One of the biggest mistakes that people make is not having a proper estate plan in place. Estate plans go beyond a form Will and Power of Attorney that you can find on an online “estate planning” website and paid $149.00 for. Rather, estate planning is a process whereby you plan for your current situation (financial and healthcare), anticipate life changes, and create a dispositional plan for when you ultimately pass away. A large combination of factors are considered in determining how to best plan for the future.
While all adults should have an estate plan (or at least estate planning documents) in place, I have compiled a list of ten (10) life changing events that call for you to create or update your estate plan (in no specific order):
- Having Children – If you have a child, adopt a minor, or have a new minor step child, your estate plan should be amended to reflect the new addition. You should ensure that a Guardian is appointed, and proper precautions are put in place should your child inherit as a minor. If there is nothing in place, a court will need to appoint a Guardian of the Property for the minor. This process involves court fees and annual reporting with the Court.
- Getting Married – Marriage itself is not enough to guarantee that your spouse will inherit when you pass away. Please see my article at https://www.hyneselderlaw.com/why-having-a-will-matters-how-new-jersey-laws-may-prevent-your-spouse-from-receiving-your-entire-estate/ for more on the topic. To ensure that your spouse, children, or other loved ones receive exactly what you want them to, it is extremely important to update your estate plan. Getting married also opens up planning options that are not available to singles.
- Divorce or Death of Spouse – Whether it be a divorce or a death of a spouse, changes to your estate plan may be needed. Whether you need to change who is agent under your Power of Attorney or who inherits which specific asset, it is always best to not leave those decisions to New Jersey law. While divorce automatically disinherits an ex-spouse from your Will in New Jersey, the same is not true of all assets. It is always better to be safe rather than sorry.
- Death of Beneficiary – The last thing that anyone wants to do after they have lost a loved one is to update their estate plan. However, this is a necessary precautionary step to ensure that you are protected, and so that your assets go to the people that you want them to.
- Beneficiary Who is Receiving or May Receive Government Benefits – Sometimes accidents happen or aging occurs and loved ones become disabled or need a higher level of care. Often they are unable to pay for their care without government assistance (i.e. Medicaid). Sometimes a loved one has a child, and that child is born with a developmental disability and will rely on government benefits for their entire life (i.e. SSI). In many instances a direct inheritance can affect one’s government benefits that they are receiving. Proper planning can allow your money to go further for that person by supplementing government benefits, rather than supplanting them.
- Aging – I have found that people hate planning for aging almost as much as they hate aging itself. This is why, in my experience, many people do not have estate plans. However, if you want to maximize the potential of planning for your care and leaving assets behind for loved ones, it is important to plan early and plan often. The sooner that you visit an estate planning and elder law attorney, the better off you will be. Waiting until the last minute may work for changing your oil or getting new tires, but it rarely works when trying to save money for your loved ones and protect your assets from your cost of care.
- Change in Finances – An increase or decrease in your assets could significantly alter your current estate plan. For example, an increase could subject your estate to New Jersey and Federal Estate Taxes, which can be avoidable. By restructuring your estate properly, you can ensure that you get the most bang out of your buck.
- Buying a House – Buying a house is a huge step in anyone’s life. There are often additional circumstances that go along with buying property that need to be planned for. For example, if two unmarried people buy a house together, the house does not automatically go to the other upon death, even if that was the intention. Additionally, many people’s parents assist them in purchasing their first house. If this agreement is not in writing somewhere, the deceased person’s parents may get left out when their child dies. Estate Planners can additionally create plans that shield your property from creditors or avoid the tedious probate process for your loved ones. After working so hard to obtain the property, it is imperative that you create a plan for the smooth disposition of your house should you pass away.
- Moving to Another State – Every state has its own set of laws. Although many may be consistent, even minor variations can affect your estate plan negatively. If you do move, it is important to meet with an attorney in your new state to review your estate plan.
- Change in the Law – A change in the law can completely alter your estate plan. What was good advice from your attorney yesterday may not be good advice today. Unfortunately, changes in the law cannot generally be predicted, and are often impossible to plan for.
At Hynes Law Group, we are dedicated to ensuring that our clients have a suitable trust and estate plan in place and that their wishes are documented and honored. For readers of our blog and blog posts, we offer a free review of your current trust and estate plan. To take advantage of this offer, please fill out our “Contact Us” form at http://www.hyneselderlaw.com/contact-us/ and type “Document Review” in the comments section, or call us at 908-514-8008 and be sure to mention that you read this blog post.
-Jesse R. Hynes, Esq.
Hynes Law Group
2 South Avenue East, Suite 200
Cranford, NJ 07016