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Common estate planning mistakes

New Jersey residents who want to leave assets to their loved ones after their death must do more than prepare a will. A will outlines who gets property that doesn't have a named beneficiary. Assets such as retirement accounts, life insurance policies and joint bank accounts are not subject to a will. They are passed on to the beneficiary without involvement from the probate court.

Effective estate planning involves ensuring that the right person is listed as beneficiary on all accounts that will not go through probate. By reviewing these accounts regularly, owners can determine whether their beneficiary is correct on each account. Life changes often necessitate beneficiary changes. If the beneficiary is not changed on a retirement account after a divorce, the ex-spouse could inherit the money when the account holder dies.

Other circumstances also require special considerations. For example, special needs trusts may need to be set up when a parent wants to leave money to their special needs children. If those children receive or may eventually need government aide, an inheritance in their name may make it more difficult for them to receive assistance.

Estate planning is a process that is often overseen by an attorney. An attorney who has experience in probate law and estate administration may be able to help a client devise a plan that will allow them to protect their assets from New Jersey inheritance taxes and get them in the hands of the intended heir. Through beneficiary assignment, trusts and transfer on death registrations, most assets can avoid probate court and go straight to the beneficiary or spouse.

Source: Forbes, "How To Inherit Wealth Without Screwing Up", Larry Light, November 22, 2013

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