Virtually all New Jersey residents understand that they need some basic form of estate plan in order to provide guidance for those that they will eventually leave behind. In terms of asset protection and advance planning, a foundational estate plan is the best tool for most individuals. A foundational estate plan is comprised of four key elements, all of which play important roles in outlining one’s wishes.
The first part of a foundational estate plan is a will. This document outlines how you wish your assets to be divided among your beneficiaries. It is the most basic component of any estate plan, and is unfortunately where many people both begin and end their efforts.
The second step is to create a living will. This document allows an individual to outline exactly which type of medical interventions he or she would like used in the event of a serious illness or injury. Having a living will is an invaluable gift to your loved ones, as it removes any speculation about how you wish your medical care to proceed in the event that you become incapacitated. The third tool is a medical power of attorney, which is closely related. This document designated a trusted individual who will be tasked with making your healthcare decisions should you be rendered unable to do so on your own.
The final step is to draft a financial power of attorney. Like a medical POA, this document designates an individual whom you deem competent to handle your financial affairs if you should become incapacitated. While most people will never need to make use of a financial power of attorney, it is a powerful tool to have if unforeseen circumstances should arise.
A foundational estate plan is the best way to secure asset protection during inheritance. It also gives individuals the ability to dictate the course of their medical care should they be subjected to a serious illness or injury. This type of plan goes far beyond a simple will, and extends a greater level of assurance that a New Jersey resident’s wishes will be carried out in the manner of their choosing.
Source: Credit.com, “The Biggest Estate Planning Mistakes You Can Make“, Kelly Trageser, April 1, 2014