Probably you are growing older and have loved ones whom you desire to leave measurable assets for when you finally pass on to the other side. You likely may also be thinking about how your property and business will be managed should you become victim of a terminal disease, mental or physical incapacity. Or is it that you wish to make the inheritance process easy for your family? All these are aspects involved in estate planning, and there are important things and tips you need to know before creating an estate plan. As a resident and owner of property in Paramus, here are important tips for estate planning in Paramus, New Jersey zip code 07652.
1. Estate laws change from time to time
Laws backing estate planning are dynamic and ever-changing. These laws affect your estate plan. You can take advantage of some of these laws while trying to avoid the negative implications of others. When a law or requirement is violated, your estate plan can become void. It is advised you hire an experienced estate planning attorney in Paramus who will offer you legal guidance in creating your estate plan, ensuring it is done right.
2. Transferring your assets
You can simply write in a will the names of those who you want to transfer your assets to. In New Jersey, every estate involving a will regardless of how small or large, must go through the complete probate process. This is because New Jersey has not adopted the simplified probate procedure for small estates. You can alternatively use a living trust to transfer assets to beneficiaries since assets held in a trust are owned by the trust, and so will pass on to the beneficiary without first going through probate. Trusts also guarantee that your beneficiaries will receive their inheritance immediately after your death (except for minors who have to wait till they attain 18), and avoid the publicity and cost of probate.
3. You have to plan for tax implications
Tax implications on estates are ever changing. Whereas most estates in many other states are taxable, as of January 2018, estate taxes were made nonexistent in New Jersey. However, your estate might still be subject to federal estate tax. If your estate values over $11.58 million, then a considerable chunk of your estate will go to the federal government. There is also inheritance tax to look out for in New Jersey. If your beneficiary is your spouse, civil union or domestic partner, child, grandchild, great-grandchild, parent, grandparent, child or step-child, then there will be no inheritance tax. Gifts of over $25,000 will attract gift tax.
4. You can avoid taxes by creating a trust
Assets distributed by a Last Will and Testament will pass in obeisance to estate laws. This means all tax implications will affect your estate. You could decide to create an irrevocable trust instead. Property contained in an irrevocable trust, no matter how large, will pass to the beneficiary without tax implications.
5. Take note of beneficiary designations
Insurance policies, IRAs and a few other assets do not pass according to a will. This is because they already have beneficiary designation; i.e. you have attached the name of a beneficiary to the account during its creation. If you forget that you had designated John as your IRA beneficiary, and then later name Stephan as the IRA beneficiary in your will, the IRA will definitely go to John. You should take note of such accounts with beneficiary designations.
6. Disability planning
Should the need arise due to disability, you would need someone to act in your stead, look after your business and make important decisions on your behalf. Disability can arise suddenly due to ghastly accidents, terminal diseases, and mental incapacity. You should consider creating a financial power of attorney to appoint someone to make financial decisions for you, and a medical power of attorney to appoint someone to make medical decisions for you.
Lots of older adults end up in nursing homes which are highly expensive. You can avoid this through guardianship planning. This enables you to name a person who will be responsible for looking after you when you get old.
If you have children below 18, ensure you appoint a guardian in your will. The guardian will be responsible for holding the assets and using them for the children’s benefit until they come of age.
Hire an estate planning attorney 07652
An estate planning attorney in Paramus is highly conversant will estate laws in Paramus and knows how to create an estate plan that covers your needs. He’ll also help in updating your estate plan when necessary, and avoiding the common mistakes associated with estate planning. Locate an estate planning attorney today.