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Bridgewater New Jersey Estate Planning Law Blog

Trusts and insurance are key asset protection planning approaches

If you were to ask most Americans what estate planning entails, they'd likely say that it involves drafting a will, a power of attorney or maybe setting up a trust or something else along those lines. If asked to give a reason why they need each of these, they'd likely tell you to designate their assets for their heirs after they've died. What they may not know is that these are instruments, much like insurance, that can also help preserve an asset's value.

Asset protection is a large part of the estate planning process, especially if you've accumulated significant wealth or if there's the potential of you having money-hungry creditors hunting you (or your heirs) down.

Getting a judge to appoint a new executor requires convincing

One of the key responsibilities of the person drafting a will, or testator, is to select the executor of their estate. The individual appointed to this role is responsible for preserving the value of its assets, filing its final tax return, paying creditors and distributing what's left in the estate to any heirs. It's a sign of trusts for a testator to appoint you to this role. Being given it doesn't mean that the heirs will agree that you're worthy of it, though.

Testators are supposed to regularly revisit their wills to make sure that they continue to reflect their wishes. Few do, though. If a will was written a long time ago, then the testator may have since died. Their ability to trust them may have faltered as well. The role of the probate judge is to make sure that your final wishes are carried out, though, including having your executor handle your affairs.

Protecting children via trust when getting remarried

It's not out of the ordinary to get married two times in life. It's also not out of the ordinary to have children from your first marriage move in with you and your new spouse in Middlesex, New Jersey. What many parents need to realize is that they have to protect their children in their second marriage. This is done by updating the estate plan and creating a trust.

A trust will spell out all of your wishes when you have minor children. This is important when you are married for a second or subsequent time. If you don't want your children to wait until your second spouse dies before they receive your assets you can have them placed in a trust and then distributed upon your death.

Are you responsible for a deceased loved one's debts?

People who pass away have often battled a long illness like cancer. Many have simply had years of poor health. Sometimes they die after a serious accident. In all of these cases, they may leave many thousands of dollars in medical bills. What happens to all of those unpaid bills?

Medical bills and all other debts that a person had when they died are typically paid by their estate. That's if there's enough money in the estate to cover them. What if there isn't? Are surviving family members responsible for their loved one's debt?

Why do we procrastinate when it comes to estate planning?

People often put off their estate planning for "another day," but that becomes months and then years. They constantly tell themselves that they'll get to it eventually, but they never do.

Why do we do this? To understand it, you need to look at why people procrastinate in general. According to leading psychologists, procrastination is about avoiding pain. The definition of pain is very broad, however, and it can include things like shame, fear or vulnerability. Even when people know they have to face it eventually, they can't bring themselves to do it at the moment.

Estate planning and family communication

One of the main keys to estate planning, if you want the whole process to go smoothly, is communication. You need to talk to the other members of your family who will be impacted by the plan. Experts advise sitting down and creating a family communication plan to address this process.

In order to do it, you need to know what questions to ask. Here are a few important ones to keep in mind:

  • How are you all going to share important information? Do you want to use email or text so that you have written records, or is it easier to talk in person and take notes?
  • Who is responsible for sharing information when it becomes available?
  • Do you have anyone in your family that you do not trust?
  • At the same time, who do you trust the most?
  • Who all needs to be involved in your estate planning conversations?
  • What are the main topics that you want to address?
  • Are there any topics that you want to bring up at very specific times? Are there things that you're thinking about now that you don't really need to discuss until later?
  • If you want to have family meetings, where do you want to have them? When should they take place?
  • Do all meetings need to be in person, or can you do them online or on the phone?
  • What are the key elements you want to talk about, such as your main wishes for your family and the specific details of your estate?

How can setting up a Delaware trust protect my assets?

The estate planning process is to be able to pass on your legacy to future generations. One key way to do that is by preserving the value of the assets that you've amassed during your lifetime. While many think that the best way to do this is by placing their funds in an offshore bank account, setting up a Delaware trust can afford you similar benefits and peace of mind.

In case you're wondering why you should set up a trust in Delaware as opposed to New Jersey, that's because the former offers some of the most favorable laws for preserve your assets while keeping your tax burden low. By setting up a Delaware trust, you're afforded a degree of anonymity that you may not enjoy elsewhere as well.

Estate planning: Common mistakes and errors

People often assume that estate planning just means writing a will. That's a good place to start. The biggest mistake people make is not drafting a will or doing any planning whatsoever. But that doesn't mean that a will is all you need or that there aren't other mistakes you should guard against.

For one thing, you need to consider all of your options. Is a trust better than leaving money to an heir directly? Do you want to set money aside for special purposes, like charities or education? Do you want your estate plan to consider your healthcare needs and end-of-life decisions? A complex plan should be about far more than leaving property to your kids. Thinking about an estate plan in such simplistic terms, and failing to look at all the options you have, is a dire mistake.

How children can talk to their parents about estate planning

For children, starting that estate planning conversation may feel intimidating or even impossible. You want to talk to your parents because you know they haven't done enough planning -- or any at all -- but you don't want them to be insulted. You don't want it to sound like you're just trying to find out what you're going to get when they pass away.

At the same time, you know how important estate planning is. Many people put it off, but not having a plan when it's needed can lead to confusion, arguments among heirs and many other issues. So, how do you get your parents to talk about it?

Activating estate gifts can allow you to see their benefit

In many cases, people who pledge money to schools or institutions cannot see the effects that their money will lead to. Why? Those funds are usually not released until they pass away.

A better option for some individuals is the option for early activation. With early activation, the funds are released to the school sooner, so students are aided immediately. Additionally, donors can see how those funds are used and how they affect people in the system.

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