Many New Jersey residents, especially young people, tend to believe they do not need to plan for their death. However, no one knows how long he or she has on this Earth. Further, an estate plan is not just about death, it is about documenting an individual’s wishes if he or she becomes incapacitated and unable to make decisions.
Another reason that some people do not have an estate plan is because they think their financial situation is not complicated enough to warrant it. However, without at least a will, an individual’s assets may not end up where he or she thinks they should. Additionally, jointly holding accounts and/or property with an heir could make them vulnerable to creditors and soon-to-be ex-spouses.
Having a will ensures that most of a person’s property will end up with the person he or she wants to inherit it. Further, if there are minor children, it is important to name a guardian for the children in order to prevent family members from ending up in court to decide who will care for the children. There may also be circumstances in which it would be beneficial for an heir for the assets to be held in a trust — for instance, if the heir is a minor child or a family member who may not be financially astute.
In the event that a person becomes incapacitated, having a living will and/or health care power of attorney is essential. A living will puts an individual’s wishes regarding lifesaving medical treatment in writing. A health care power of attorney allows someone to make these decisions. Without these documents, family members may have to go to court to obtain the right to make such decisions.
In either of these cases, if family members are forced to seek the approval of a New Jersey court to act, it could become contentious if they do not agree on what should be done. Therefore, having an estate plan can forestall these types of arguments and delays. The plan does not have to be complicated to be effective.
Source: Forbes, “7 Common Estate-Planning Blunders Not To Make“, Sheryl Nance-Nash, Sept. 15, 2014