Five common myths about estate planning

Estate planning is something a lot of people want to put off or avoid altogether, which has given rise to a number of persistent myths. Here are the top five, debunked by leading New Jersey estate planning attorneys.

  1. I don’t have a Last Will and Testament: Although this sounds like a statement that could be true, it just isn’t. The truth is, the State of New Jersey has a legal process which will determine how your assets will be distributed in the event of your passing – essentially, a state-bestowed Last Will and Testament. Rather, you don’t have your own personal Will – and that means you have no control over your own property. Making a Last Will and Testament is a simple process and it allows you to ensure that the people or organizations you care about the most are cared for, rather than the State.
  2. A trust is for the wealthy: Common sayings such as “Being a trust fund kid” have helped establish the idea that trusts are only for people in a high income bracket – but it just isn’t true. Trusts are a useful tool for many people, regardless of the size of their assets. They can be used to limit inheritance taxes and ensure your loved ones get the full benefit of your assets rather than the state. They are also useful to families where you would like to ensure your children only inherit at a certain age, or use their inheritance for certain activities like attending college. Trusts also help ensure that your beneficiaries have immediate access to your assets in the event of your death rather than having to wait out the probate period, helping to support themselves properly.
  3. I don’t need an attorney to develop an estate plan: While there are resources available to people who want to develop their estate plan themselves, there are plenty of reasons why having the insight of an experienced attorney is important. Firstly, they can spot areas of conflict easily and eliminate them effectively. Secondly, they will ensure your estate plan is properly in line with your goals and cannot be contested. Thirdly, they are able to simplify the process as much as possible, even in the event of a very complex estate. This removes the potential for confusion and contestation, as well as preventing the potential mismanagement of your estate.
  4. I’m too young to have an estate plan: If you are legally an adult and have any assets to your name, you need an estate plan – plain and simple. The fact is accidents and tragedies happen and it is important to have some peace of mind knowing your assets are going to the beneficiaries you choose. Whether you want to ensure a family heirloom goes to a loved one, or that your savings go to an organization close to your heart, it’s important to have a solid legal footing which spells out your goals. Additionally, financial and medical directives will help clarify decisions that need to be made in your best interests should you be unable to do so. This covers important issues such as how you would like to be cared for in the event of a coma, or whether or not you would like advanced life-saving medical treatments.
  5. I don’t need a living trust if I have a Will: These are two very different legal measures which have different purposes. A Will is only active in the event of your passing, while a Living Trust will bring certain benefits (including tax benefits) and protections during your lifetime, even in the event you are incapacitated. A Will only allows assets to be accessed after the legal processes which follow your passing in the form of an inheritance, whilst a Living Trust will allow your dependents to access support from it’s assets at any point. It’s advisable that if you have more than $100,000 in assets you have both a Will and Living Trust.

Comprehensive estate planning with our New Jersey law firm  

If you want to find out more about estate planning and the benefits thereof, the law firm of Sedita, Campisano & Campisano, LLC, can offer you expert estate planning advice. In addition, we can assist you with creating a trust, Last Will and Testament and drawing up Power of Attorney documents. For more information, please contact us today.

Why estate planning is essential for same-sex couples

Since the legalization of same-sex marriage, couples have been enjoying the privileges and responsibilities that come with this exciting life-changing event. One of these challenges is realizing how your estate plan can change to include your new life together. Here are four things to consider from experienced NJ estate planning attorneys:

  1. The portability clause: This Federal Estate Tax clause is an estate-tax exclusion now available to legally married same-sex couples. Currently limited to $5.34 million, this means unused exclusions can be passed on to the surviving spouse, assuming there are no prior lifetime taxable gifts. This means you no longer require a trust to ensure your spouse receives your exclusions, although a trust is still recommended for increased protection against creditors and control over the distribution of the deceased assets.
  2. Qualified Retirement Plans and IRAs: Your spouse is now legally recognized as the sole beneficiary of your 401(k) by default. To modify this, you would have to get consent from your spouse and officially name a new beneficiary. This gives spouses in same-sex marriages additional protection and will supersede any named beneficiaries, including children, from benefiting from your retirement plan. Similarly, your IRA will be included by default into your spouse’s without taking the required distributions or applying any taxation.
  3. Medical directives and financial Power of Attorney: These documents are pivotal to estate planning as they ensure a plan is in place in the event of difficult circumstances. A medical directive will name a person, often the spouse, who will make decisions on your behalf should you be unable to. This includes issues such as advanced medical directives, the use of extreme life-saving measures and what to do should you fall into a coma. A financial power of attorney works in a similar way and gives authority to the named person to control and manage your finances on your behalf if you are unable to do so.
  4. Revoke all current documents: Many couples already have estate plans designed to give themselves and/or their partner and dependents as much protection as possible. With such significant changes in the law, however, these documents are likely to be far less effective than a new estate plan. Reviewing your documents is an option, but can lead to confusion and conflicting issues, so it’s important to revoke them completely and start afresh. Documents of particular importance include your Last Will and Testament and trusts as well Power of Attorneys.

Develop a streamlined estate plan with NJ attorneys 

At Sedita, Campisano & Campisano, LLC, we have over 30 years of experience in New Jersey estate planning law. We can assist you in creating a Last Will and Testament, Power of Attorney and medical directives as well as set up trusts appropriate to your specific needs. Contact us today and let us deliver expert estate planning advice to take care of all your wishes – whether your estate is big or small.

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