Estate planning can seem like the simple act of drawing up a will to express your wishes at some point, but in reality, this is a gross oversimplification. It is a matter that should take some thought before you start to create any documents. Plus, a will is not the best choice as an asset transfer vehicle in many instances.
In this post, we will look at a step-by-step process that you can use to approach this important responsibility from the proper perspective.
Evaluate Your Financial Position
When you initiate the process, you should make a list of the assets you expect to be able to pass along, and you should consider liquidation issues.
Most people do not have to worry about the federal estate tax, because the exclusion is $12.92 million this year. The exclusion is the amount that can be transferred before the tax becomes applicable. However, estates that are exposed face a 40 percent maximum rate.
There are state-level estate taxes in 12 states, and there is a separate estate tax in the District of Columbia. Fortunately, New Jersey is not one of the unlucky dozen, but a state-level estate tax could apply to your estate if you own valuable property in a state with an estate tax.
Define Your Goals
A lot of people do not understand the fact that there is an estate planning solution to satisfy just about any objective. It can be more than an exercise in slicing up a pie into individual slices and handing them out all at once.
The ideal way to provide assets for one person on your list may not be appropriate for the next.
For example, some people are perfectly capable of managing a significant inheritance that they receive in a lump sum. For others, this would be a recipe for disaster.
If you are leaving assets to younger family members, you may want to provide incentives to help them reach their full potential.
Most people with disabilities rely on need-based government benefits, and a windfall of money could cause a loss of eligibility. There are steps that you can take to make a person who is in this situation more comfortable without jeopardizing their benefits.
These are a handful of the different scenarios that can present themselves. You may not know how to achieve your goals procedurally, but if you clearly define them, you are halfway there.
Consider Nursing Home Costs
It is hard to wrap your head around the concept of living assistance when you have been very capable all of your life, but the statistics tell a compelling tale. Seven out of every 10 seniors will need some type of long-term care, and 35 percent of elders ultimately reside in nursing homes.
You can expect to pay about $100,000 for a year in a nursing home in the Warren, NJ area, and costs have been rising. If you are married, your family may face two different rounds of nursing home bills.
Medicare does not cover the custodial care that nursing homes provide, but Medicaid will pay for these facilities. It is possible to position your assets wisely with future Medicaid eligibility in mind, but it takes careful, informed planning.
Consult With an Attorney
When you know exactly what you want to accomplish, it is time to develop a plan with the assistance of a licensed estate planning attorney. When you choose our firm, we will gain an understanding of your situation and create a custom-crafted plan that will bring your vision to fruition.
Attend a Free Webinar!
You are here because you’re looking for information about estate planning, and this is definitely the ideal place to be. We update this blog on an ongoing basis, and there are countless existing posts that you can check out at your leisure.
There are other written materials as well, so you should take a look around to build on your knowledge. In addition to this avenue, we also provide webinars on a periodic basis that cover all of the most important topics.
This is another free opportunity, and you can visit our webinar schedule page to learn more.
Contact Us Today!
If you are ready to work with a Warren, NJ estate planning lawyer to put a plan in place, call us at 908-222-8803 to schedule a consultation, and you can alternately fill out our contact form if you would rather send us a message.
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