Many people think that just because their estate is small and won't be subject to estate tax that they don't need an estate plan. That simply isn't the case. Every New Jersey resident can benefit from doing some estate planning.
If nothing else, everyone needs to have a will. Otherwise, the state of New Jersey gets to decide what happens to the decedent's assets, or worse, any children under the age of majority. A will gives the one making it control over who becomes the guardian of any minor children, who gets what assets and who will be in charge of making sure that person's wishes are carried out. The "executor" will also take care of paying any outstanding bills and taxes.
A will is a good start, but it will still need to be probated. This could be a lengthy, public and expensive court process. Having a living trust can help avoid this process. A person's assets are transferred into the trust, which can be changed during the maker's lifetime. For tax purposes, the assets are still considered to be owned by the person to whom they belong, but when that person dies, assets will pass directly to the beneficiaries without having to be probated.
Of course, having these documents may not solve all of a person's estate planning issues. The totality of every person's situation needs to be considered when drafting a will and living trust. There are laws and procedures in New Jersey that need to be adhered to for the documents to be considered valid. Having the advice and assistance of someone who understands these laws and procedures may be worth the cost to ensure that loved ones are properly taken care of after death.
Source: MarketWatch.com, "Estate planning for the rest of us," Bill Bischoff, May 21, 2013