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Bridgewater New Jersey Estate Planning Law Blog

Why is minimizing your lawsuit risk key to estate planning?

When most individuals hear the terminology "asset protection," they often think about making sure that their home, car or tangible property are well-maintained so that they retain their value across the years. Few individuals think about how a lawsuit filed against them could put their assets at risk. Protecting yourself against a potential lawsuit is a critical component of the estate planning process.

In most cases, a plaintiff doesn't necessarily need to substantiate any claims that they make to simply file a lawsuit against someone else. Defending yourself against an allegation of impropriety can be costly. The longer that a case remains open, the apter it is to potentially harm you or your company's reputation. It can be costly to repair such damage once it's been done.

Make sure that your digital assets are covered in your will

When people are asked about estate planning, they often mention wills, health care directives and powers of attorney. Most people describe what they'd like to happen with their tangible assets such as a car, house or family heirloom if they were to pass in their will. Few detail what they'd like to happen with their digital ones like email accounts or online photo albums in it. It's something that should be included there, though.

In an era of paperless offices, social media, email and smartphones, it seems that many people's personal and professional lives are all tied into technology.

Asset protection benefits associated with Delaware trusts

Whether you're just getting around to planning your estate or you're reviewing the existing plan that you have in place, you likely are well aware of how important asset protection is to this process. Setting up a trust in Delaware carries with it many different benefits, especially when it comes to maximizing your wealth or preserving your assets.

Setting up a Delaware trust in a great option for if you want to grow your assets. A trustee can award payouts of up to 5% of the many assets contained in the trust to beneficiaries per the Total Return Unitrust statute. The rest of the assets contained within can be invested in long-term growth opportunities so that the future needs of beneficiaries can be met.

Estate administration doesn't just include asset distribution

It's generally not long after a testator's funeral has happened and their will has been filed with a Middlesex probate court that beneficiaries start coming out of the woodworks. They often do so to make sure that they get their cut of the assets. While you may be tempted to speed up the estate administration process to put an end to all the chaos, it's best if you don't make any rash decisions.

New Jersey has a list of responsibilities that an executor of an estate must follow to remain in compliance with existing laws. One of those responsibilities is to file the testator's final tax return. They're also required to pay off an estate's debts in full before they distribute any assets to any heirs.

Irrevocable trusts can be helpful in certain cases

One of the reasons that individuals set up irrevocable trusts is to make sure that their wishes will be upheld once they die. While a will can help you accomplish this, it requires the involvement of the probate court. Irrevocable and other types of trusts generally do not.

In case you're wondering what an irrevocable trust is, it's a trust that can't be changed by the grantor, or the person who created it. Once it's set up, the only people who can request to make changes after it's been put in place are the beneficiaries of it. You as the grantor no longer have rights to any of the assets that belong to the irrevocable trust once you transfer them into it.

How are conservatorships and guardianships different?

If they don't do so beforehand, many Middlesex residents finally get around to estate planning once they have a child. Others do so do as they age, especially if they have someone with special needs that they care for.

There are two estate planning tools called guardianships and conservatorships. They can be set up to ensure that your loved one's finances and health care are taken care of if they become unable to take care of them on their own.

Taking out disability insurance is key to protecting your assets

If you work a full-time job in Middlesex, then you likely receive annual visits from a New Jersey insurance representative. They probably ask if you wish to make changes to your coverage or beneficiary designations. They probably offer you long-term disability insurance. It's an important way to protect your assets and a critical part of the estate planning process.

Individuals take out all different types of insurance. You buy collision coverage on your automobile to help cover the cost of repairs if you're involved in a crash. You purchase flood insurance to cover the remodeling of your home if it's overcome by water. Then there's health insurance. You use it to cover any costly medical care that you may need.

Transfer of your assets to your spouse post-death isn't automatic

Many New Jersey spouses who have assets such as retirement plans, life insurance policies and investment accounts often list their husband or wife as the beneficiary on them. While there's no problem in doing that, it's important that spouses have contingency plans in place for how to handle those same assets if one were to pre-decease the other.

You both can benefit from regularly revisiting your beneficiary designations on your investment accounts. This is especially important if either of you has been married previously, your appointed one experiences a sudden decline in their health or dies. You should make sure to set up transfer on death (TOD) designation documents as well.

Which family members are most apt to contest your will?

It can be beneficial for testators, or for those drafting a will, to communicate with their heirs in advance of their passing. By doing so, they can let them know what their final wishes are. This seldom happens though. Many of them let their preferences be known only after their executor files their will with a New Jersey probate court. This often results in hurt feelings and contested wills.

Quarreling siblings

Inheritance tax in New Jersey depends on connection

It is a difficult subject to tackle, but successful people spend some time and effort working out the details of their end of life plans. Many people have assets and properties to share out among living beneficiaries or charitable organizations, and many of them also have families to consider for the future.

Larger assets may be subject to taxation by the federal government or the state government in Trenton. If assets include a house, especially if it is a primary home, writers of wills often want to know if their children or other inheritors will be able to afford to keep it.

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