One of the most common objections that New Jersey attorneys hear in regard to creating an estate plan involves the belief that an individual or family with only a moderate or modest level of wealth has no need to create such a plan. This, however, is far from true. Viewed from a different perspective, those with less modest financial holdings have an even greater need to protect those assets at the time of their death. Avoiding probate is key to preserving assets, and having more to pass on to loved ones.
The reason that estate planning is so important to those with a modest volume of assets boils down to simple math. Those who have less to pass on can not afford to pay out significant taxes, fees and other costs associated with settling an estate. With the proper estate planning, individuals can preserve a greater percentage of their accumulated wealth, which is a good idea no matter how many assets are at play.
A solid estate plan is one that keeps all of an individual’s assets out of the probate process, which can be time-consuming, stressful and expensive. Even a relatively small estate can rack up significant distribution costs if the assets pass through probate. In order to avoid this fate, individuals should consult with an attorney to determine how to pass on assets outside of probate court. Investments such as retirement savings and other accounts can be passed to loved ones through creating a designated beneficiary for those assets.
For those in New Jersey who feel that they do not have a level of wealth that requires the creation of an estate plan, it is important to consider the cost of probate. In addition, think about what those costs may mean to the bottom line of how much wealth is available to pass to one’s chosen heirs. In most cases, creating a simple estate plan can ensure that a greater percentage of wealth can pass on as one intends, which is important no matter what those numbers may be.
Source: St. Louis Business Journal, “Estate Planning Protects against Costs, Taxes and Creditors“, Dave Heilich, Aug. 13, 2014
Source: St. Louis Business Journal, “Estate Planning Protects against Costs, Taxes and Creditors“, Dave Heilich, Aug. 13, 2014