For many in New Jersey, the prospect of planning their estate involves the uncomfortable matter of confronting their eventual death. However, this is a very narrow view of a very broad topic, and one that is not particularly productive. Estate planning is ultimately more about living than dying, as the outcomes can shape the lives of those we care about the most.
When creating an estate plan, it is important to consider the specific and projected needs of one’s heirs. It is a reality that not every child will be prepared to receive a significant inheritance at a given age, and in some cases such a windfall is not advisable at any age. Therefore, individuals must consider the abilities, maturity and responsibility level held by each person they intend to leave assets to.
When there is a risk that an heir will be unable to successfully leverage their inheritance to the best advantage, trusts provide an excellent means of protecting the principle inheritance while providing for a steady stream of income. Trusts also provide excellent tax benefits. In general, the longer an inheritance can remain protected within a trust, the longer those assets are out of the reach of taxation and misappropriation. In the meanwhile, an heir is able to draw annual income and interest.
For those in New Jersey who are considering their estate planning options, it is important to focus on the future lives of those who will be left behind. Often, we know those closest to us better than they know themselves. By protecting their inheritance within a trust, it is possible to give loved ones the time needed to learn from their mistakes and improve their money management skills, which are gifts that are often more valuable than the inheritance itself.
Source: Missoulian, Estate planning should be about living, not dying, Steve Darty, March 18, 2014