After years of hard work and contribution to society, your sunset years ought to be characterized by peace and a sense of accomplishment. The last thing you want to imagine is someone dragging your name to court over your estate. A solid estate plan is crucial to ensure your loved ones are protected.
While being ready for the inevitable is wise, creating a thorough estate plan can be daunting, as can keeping your will up to date.
So, what happens if you do not have an estate plan?
1. You could set your family up for a costly legal battle
Should something happen to you, like incapacitation or death, then someone must make important decisions on your behalf. These could include healthcare decisions or financial decisions. Without a clear financial and medical power of attorney, your loved ones might fight over who is best suited to make these important decisions. And if you pass on without a valid estate plan in place, New Jersey intestate laws, rather than you, will determine who inherits your wealth.
2. It can be a costly endeavor
From gathering your assets to figuring out and paying off your debts to identifying and verifying beneficiaries, intestate succession can be a very tiresome exercise. It can also eat up a huge chunk of your estate. The last thing you want is the probate process gobbling up what would have otherwise given your loved ones a head start in life.
3. Estate taxes could eat into your loved ones’ inheritance
New Jersey no longer has an estate tax. However, if your estate is large enough, you might still pay federal tax. Estate planning strategies that help you reduce the size of your estate, like giving away gifts and setting up a joint ownership with the right of survivorship, can help you avoid certain taxes.
An estate plan speaks for you when you are no longer capable or around to articulate your wishes. However, it must be valid to serve its intended purpose.
If you are interested in creating an estate plan, kindly contact Michelle E. Smith, Esq.