Now that the federal tax exemption is over $5 million per individual, many people believe they no longer need an estate plan. However, limiting tax liability was never the main benefit for many people. Estate planning provides for loved ones the disposition of an individual's property and a guardian for minor children. It also provides for the health and financial well-being of a New Jersey resident in the event that he or she becomes incapacitated.
Many people become overwhelmed with the estate planning process; however, it is not necessary to make every decision at one time if that is the case. Having at least the basic documents drawn up could provide some protection in case a person dies or becomes unable to make decisions for him or herself. A will allows an individual to decide to whom his or her property will go after death. It will also allow a parent to choose with whom minor children will live. Without it, the state of New Jersey makes those decisions.
A durable power of attorney will allow a trusted person to make financial decisions on behalf of the maker if he or she becomes incapacitated. A health care power of attorney allows medical decisions to be made -- hopefully, in accordance with the maker's wishes. A living will could provide the necessary guidelines for the person making those health care decisions.
With these basic documents, a person will be covered in case of incapacitation or death. If changes need to be made at a later date, they can be made. This is one of the advantages of estate planning. Most documents can be updated, replaced or added to other documents during the course of a person's life.
Source: personalliberty.com, "10 Basic Rules Of Every Estate Plan : Personal Liberty", Bob Carlson, April 28, 2014