One of the questions that we commonly receive as estate planning attorneys in New Jersey revolves around what exactly is an estate plan. Afterall, as long as you have a Last Will and Testament, doesn’t that mean that any assets that are left behind will be distributed exactly how you envision it? Not exactly. A comprehensive estate plan is necessary for any person, regardless of how old you are. Also, an estate plan consists of a lot more than just a Last Will and Testament. Here are some examples of documents that should always be part of your estate planning in NJ.
1. Estate Planning Documents Needed: Last Will & Testament
One of the estate planning documents needed is a Last Will & Testament. Your Last Will & Testament is perhaps your most important estate planning document because it delineates how you want to distribute your assets after you pass away. A Last Will & Testament is essential to determining who will inherit your property as well as how much they will inherit and when they inherit it. In your will, you will also need to select an Executor as well as a Trustee for any testamentary trusts that you create in your will for your beneficiaries. Keep in mind that if you have minor children, you can also use your will to name guardians for them in the event of your untimely passing. This process is complex so you should avoid thinking is LegalZoom good for Wills and trust the professionals.
2. Important Documents for Estate Planning: A Revocable or an Irrevocable Trust
Depending on your situation, one of the most important documents for estate planning you need is a trust. It may benefit you to create a revocable (living) or an irrevocable trust. A revocable living trust is revocable which means that any property that you retitle in the name of the trust you can always retitle back in your name. In many cases, this can help a person to feel more comfortable with the process of using a trust as part of their estate plan. However, there are times where it may be more beneficial to use an irrevocable trust. For instance, if estate tax planning is a big concern for you, if you are putting together a long-term care plan or you have a disabled family member that you would like to provide for. Our experienced estate planning attorneys will provide you with an in-depth explanation as to the best option for you.
3. Estate Planning Documents Explained: Financial Power of Attorney
Another one of the important documents for estate planning is a financial power of attorney. A Financial Power of Attorney authorizes someone (such as a spouse or close family member) to make important decisions on your behalf in the event that you aren’t able to do so for yourself. This includes everything from financial transactions to the transfer of property to the approval of legal agreements. A Power of Attorney offers a wide range of authorizations, which gives you more control over what you can allow someone to do on your behalf.
4. Medical Power of Attorney
One of the important documents for estate planning you need to have is a medical power of attorney. This document deals with medical decisions made on your behalf when you are unable to do so yourself due to incapacitation. Having an advanced healthcare directive in place can help to make things much easier in terms of communicating with a doctor or a hospital. Your treatment team will look to the person that you designate to make medical decisions on your behalf which can give your family a great sense of peace in knowing that you’re being cared for according to your wishes. There are several mistakes to avoid with estate planning. Not having a medical power of attorney is one of them.
5. A Living Will
There are many people who often confuse a Last Will& Testament with a living will. However, these are two completely separate, albeit important, documents. A living will is a written expression of a person’s wishes for their medical care if they are unable to make those decisions for themselves, especially concerning end of life decisions. This document goes hand-in-hand with Medical Power of Attorney and can provide your family with a more comprehensive view of your medical wishes.