Many New Jersey residents believe that because they do not have a high level of wealth, they do not need to conduct any form of estate planning. This is a misconception, as estate planning encompasses a wide range of needs, not just the preservation of a large fortune. Anyone who wants to have the ability to pass their property on to those they will leave behind is in need of an estate plan, as well as asset protection planning.
For example, consider a couple who have worked to pay off their home, built a small business and set aside a modest amount of savings. They have children to whom they plan to leave these assets by means of a simple will. This couple already has a basic estate plan, simply for having gone through the process of drafting a will.
However, should they pass away without creating a more detailed estate plan, their heirs could be subject to taxes that might have been avoided with more careful planning. There are multiple ways to preserve these assets, such as use of a trust or the creation of a family limited partnership. This is a partnership that pools the assets held by a family. It can help reduce estate taxes and also serves to limit creditor claims.
A family limited partnership is just one asset protection planning tool that is available to New Jersey residents. There are a number of other estate planning products that can be put to use to preserve wealth and ensure that one’s heirs receive the bulk of their inheritance, without paying excessive taxes and other fees. Each family’s scenario is unique, and the best way to create a solid estate plan is to work with a trusted advisor to create a customized solution.
Source: Mail Tribune, “Don’t have an estate? It still pays to plan as if you do”, Pamela Yip, May 18, 2014