In New Jersey, estate planning provides a safe, legal way to transfer your assets to your intended beneficiaries. However, the process involves more than simply writing and executing a will. The following five tips can help you have peace of mind that you have addressed some of the most vital components of your estate plan.
Build your team of advisors
Estate planning tools involve a reasonable degree of complexity and detail, and the larger your estate, the more you can benefit from hiring various professionals to guide you. Each advisory team member will work with you to form a seamless distribution plan to transfer assets to your heirs.
Federal and state tax planning
Your estate may need to pay a significant tax amount unless you take proactive steps to minimize its tax burden. Some simple estate planning tools, such as trusts, can help you avoid the impact of probate costs and estate taxes. Collaborating with experienced tax advisors can help you understand estate tax thresholds and other complexities of tax laws.
Formalize your will
Formalizing your will into a careful, detailed and verified document is one of the most crucial parts of an estate plan. This document explicitly explains how you want your assets distributed upon your demise. An undocumented will holds no weight legally, and without a properly documented will, the probate court will decide how to distribute your assets.
Additionally, a well-drafted will can help minimize potential family conflicts. Family issues that may not have surfaced during your lifetime can emerge upon reading your will. Failing to acknowledge and plan for family resentments and disputes leaves your estate planning team disadvantaged. Working with your advisors to address and mitigate existing or potential family conflicts is vital.
Appoint a guardian for dependents
If you have underage children or dependents with special needs, you must designate a guardian to take care of them if you cannot do so. Communicate with your chosen guardian, gain their consent and ensure they accept the responsibility. The designated guardian does not need to manage the financial assets you leave for your dependents. If you appoint a couple as co-guardians, you may need to specify what should happen in the case of divorce.
Preparing your estate plan involves effort but has a meaningful payoff. Follow these tips to give yourself peace of mind and ensure your estate planning wishes are followed.