Kickstart Your Year with Estate Planning
Seize the Chance to Initiate or Update Your Estate Plan, a Feasible Undertaking That Ensures Adaptation to Evolving Requirements in Ocean and Monmouth County, NJ
The month of January represents a fresh start for many of us – a time to reflect on things we would like to improve upon and goals we desire to achieve. The excitement that a new year brings is also very useful for creating motivation and momentum to accomplish important goals we have been putting off like establishing a fitness regiment, getting out of debt, or creating an estate plan.
Often, the actions that are most beneficial to us and our loved ones are not so glamorous and easy to want to avoid. However, unlike getting in shape or getting out of debt, estate planning does not need to be a long, drawn-out process, and it doesn’t require a tremendous amount of energy or effort from you. It does, however, require you to take some action.
If you have not already worked with an estate planning attorney to create a comprehensive estate plan tailored to your needs and the needs of your family, January is the perfect time to do that. Even if you have already executed a will or established other components of your estate plan, as your needs, financial situation, and family dynamic change, it is wise to revisit your estate plan and revise it as needed.
The Importance of Early Estate Planning and Periodic Plan Revisions
It is unfortunately common for individuals and couples to put off creating a comprehensive estate plan until they are nearing their golden years. However, deaths among middle aged individuals in the U.S. has been rising since 2010. Plus, proper estate planning does not only address the divestment of your estate after your death – it also allows you to make your medical wishes known in the event that you become incapacitated and are unable to make medical decisions for yourself.
When a person decides to “check the box” on creating their estate plan, they often do so with their current circumstances in mind. For example, perhaps a married couple created their estate plan to designate a guardian for their children and how their assets will be protected in a trust for their children until they reach a certain age if they are still minors when their parents pass. If that same couple does not revisit their estate plan for another 30 years, it will likely become irrelevant to their present needs and the dynamic of their family.
For example, let’s say the husband predeceased the wife, who is now 65 and has a strong family history of Alzheimer’s disease. In that case, with her children now grown, her main concern may be to protect her home and other assets through a Medicaid trust, should she require long term care in a nursing home or memory center. She will also likely want to appoint a springing power of attorney or an individual who will become responsible for her legal and medical affairs if and when she loses capacity.
As time passes from the creation of your original estate plan, it is also necessary to review named beneficiaries in your estate plan. Life dynamics like divorce, childbirth, and other family affairs may alter your intentions for your estate, which must be reflected in the legal documents governing the divestment of your estate like a will and/or trust.
What to Ask Yourself about Your Estate Plan at the Start of a New Year
As you can see, not only does each individual require their own unique estate plan, but that plan will typically evolve through the course of the individual’s life. Generally speaking, there are often four important components to an estate plan: a medical directive, power of attorney, will, and trust. It is important to note that while a trust may be essential for some individuals, they are by no means necessary for everyone. Whether you and your beneficiaries would benefit from forming a trust depends greatly on your assets and goals. Nearly everyone, however, will benefit from having a medical directive, power of attorney, and will in place.
A medical directive is a legal document that sets forth your medical wishes in the event that you become incapacitated. It might include a broad do-not-resuscitate order, or it might define specific conditions that must be met before resuscitation is withheld. Your medical directive may also specify certain medical treatments and procedures that you wish to decline, like a blood transfusion or organ transplant.
A power of attorney is a legal document in which you give another individual legal authority to make medical, legal, or financial decisions on your behalf. You may give an individual authority to make decisions for you in just one area or in every way in the event that you lose the mental capacity to make these decisions for yourself. You might lose capacity due to being unconscious after a serious injury or illness or due to some type of neurodegenerative disease like dementia.
Finally, the component of estate planning that many regard as the most important: wills and trusts. A will is a document that designates who the beneficiaries of your estate will be and how your assets will be divided. Some individuals, particularly those with larger estates or wealth that is concentrated in real estate or other investments, may, for various reasons, choose to form a trust and put some or all of their assets into the trust with named beneficiaries. Depending on the type of trust that is formed (which is impacted by the goal of the trust), the individual creating the trust may maintain control of the trust assets or they may need to divest ownership of all of their assets that are put into the trust.
Art and Impact of Estate Planning Language
Estate planning is a complex area of the law. Far too many people treat the creation of a will as a quick, plug-and-play endeavor. However, minor differences in how your will is worded can make an enormous difference in how your assets will be divested. For example, let’s say you have three children, and each of your children has two children of their own. Perhaps your will was written to divide your estate into three equal parts between your three children. However, if one of your children were to predecease you, the specific wording of your will could result in your deceased child’s surviving children being disinherited or your estate being divided into 4 equal parts (a quarter each to your surviving children and a quarter each to the two children of your deceased child) or each of your surviving children receiving a third of your estate (as they would have if their third sibling had not passed) and the two surviving children of your deceased child spitting their deceased parent’s one third of your estate equally. The latter option may be expressed, in part, through the use of the term “in stirpes” or similar language.
This is just one example that illustrates how a few simple words can dramatically change the outcome for your beneficiaries when your estate is administered. When you are creating your estate plan, you do not just want to work with a lawyer who is experienced in estate planning law. You need an estate planning attorney who will take the time to ask you detailed questions to flesh out your true desires for your estate and your care and well-being while you are still alive.
Our Experienced Attorneys Can Help Revise and Update Your Estate Planning Documents in Brick, New Jersey
Make this year the year you invest in your legacy, the protection of your assets, and the interests of your family. To set up a free initial consultation to discuss your unique estate planning needs, please contact Bronzino Law Firm today at (732) 812-3102. With Brick and Sea Girt offices, we regularly assist clients like you in Toms River, Red Bank, Rumson, Colts Neck, Bayhead Freehold, Stafford, Manchester, and other towns throughout the Jersey Shore.