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Bridgewater New Jersey Estate Planning Law Blog

Cancer affects what estate planning documents to draft

It's important for everyone to have an estate plan in place no matter how healthy or young that they are. Cancer and other illnesses don't discriminate after all. You can fall ill with a medical condition at any point in your life. If you've been diagnosed with cancer or terminal illness, then it's even more important that you get certain health-related legal documents in place sooner than later just in case.

Advance care planning involves a lot of research, self-reflection and you talking with both your doctors and your family members. The ultimate goal in doing this is for you to find out more about your condition, treatment options and prognosis.

Why you shouldn't rush to distribute assets after a testator dies

A testator's loved ones often come out of the woodworks en masse to stake claim to their loved ones' assets immediately following their death. You as the executor shouldn't give in though. It could be quite costly if you do.

Some of the assets that you may not want to distribute to heirs until you're about to wrap up the probate case is titled property. You'll instead want to check the deed to see whose name it's in. You'll then want to learn about New Jersey's property transfer laws and how to best get it to the heir in alignment with the testator's wishes.

What are the tax implications of passing down a retirement plan?

One of perhaps the biggest guffaws that individuals make when planning their estates is not thinking of the tax implications that making certain decisions will have on their beneficiaries. Certain types of retirement investment plans require beneficiaries to take regular payouts from them. This can adversely impact a beneficiary's taxable income unless other provisions are put in place to prevent this from occurring.

People who have individual retirement accounts (IRAs) or 401(k)s are generally required to take required minimum distributions (RMDs) from them starting at age 70.5. Any beneficiaries who inherit these may be required to take RMDs as well. This gets counted by the Internal Revenue Service (IRS) as taxable income.

How should you fund your living trust?

Many individuals set up a revocable living trust to provide for their loved ones after they're gone. While many people assume that they have to have a tremendous amount of wealth to set up one of these, they don't. You can take some of your most valuable assets and place them in the trust. You can also set aside small amounts of cash or your stock dividends into this estate planning tool. These are just some of the many ways to fund your living trust.

One of the reasons that so many individuals place their assets in a living trust is to make it easier for their loved ones to have their assets transferred to them after they've passed away. By placing them into a trust, it allows many valuable assets such as a home, investment portfolio, bank accounts and insurance policies to be seamlessly transferred over to their loved ones as they'd planned.

Why irrevocable trusts are an important asset protection tool

Irrevocable trusts are those that generally cannot be modified once they've been formed and funded. This means that even the grantor, or the person who sets it up, generally can't ask to have the property that they've placed into the trust back. That individual can't manage the assets contained in the trust either. Irrevocable trusts continue to be popular among individuals who are looking to protect their assets as part of their estate plan.

There are many benefits associated with an individual placing their assets in an irrevocable trust. While some grantors may see it as a negative that they cannot access nor manage any of the assets placed in it, one positive is that the property is completely protected from being assessed an estate tax when that individual dies.

The steps that you should take immediately after probating a will

One of the first steps that you should take as the executor of a New Jersey resident's estate is to probate the testator's will. This is only the tip of the iceberg in terms of your responsibilities though. There are several other steps that you should handle as part of the estate administration process.

You'll want to take immediate possession of any of the testator's personal property. It's around this same time that you'll need to open an account for the estate as well.

Why does it take so long to settle a New Jersey probate case?

It's often not long after a family member dies that their loved ones begin clamoring to get a piece of what they feel that they're due from it. While many heirs may think that they can simply walk into a decedent's home and take what they feel is rightfully theirs, this is not the case. There are steps that an executor must take before this can happen. This is why it can take a while for a New Jersey a decedent's assets to be distributed to their heirs.

Most beneficiaries wait on average six months for an estate to be settled. It's during that time frame that all of a testator's assets have to be inventoried and potentially appraised. An executor is also responsible for filing a decedent's final tax return and for contacting and paying off their creditors. It's only once all this has been done that a testator's personal representative can finally distribute any remaining assets to any heirs.

Don't skimp on your disability insurance

Many workers are allowed to purchase disability insurance when renewing their employment benefits each year. Others have the option of purchasing such coverage on their own in the marketplace. Few individuals take advantage of the opportunity to purchase disability insurance though. Many individuals don't take out this coverage because they don't think that they'll get hurt. They don't realize that disability insurance is a key way to protect their assets.

Yes, you're right. Your health insurance will cover most of your health-related costs if you become sick or injured. That coverage won't help you if you become so ill or suffer such a debilitating injury that you're unable to work. While you may ultimately qualify to receive disability payments if your medical condition is terminal or so serious that it prevents you from working at all, it's bound to take some time for you to qualify for such benefits. Disability insurance can kick in much sooner than that.

Does serving as the executor of an estate come at a cost?

It's a great honor to be chosen as the executor of someone's estate. It means that the testator, or the person writing the will, has a great deal of respect for you and that they trust you to carry out their final wishes. Being chosen as the executor of someone's estate does come at a price though.

Serving the role as executor of someone's estate can take a lot of time. You will spend a lot of time running back and forth filing paperwork with the county probate court. You'll have to prepare the testator's final tax return and negotiate with their creditors. You'll have to inventory their assets and reach out to their heirs to make sure that they receive what they're due. There are many other responsibilities that you have in this role as well.

What estate planning documents should childless couples draft?

One of the steps that couples take when they find out that they're expected a child is to sit down with an attorney to engage in estate planning. They often do this to appoint a guardian to raise their kids and to make financial arrangements if something happens to them. While these aren't some of the hard decisions that childless couples have to make, there are other difficult choices regarding the legacy that they want to leave that they have to decide on though.

While many individuals think that they should only draft a will if they have something of value to leave to their heirs like children, this isn't the case. Everyone needs to have a will.

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