New Jersey residents who want to avoid intestacy and want their loved ones to receive a specific portion of their estate may consider creating an estate plan. An estate plan puts the power in these individuals’ hands and avoids the state laws regarding who should stand to inherit. However, there are other important aspects of an estate plan beyond a simple will.
For example, a power of attorney is often part of an estate plan. This instrument assigns another individual to make financial decisions and transactions on the grantor’s behalf. This type of arrangement can stay in place if the power of attorney is made durable. Another important part of an estate plan is a health care proxy. This instrument is used to give someone the ability to make health care decisions on behalf of the grantor. While some New Jersey residents might be afraid that creating an estate plan will require them to give up control, these instruments actually give more control to these individuals because they can designate a trusted individual. Without such an arrangement, a conservatorship might be required, which entails a long and expensive court process and which may result in a different person being appointed as a guardian.
Once a person has a major life event transpire, such as a divorce or birth of a child, he or she should reevaluate the estate plan. For example, having a life insurance policy that names an ex-spouse might not make sense. Additionally, having a new child to provide for can require a codicil to a will or trust. A guardian should also be named in the estate plan to care for any minor children in the event of death.
Individuals who want to protect their assets and loved ones might create an estate plan. Through such a course of action, they can acquire a will, trust and power of attorney.
Source: Fox Business, “4 Tips to Begin the Estate-Planning Process”, Kathryn Buschman Vasel, November 22, 2013