You have assets. You have a family you love. You have goals for how your assets support your family and values. But, what derails having a Plan for your estate planning?
- Doing Nothing. Don’t worry - if you don’t create a Will New Jersey has one for you. However, it’s not likely to meet your goals. Estate planning is an area of the law where you are empowered to control what happens next. Questions:
- Do you want your children or grandchildren to get outright access to your assets at the wise age of 18?
- Do you want your spouse to have to post a bond of $1000’s of dollars to be able to inherit your assets?
- If you are married and have no children do you want some of your assets to go to your parents?
- If you aren’t married and have no children do you want your parents to have your assets before your siblings? For all your siblings to inherit equally? To leave assets to nieces and nephews or cousins you may have no relationship with?
If the answer to any of these is “No” then New Jersey’s default “Will” is not for you. See an attorney to create a Will that matches your unique family, assets, and goals.
- Ignoring Assets that Don’t Pass under the Will. A Will only controls assets that are in your sole name when you die. Joint assets go to the other owner; assets with beneficiary designations like 401k, IRA, and life insurance go to the beneficiary. Getting your Will done is just the first step. Most people ignore the second step of (1) considering if joint assets are consistent with your intent (ie: that “convenience” bank account with $64,000 where you named you son as joint owner of to “write checks” - yeah, that just goes to him); or (2) changing the contingent beneficiary of insurance or IRA’s so those assets to pass to the trusts you created in your Will (ie: you create a trust for your children, but all assets are in IRAs and life insurance so they get the assets at 18 regardless of your careful planning).
- Considering your Fiduciaries Without Guilt. Naming your mother-in-law as guardian because “she will be mad if I don’t” is not a good reason. You are dead when this becomes an issue so shouldn’t the question be “who is the best person to guide my child to adulthood?”. That may be a friend or sibling. Naming your son as Executor because he is oldest notwithstanding that he is a veterinarian with a demanding job in Oklahoma and your younger daughter is a bookkeeper who lives two towns over. The question should be “who will do a better job” - and being an Executor is a job. Naming all three kids on your power of attorney so nobody is “insulted”. The surefire way to have your wishes when you are incapacitated to be carried out at the speed of maple syrup dripping from a tree in Vermont in January - slow - or invites litigation when they don’t agree.
