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Bridgewater New Jersey Estate Planning Law Blog

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.

Are there good ways to protect your assets from creditors?

As you age, it is important to begin thinking about how to protect your assets. Even younger individuals need to do this, particularly if they've inherited money or earn a lot each year.

Asset protection isn't just for those wanting to preserve their assets for their loved ones. It's also for those who want to protect their assets against claims from creditors. Here's a little more on asset protection and what might help you keep your assets safe.

Getting your will right: An important legal document

Most people know that creating a will is a normal part of growing older. You start to collect assets, so it only makes sense that you'd want to create a will to protect those assets and state who should receive them upon your death.

A will, also known as your Last Will and Testament, is a document that declares the heirs to your estate, names the person who will be in charge of disposition and assures the integrity of the disposition. This can be an iron-clad document if you're careful, but you have to be cautious of questions of testamentary capacity.

Executors: An honorable, but difficult, job

One of the reasons that estate administration is so difficult for people is because it is not very common and requires planning years in advance. That planning may or may not involve the person who will eventually take over the estate. No one likes to bring up death, but not doing so actually makes an executor's job harder.

After a person dies, the executor must make sure the will is carried out and that the estate is taken care of. That may mean paying bills, resolving debts or doling out property to beneficiaries. In fact, executors are entrusted with the responsibility to make sure a person's wishes are met, even after death. It is important that the executor will act in good faith and carry out the decedent's wishes in good time.

Should you choose irrevocable trusts to protect your assets?

You've worked hard to live a life with many assets, and at this point, you just want to protect as many of them as you can. As you age, you know you could risk losing assets to the government if you do not plan carefully.

There is an easy solution. If you want to protect your assets, one of the things you can do is have an irrevocable trust. This trust cannot be terminated or modified without a beneficiary's permission. You, the grantor, transfer assets into the trust. This removes the assets from your ownership.

4 reasons you may need an advance directive

When you create an advance directive, you lay out your wishes for medical care in writing. These are decisions you would typically make in person, at the time they need to be made, but the advance directive gives you some insurance if you're unable to do that. You can address things like what lifesaving machines you want the doctors to use and whether or not you should be resuscitated.

Four reasons you may need an advance directive include:

  1. You have severe dementia. You can no longer make choices for yourself. You do not understand the situation or the ramifications of your decisions, and you cannot accurately make your desires known to your family.
  2. You went into a coma. It is impossible for you to communicate your wishes. Without an advance directive, your family has to make those choices for you.
  3. You are suffering from a terminal illness. For instance, perhaps you had a stroke. You can no longer talk or communicate with those around you. Even if you still understand the situation, you have no way to express your desires.
  4. You suffered a serious injury. You may have gotten in a car accident, for instance. When you arrived at the hospital, you were still unconscious. Doctors need to act quickly, and it helps to know what you would want them to do.

Does the family gather to hear the reading of the will?

If you watched a movie where a character passed away, you may have then watched a scene where all of the friends and relatives sat in a room while a lawyer read them that person's will. Does this really happen? Is that how you find out what was left to you?

While this scene can build a lot of suspense and works well in movies, it is not all that realistic in 2018. Instead, the person in charge of the estate makes copies of the will and then mails them out to those who are named in the document. This way, those people have hard copies and they can read them whenever they want. The family members do not have to arrange their schedules to meet up for a will reading, and there's no element of surprise.

Should you give more money to a child who needs it?

You know that you want to be fair when you leave your money to your children. But does that necessarily mean leaving them equal amounts? This is one of the biggest questions that parents have to ask themselves.

For instance, one couple had three children. One of those children had done very well financially, to the point that they had enough money for expensive extras like a vacation house. The next child had not done that well, but did have enough to live without worry and to put money aside to retire.

4 advantages of a special needs trust

You have an heir with special needs, and you are trying to figure out your best course of action during your estate planning. You want to provide for that person and help him or her significantly after you pass away, but you do not accidentally want to do something with unintended consequences. What should you do?

One option is to use a special needs trust. This sets money aside from your estate to help the individual, keeping it in the trust rather than passing it to the person directly. There are some major advantages to doing this, such as:

  • Making sure that the individual is still eligible for government assistance in the form of Medicaid or Supplemental Security Income (SSI). The trust can pay any additional costs over what that assistance covers. Leaving money directly may increase a person's wealth so that he or she becomes ineligible, but the trust does not do so.
  • Ensuring that the money that you leave behind is actually used to care for that individual. If you worry that others may try to take advantage of the person, a trust is safer than a direct gift.
  • Giving you a way to deduct the money for tax purposes.
  • Keeping the funds away from any creditors. For instance, if your heir has outstanding debts, creditors cannot take the money from the trust. It is not technically part of your heir's estate, so it is protected, and you know that it will only be used as instructed by the trust -- to care for the beneficiary.

Hurt feelings may lead to estate disputes

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.

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