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New Jersey Wills & Estate Law [5 Planning Tips]
New Jersey estate law can be confusing, making it difficult to know where to begin. As confusing as it is, it is also one of the most important things you will do for yourself and your loved ones. Proper estate planning will give you peace of mind while you are living and ensure your loved ones are cared for when you pass away. Follow some estate planning tips to begin the process.
Estate law planning tips for New Jersey residents
Estate planning allows people to choose where all the assets go when they pass away. It is much more complicated than simply designating money and property to beneficiaries. When done correctly, it protects people when they are alive and families after they pass away. These tips should be incorporated into the estate planning process.
1. Choose an executor
An executor protects the deceased person’s property until the taxes and debts have been paid. Once the financial commitments are met, the executor settles the estate and transfers the property. Out-of-state executors must pay a bond. Also, out-of-state executors can become overwhelmed with the time commitment of settling the estate in New Jersey.
Most people choose executors who live in New Jersey to simplify the process. Executors can be close to family members and friends, but these individuals should meet specific qualifications. Executors must be detail-oriented and 18 or over. It is wise to go over the choice with an estate planning attorney.
2. Get medical directives and a power of attorney
People should get medical directives that allow someone else to make medical decisions if the need arises. Also, a Power of Attorney is essential. This document designates a person to handle financial affairs if the head of the estate is unable to do so. These pieces of paper protect estate holders.
3. Use gifting to avoid high taxes
New Jersey has an inheritance tax law that imposes a tax on beneficiaries. Parents, children, and spouses are not subject to the tax, but nieces, nephews, friends, siblings, and others are. Estate law does allow people to avoid paying some of the taxes through gifting. Gifts, including money, are not taxable as long as the amount does not exceed the annual exclusion. In 2019, the annual exclusion was $15,000.
4. Protect minor children
Those with minor children need to include a guardianship plan when estate planning. The plan should name the guardian and include information about financial support for the children. Parents should also protect children’s finances and property. Many adults choose to name the guardian as the trustee for the children’s property.
5. Add payable-on-death designations to bank accounts
Bank accounts do not have to go through probate in New Jersey. Instead, people can add payable-on-death designations to all bank accounts. The beneficiary will not have access to the account until the account holder dies. Once the account holder passes away, the beneficiary can access the money without going through probate.
Get help with estate planning
You need to choose an executor, set up the proper directives, use gifting to avoid high inheritance taxes, and protect your minor children when planning your estate. Also, it is important to add payable-on-death designations to all your bank accounts. These are just some of the things you need to do during estate planning. Contact an attorney for additional help with estate planning.
Call (732) 449-0449 to schedule a consultation with Anthony J. Cafaro, P.C. in our Sea Girt office.
NOTE: This is for informational purposes only and does not constitute legal advice.
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