People often assume that estate disputes revolve solely around possessions. Two people want the same assets, they can't have them and so they start a long legal dispute to see who gets them.
Certainly, this does happen, and assets do change hands during these disputes. However, experts note that the real problem is often that someone has his or her feelings hurt.
When was the last time you gave some serious thought to your estate plan? If you cannot remember, or if you have never done any estate planning, you are not alone. We will all need it eventually, so why don't we think about it more often?
For one thing, many people do not realize just how fragile life can be. They assume they have all sorts of time -- years or perhaps decades -- to get their affairs in order. Of course, the reality is that anyone can pass away at any age due to accidents, unexpected diseases, violence and a host of other factors. Sometimes, people only start thinking about estate planning when a close friend or family member passes away unexpectedly.
As of Jan. 1, New Jersey no longer has a state-imposed estate tax. However, we still have an inheritance tax on assets that go to a beneficiary after a person's death.
Surviving spouses do not have to pay an inheritance tax on assets left to them by their husband or wife. However, estates can still be subject to federal estate taxes.
When you're writing your will in New Jersey, you must take into account the state's estate tax laws and how they can impact the money you're leaving behind. A small mistake or oversight could cost your family a lot.
For instance, one man became sick and decided to draft a will. At the time, his sisters were the ones providing him with daily care and assistance, so he opted to leave his money to them instead of his mother.
You may know what types of medical care you want, but what if you cannot tell the doctors? What if you have a stroke, for instance, and you are unconscious when you reach the hospital. How are doctors supposed to know if you want to use life support, if you want to be resuscitated and what other types of care they should provide?
The answer lies in an advance directive. This is a document that you can set up before you need it to make these decisions. There are two main types: An instruction directive and a proxy directive.
When setting up an estate plan, one of the most important tools to consider is a trust. There are a wide variety of trusts you can use for a range of purposes. One of the largest benefits is that trust assets don't have to go through probate, and good planners may be able to avoid probate altogether or at least reduce the burden on loved ones. Each type of trust, however, has its own characteristics, benefits and requirements.
One trust estate planning attorneys often get asked about is the spendthrift trust. When you have worked long and hard to build up a substantial estate, you want your heirs to receive as much benefit from it as possible. If you feel strongly that one or more of your heirs are likely to squander the estate, you can set up a spendthrift trust to protect them from themselves.
