New Jersey residents often hear that it is a good idea to put their affairs in order to ensure that their wishes are carried out after death. However, once people begin to look into what estate planning entails, they are often overwhelmed by the multitude of documents and choices in front of them. Having at least a rudimentary understanding of the terminology associated with estate planning could make the process less confusing.
Many consider a will the central document of an estate plan. A will outlines who will receive an individual's assets upon his or her death. It is subject to probate, and its contents may be made public. Probate is the legal process through which an individual's assets are safeguarded and distributed after death.
In contrast, a living trust can remain private and holds a person's property during life and after death. A trust can outline how a beneficiary receives the assets of the trust and when. The assets are normally not subject to probate.
A health care directive, commonly known as a living will, lets a person's family know what medical treatment he or she does and does not want in the event that he or she is unable to make such decisions for him or herself. In addition, a person or persons can be appointed to make health care decisions on his or her behalf. A separate power of attorney can also be created to allow someone to take care of a person's financial affairs if he or she becomes incapacitated.
These are loose definitions of the documents that make up the bulk of estate plans. Every New Jersey resident's estate planning needs are unique, and these documents can be created to reflect one's individual circumstances. Someone familiar with estate law could help determine what documents will work best to achieve an individual's wishes.
Source: benzinga.com, "After Your Funeral, Your Financial Assets Could Haunt: Estate Planning Basics", Rebecca Sheppard, Feb. 2, 2015