Estate planning is the process of developing a plan for the transfer of your property at your death. An estate plan can be simple or complex. The need for simplicity or a more complex plan will depend on your own assets, your family dynamics, the possible problems faced by your heirs, tax issues and legal limitations.
For example, if at your death all you are survived by one child and your only asset is a small bank account located in Burlington County, then a simple plan of naming that child as the beneficiary of your bank account will suffice.
Many estates, however, are not so simple. Second marriages, children facing divorce, an estate that is subject to the New Jersey Estate Tax, are all common complications that require more thought. If your child has a troubled marriage, your Burlington County estate-planning lawyer can draft a protective trust to hold the assets you leave that child so the problematic son-in-law cannot claim ownership over the inheritance. This is more complex than simply giving your child the money outright, but when the divorce papers are filed, your child will thank you for the protective trust.
When developing an estate plan the principal document at the core of your plan will be a will drafted by a Burlington County estate planning attorney. Your estate planning attorney does not act alone. He or she may seek advice from an accountant, a financial planner and perhaps a life insurance expert. In another example, say you are a Burlington County resident in a second marriage with children from the first marriage. At your death, you may want to give some assets to both your children and your second spouse.
A typical plan would include the purchase of a life insurance policy from your insurance expert. This will be held in a trust drafted by your Burlington County estate attorney that provides your children with a tax-free cash inheritance at your death. In the trust, this asset is sheltered from the children’s spouses and creditors. Your spouse would then inherit the rest of the estate, such as the house, 401k and investments, tax-free. Your financial advisor would manage this.
The whole family stands to benefit from estate planning, when it is performed by an experienced, competent estate planning team.
Please contact our office for a free consultation. Wills, Trusts and Estates, It’s all we do!