A recent study says 60% of Americans do not have a will. However, the Caring.com survey says as adults get older, the percentage of people with estate planning documents increases to 81% for those over the age of 72.
Nearly two-thirds of all baby boomers say they have a plan in place suggesting that as we age, thoughts about passing along our assets become more serious. But, having an estate plan is just as important for younger people, especially those with children.
What are the benefits of estate planning?
Estate planning can include a simple will, or a more complicated trust and is essential regardless of how much money or the types of assets you have. The main reasons for an estate plan include:
- Probate: In New Jersey, probate can happen with or without a valid will to determine how a person’s assets will be distributed. However, estates with a valid will are usually divided according to the decedent’s wishes.
- Reducing taxes: Basic estate planning can help you avoid or reduce significant federal estate taxes or state inheritance taxes. Setting up a revocable living trust, AB trust or ABC trust along with more complicated techniques can significantly reduce tax liability.
- Avoiding chaos: An estate plan is a loving way to care for your family after you’re gone by spelling out your wishes and choosing someone to make those decisions for you if you become mentally or physically incapacitated.
- Protecting beneficiaries: An estate plan can outline the continued financial and physical care for your children, including naming a guardian if they are minors, and protecting adult beneficiaries who are at risk due to bad decisions, credit problems or divorcing spouses.
- Protecting assets: An estate plan is also becoming a popular option to protect against potential lawsuits. Once a suit is filed against you, it’s too late to put a plan in place.
Estate planning is sound financial planning
Wills or trusts are not just for the rich and powerful. Regardless of your net worth, estate planning can ensure that whatever assets you have will go to family members or others as you see fit. If you are a business owner, it can also help bring a smooth transition. An experienced estate planning attorney here in New Jersey will work to find the best plan for you to make sure you protect your assets while you are still here to enjoy them, and that they are distributed according to your wishes when the time comes.