Families in New Jersey and elsewhere have likely heard just how important it can be to have an estate plan. Estate planning can help beneficiaries as well as the owner of the estate -- the plan can give instructions on how that person wishes certain medical and legal decisions to be made. There are some common errors that many families make when creating their estate plan, but there are ways to avoid the confusion.
How New Jersey families can prevent estate planning errors
Estate planning topics: Planning one's own funeral
One of the most appealing aspects of creating an estate plan is having the ability to clearly outline one’s wishes. A great deal of confusion, misunderstanding and tension can arise after the death of a loved one, and spelling out one’s wishes in a clearly constructed estate planning package can help ease those sources of stress. In this regard, planning one’s own funeral is one of the most important gifts that a New Jersey resident can give to his or her loved ones.
Prenup as part of estate planning for second and third marriages
New Jersey couples that want to ensure that their marriage will revolve around a loving union rather than material assets may find that a prenuptial agreement could ensure the peace of mind required to focus on their relationship. Although a prenuptial agreement may sound very unromantic, couples that get married for a second or third time may use such an agreement as part of their estate planning. This is especially true when an older person with considerable assets plans to marry someone who is much younger.
Misconceptions about the estate planning process
Most New Jersey residents are aware that there is a need to address estate planning at an early age. However, quite a few hold common misconceptions about the process or individual aspects of estate planning. The following are just a few issues that are commonly misunderstood, and which can lead to serious consequences if not properly addressed.
Include the digital realm in asset protection planning
For most New Jersey residents, the digital world is a part of their daily life. We use the Internet for shopping, communication, storage of files and photos and more. An increasing portion of our lives is stored online, and that trend seems destined to continue. When considering estate planning needs, many people fail to recognize the importance of including their digital holdings within their asset protection strategy.
Estate planning needs for those without children
In many cases, the central focus of estate planning involves creating a structure through which one’s assets can be passed down to their children in as simple a manner as possible. For single people or couples in New Jersey without children, estate planning can take a drastically different form. In such instances, the focus often shifts away from the allocation of assets and toward the assignation of responsibilities in the event that an individual becomes unable to make his or her own financial or medical decisions.
Poor planning lands Lou Reed's estate in probate process
Many New Jersey readers are likely familiar with the life and artistic work of singer and guitarist Lou Reed. Once the frontman for The Velvet Underground, Reed had a long and prolific musical career that amassed a significant fortune. His death in 2013 and his questionable estate-planning choices have opened up the musician’s financial affairs for the world to see. Hopefully, a glimpse into the estate as it moves through probate will teach others of the importance of creating a solid estate plan, no matter what their level of personal wealth.
Designating guardians within a simple estate plan
For New Jersey parents, one of the most pressing needs when creating an estate plan is the process of designating a guardian who would be entrusted with the care of minor children in the event of the death of the parents. This is a serious decision, one that many parents fail to contemplate because they are fearful of considering their own mortality. At the end of the day, however, many children have suffered when their parents failed to complete this important part of even a simple estate plan.
Treat estate planning as an emergency situation
When many New Jersey residents think about drafting estate planning documents, they believe that the perfect time to do so is at some vague point in the future. This is an easy task to postpone, for a variety of reasons. However, failing to create a comprehensive estate planning package can create an urgent situation. One of the best ways to approach this need is as if it was an emergency scenario.
