 NJ Estate Planning
Estate Planning in New Jersey is the process
of accumulating and disposing of an estate to maximize the goals of
the estate owner.
The various goals of estate
planning include making sure the greatest amount of the estate
passes to the estate owner's intended beneficiaries, often including
paying the least amount of taxes and avoiding or minimizing probate
court involvement. Additional goals typically include providing for
and designating guardians for minor children and planning for
incapacity.
Estate planning
tools
The tools involved in estate
planning include the will, various types of trusts, beneficiary
designations, powers of appointment, various forms of property
ownership (Joint tenancy with rights of survivorship, tenancy in
common, tenancy by the entirety, etc). |
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Gifting, and powers of
attorney, specifically the durable financial power of attorney
and the durable medical power of attorney. After widespread litigation and media
coverage surrounding the Terri Schiavo case, virtually all estate
planning attorneys now advise their clients to also create a
living will. Note that many people (and even some
attorneys) confuse a living will with a durable medical power of
attorney. The former controls solely those decisions that must be made
at the end of the patient's life, while the latter is used to give
decision-making authority to someone else (usually a family member or
close friend).
This person, the attorney-in-fact, then makes all
medical decisions leading up to to the person's death, but has no such
power to make end of life decisions for the patient.
Those decisions
are made by the patient in the living will; in the absence of a living
will, and where the patient is incapable of making end-of-life
decisions for him or herself, such choices are left to family members.
Remainder interests
The tax code allows wealthy people to set up charitable remainder
trusts and set up qualified personal residence trusts to own their
personal residence yet leave it to their children without estate tax.
Paying taxes
Because the United States tax code does not tax life insurance
proceeds as income, a life insurance trust could be used to pay estate
taxes. However, if the decedent holds any incidents of ownership like
the ability to remove or change beneficiary, the proceeds will remain
in his estate. For this reason, the trust vehicle is used to own the
life insurance policy and it must be irrevocable to avoid inclusion in
the estate. |
