While it is never a good idea to make sweeping generalizations about groups of people, there are often important lessons to be learned by the choices made by others. When it comes to estate planning, there seem to be certain mistakes that older people make when considering their needs, some of which can lead to negative outcomes. The following examples are errors that a person of any age can make, but that can be particularly prevalent among older New Jersey residents.
Many people assume that the best way to pass along assets to their intended heirs is simply to enter into joint ownership while the original owner is still living. This can have a number of unintended consequences, however. For one, the individual who jointly owns an asset may have different ideas about how to manage or dispose of that asset, which can leave the original owner in a dire financial situation. In addition, jointly owned property is subject to loss through divorce, lawsuits or past-due taxes. An intended heir could end up losing all or some of his or her inheritance before the original owner passes away.
Another common mistake is to simply list “estate” as the beneficiary on a life insurance policy or investment account. Doing so will almost universally ensure that the matter has to go through the probate process before one’s heirs have access to the assets. Probate can be lengthy, frustrating and expensive for those left behind and is a process that can be completely eliminated with the proper level of estate planning.
For those in New Jersey who are nearing or within retirement and who have estate planning questions, the best way to find a cohesive solution is to work with an estate planning attorney. This trusted professional can listen to an individual’s concerns and create a package of legal documents that will meet those needs. Mistakes such as the ones outlined above can be avoided, but only by taking a more holistic approach to the estate planning process.
Source: recordonline.com, “Bonnie Kraham: Common elder law estate planning mistakes to avoid”, Bonnie Kraham Recordonline.com By, July 1, 2015