The estate planning process is often overlooked by individuals in New Jersey and elsewhere. Either they do not want to confront the inevitable and think about their death, they don’t think it is essential because they do not have much money or are still young. The reality is that an estate plan can benefit anyone, as it explicitly states which heirs get what at the time of your death when it comes to your assets and property.
What every estate plan needs
There are three documents that every estate plan needs. While this is not a must, these three documents will cover all the major needs and functions of an estate plan. This includes a will, a power of attorney and an advance healthcare directive. A will helps direct asset distribution, a power of attorney gives someone the authority to take care of ones affairs while he or she is alive and an advanced healthcare directive outlines how one wants healthcare decision to be handled if he or she is unable to do so.
Utilizing a trust
A trust is a beneficial estate planning tool and is not just for those that are wealthy. Even an estate of $150,000 could benefit from a trust, as it helps speed through probate and minimizes the issues that could come up. Additionally, a trust can also control how money and assets are distributed, which is very beneficial when a beneficiary is a minor.
Important considerations
While there are many important things to consider when drafting an estate plan, the following five items are high up on the list. To begin, one should not wait to create an estate plan. One does not need to be elderly or wealthy to do so. Next, if a couple has children, it is important to specify who will take care of them in the event of your death. Third, ask an executor if they are willing and able to serve in this role. Next, consider whether to leave everything to your children or to a wide range of heirs. Finally, it is important to keep one’s estate plan up-to-date, modifying it after a significant event and continuously review it.
While it may be challenging to begin the process of drafting an estate plan, it is far easier than loved ones having to navigate probate while mourning your death. Thus, it is important to consider the different components of an estate plan, as this could help protect your wishes and provide your heirs with the property you seek to pass onto them.