardianship, others do not. Creating an official designation regarding the guardianship of your children ensures that the court does not get to name a guardian.
Estate plans include much more than a will. They are a collection of documents covering every part of a person’s life.