Estate planning will be a boon for your family after you pass away or are incapacitated. Estate plans contain a lot of layers like what financial assets we own, the properties we own, who will be the beneficiaries of my assets, how the assets will be divided, and so on. As you age, your assets keep increasing, so you keep modifying your estate plans. However, the estate planning documents will remain constant. If you need help, contact a New Jersey estate planning lawyer.
The five most important estate planning documents are:-
Financial Power of Attorney: As per this document, you choose an agent who is granted financial rights like carrying out financial transactions on your behalf. You can choose your spouse, children, a trusted family member, or friend as your agent. Financial power of attorney is important if incapacitated and cannot make decisions.
Medical Power of Attorney: You must choose an agent like a financial power of attorney. Here the agent is granted the power to make medical decisions for you. Again this is more needed in case you become incapacitated or have serious ailments in your old age. The agent will ensure all your medical needs are met properly.
Legal Will: A legal will is a document that contains instructions on how all the assets will be distributed. It contains important information like the name of the beneficiaries, guardian for the minor child, name of the property manager, who will get what asset, and instructions on payment of debts and taxes.
Living Trust: A living trust is a more private matter, unlike a will, and more complicated. Here you transfer your assets to a trust. After the assets are transferred to the trust, you become the trustee. You can now mention a successor for your trust who will ensure a fair distribution of assets.
A living will: A living will is like a healthcare directive that mentions which medical treatments you would consider and which you would not be kept alive. The living will mention all scenarios like dialysis, tube feeding, organ donation, intubation, resuscitation, etc.
Estate planning carries a myth that it is only for high net-worth individuals. On the contrary, estate planning is essential for all. It not only helps you save taxes but also reduces the chances of future conflicts arising over the assets and properties you own. Estate planning will give you peace as you will be assured that your hard-earned money is in good hands.