Estate planning isn’t just for the wealthy; it’s for anybody who values their privacy, wants to minimize taxes and protect their family
Think you don’t need an estate plan? If you have children, if you own a business, if you have a home, if you have debts, if you’re concerned about taxes, if you want to plan for rising healthcare costs or want to decide how you plan to leave your legacy—if any or all of these things apply to you, then an estate plan could be of benefit.
Basic estate planning includes a will, a medical directive and medical proxy and a durable power of attorney, and, in many cases, a living trust. Every family and every individual has different needs and goals, and as such, may need a more comprehensive estate plan. This is something you can discuss with your attorney. However, the benefits of creating an estate plan are undeniable.
An estate plan helps you provide for your family
Estate plans are sometimes called legacy plans, because they help ensure financial security for your family. A well-developed estate plan can provide income for your family through life insurance and annuities. While life insurance provides an immediate source of cash that will help your family pay bills and any remaining debts upon your death, an annuity with a named beneficiary may provide them with a much-needed income stream. Moreover, both annuities and life insurance generally bypass the probate process.
An estate plan can help minimize your expenses
Many people avoid making an estate plan because they are concerned about the costs of legal services to create the plan. While there will be fees to create the plan, your family will save money down the road by helping avoid a lengthy (and costly) probate process.
An estate plan can smooth the way to retirement
A retirement account, whether an IRA or 401k, is part of your estate plan. That’s because by filling out the form that your employer gave you asking you to name a beneficiary, you have probably avoided having those funds be part of your probate.
An estate plan helps you plan for incapacity
While you may think of an estate plan as something that is important upon your death, it is equally important should you become incapacitated. When you are incapacitated, whether physically or mentally, you are unable to make decisions for yourself. Through proper estate planning, you decide who will make financial and medical decisions on your behalf. It keeps the courts out of the process and can also make things easier on your family, as you will have designated somebody to conduct your affairs.
An estate plan helps reduce taxes
Appropriate planning is essential in reducing taxes that your beneficiaries may incur upon your death. While New Jersey no longer has an estate tax, it does have an inheritance tax. While spouses, children (direct descendants), civil union partners and stepchildren are exempt from this tax, siblings and other beneficiaries have a $25,000 exemption, but are liable for taxes on amounts exceeding that. Life insurance and properly designed trusts can help reduce taxes. The laws regarding taxes and estates are ever-changing, so it is a good idea to work with an New Brunswick estate-planning attorney who has experience with this area.
Let us help you design an estate plan that works for you and your family
Estate planning attorney Steven Cytryn has helped clients throughout Central New Jersey create a plan that ensures the best possible future for their families. To learn more about how we can help you, please call us at (732) 214-1103 or contact us online to schedule a consultation to discuss your needs.