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.
If you have a retirement plan, then there are pros and cons to adding a spouse as your beneficiary to these accounts. The type of retirement account that you have determines the benefits that you reap. Your spouse may have to give their consent for you to list anyone else as a beneficiary to your account.
Any annuities, real estate or bank accounts that you share with your spouse may be subject to joint ownership with rights of survivorship. With this, it may be possible for you to pass your assets on directly to your spouse once you die without them ever having to go through the probate process. It’s relatively simple for you to add your spouse as a joint owner of your shared home so that they can inherit it if you pre-decease them.
Another topic that you may want to explore with your spouse as a way to protect your assets is the idea of setting up a trust. It is a tool that many spouses use to transfer assets to their husbands or wives. They can help you reduce your estate tax burden and provide them with a seamless way to assume ownership over your assets after you’re gone. Various types of trusts exist that allow you to do this.
Many legal analysts try to motivate individuals to engage in estate planning early on largely because an individual’s death can come at the most unexpected time. Unless you’ve updated your beneficiary designations, your will and other documents when you die, then you run the risk of things not working out as planned.
An estate planning attorney in Bridgewater can help you in easing asset transfers to your spouse and the next generation.