Proactivity, as can be imagined-as opposed to acting out of necessity-is an essential aspect of effective estate planning. But it isn’t always easy to decide which aspects of estate planning deserve the most or immediate attention.
A recent article in the Salem, Oregon publication Statesman Journal listed ten important concerns every person should keep in mind when it comes to estate planning.
According to the author of the article, maintaining family harmony is, no doubt, an important part of estate planning, since the whole purpose of estate planning is to provide for your family once you’re gone. Making planning decisions-for example, selecting trustees, executors, or how to dispose of property-that allow one’s family to maintain coherence is an important way to look after one’s family.
In some states, the probate process-in which assets disposed of by will are distributed-can be expensive or complicated. Avoiding that process may, in some situations be a good way to save money and headaches. In addition to establishing trusts, which avoid probate, there are various types of assets that are distributed outside probate. Early planning can ensure that as little assets as possible require probate. Avoiding probate is not, however, always a necessary task. In New Jersey, the probate process is relatively inexpensive and uncomplicated.
Asset protection is another aspect of estate planning that is often overlooked. The basic goal of asset protection planning is to insulate the assets you leave to your estate from creditor’s claims. One example of this in estate planning would be to create a special needs trust for a family member who is not able to manage their own money well, and who may have creditor’s who wish to tap into their inheritance to satisfy debts. Such trusts are insulated from creditor’s claims, however, and represent an important asset protection technique.
In our next post, we’ll continue on with this topic.
Source: Statesman Journal, “Top 10 estate planning concerns,” Eden rose Brown, 3 June 2011.