I don’t need an estate plan. My situation is simple. I just need a basic Will.
I wish I had a dollar for every time someone has said that to me.
Let me first say that whatever your situation is, it is not simple. It is yours, and it needs attention. Maybe you have minor children. Maybe you have adult children. Maybe you have a disabled child or grandchild. Maybe you have a blended family. Maybe you have a child who is a spendthrift, has creditor issues, or is divorced (or might be in the future). Maybe you are concerned about future long-term care costs. Maybe you have a son-in-law or daughter-in-law whom you can’t stand. Maybe you have a son-in-law or daughter-in-law whom you adore. In any case, your estate plan should be reflective of your personal situation. It is not simple, it is yours, and you should control it.
Let us also demystify the term “estate planning”. At its most fundamental level, an “estate plan” includes a Will, a Health Care Directive and Durable General Power of Attorney. A Will governs who gets your “stuff” when you die and appoints someone to be in charge of the administration of your estate. A Health Care Directive appoints someone to make medical and end-of-life decisions for you in the event that you are unable to make those decisions for yourself. Finally, with a Durable General Power of Attorney, you appoint someone to help you manage your financial affairs. Absent a Will, the State in which you reside will designate how your assets are to be distributed and who can serve as administrator of your estate at your death. That State imposed estate plan is not likely to be the “plan” that you would want. Absent Health Care and Durable General Powers of Attorney, in the event of your incapacity, guardianship proceedings may be necessary to have someone appointed to make decisions on your behalf; that someone may or may not be who you would want it to be. Take control of your affairs and make a plan.
Next, let me be crystal clear: tax planning does not happen on its own. You cannot rely on your loved ones to take steps to minimize death taxes after you are gone. Although as of January 1, 2018, the New Jersey Estate Tax was repealed, we know that taxes do no stay the same forever and that Governor Murphy’s administration may restore that Estate Tax eventually. Also, New Jersey still has an Inheritance Tax, which is imposed based upon the decedent’s relationship with the beneficiary. While you may not feel that you need to consider tax planning, please remember that estate tax laws are always subject to change. We continue to emphasize flexibility in estate planning in order to accommodate those future changes.