For those in New Jersey who have amassed a significant volume of wealth, a higher level of estate planning is often required. Once wealth has surpassed the estate tax exemption amount, currently $5.43 million per individual, more complex asset protection strategies are necessary. A solution that can work for many families lies in an intrafamily loan.
When an individual is able to attain a high level of financial success but does not come from generational wealth, a lack of knowledge concerning complex estate planning is sometimes an issue. Many New Jersey families who have amassed first generation wealth are concerned about how to pass that wealth on to their children, but few take an approach that goes beyond that simple transfer. When it comes to wealth preservation, a long-term strategy is the best possible approach.
Many New Jersey residents have taken proactive stances toward their estate planning needs and have had their documents in order for many years. This is admirable, especially considering the number of people who fail to address asset protection needs -- many of whom die without having any plan in place. However, simply completing the estate planning process is not enough to ensure that the highest level of protection is in effect. In some cases, estate planning tools become obsolete over time.
Many New Jersey residents will spend a portion of their lives living abroad. Known as expats, Americans who live outside of the country for extended periods of time have a number of unusual legal needs. Creating a solid asset protection plan is an example, and individuals and families must take care to ensure that their wishes are properly documented prior to setting out on an extended trip abroad.
Taking a proactive approach to estate planning is a great way to get started. Those in New Jersey who are able to address these matters far in advance of their eventual implementation are at an advantage, as last-minute planning often yields poor results. However, in order to harness the full potential of asset protection tools such as trusts, those vehicles must be properly funded.
When considering how to structure their end-of-life needs, many in New Jersey hold the misconception that they do not have enough wealth to require estate planning services. They feel that asset protection is a concern only for those who sit amongst the wealthiest; the fabled one percent. In reality, however, virtually everyone can benefit from having a solid estate plan in place.
As Americans, we tend to idolize celebrities, placing them upon pedestals that are sometimes deserved, and are often not. When it comes to estate planning and asset protection, it is easy to assume that the fame and wealth that many of these individuals enjoy will translate into a higher level of preparation than the rest of us enjoy. Not to mention the fact that many celebrities have far more wealth to manage than most New Jersey residents. In reality, however, the rich and famous often leave behind estates that are rife with poor planning and errors in judgment, just like many “regular” Americans.
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.
In the last two decades, the number of trusts that have been executed has grown, perhaps owing to more people becoming aware of their benefits. New Jersey residents may utilize trusts as an asset protection tool or use them to save on federal estate taxes and to avoid the expensive and public process of probate. Although trusts have multiple benefits, using them requires a more complete knowledge of how they work.
It may seem counterintuitive, but there may be instances in which giving away your home may be the best course of action as part of asset protection and estate planning strategies. Older New Jersey homeowners and their families may want to consider such a gift under certain circumstances.