Estate Planning

Some people think the term "estate planning" is synonymous with a Last Will and Testament. In fact, a Will is simply one tool to be used in a comprehensive estate plan.

The most effective estate plan coordinates the use of various instruments, such as a Will, a Trust, a Power of Attorney, and a Living Will, coordinated with life insurance, beneficiary designations, prenuptial agreements, and the proper titling of assets. By working with your estate-planning attorney you can develop an estate plan appropriate for your unique set of circumstances to accomplish your ultimate goals.

For example, if most of your assets are contained in a retirement account, such as an IRA or a 401(k), you will want to make sure that the beneficiary designations on your account are coordinated with your Will because a beneficiary designated to receive IRA money upon your death will receive that money even if your Will provides differently. Another example concerns powers of attorney. How much authority do you want to give to your agent? Would you like your agent to have the power to make gifts of your assets? Is there anything you do not want your agent to be able to do for you? Do you want your agent's powers to take effect immediately or only if you cannot act on your own behalf?

A husband and wife might consider using a credit shelter trust in their Wills to reduce estate taxes after their deaths if their combined net worth exceeds $2,000,000.00

Until the end of 2016, New Jersey estate tax affected estates valued at more than $675,000. Recent New Jersey legislation raised that threshold to $2,000,000 for 2017 and repeals New Jersey estate tax for persons dying on or after January 1, 2018.

If your estate is more modest, you may wish to make sure that life insurance proceeds are available to your executor to pay expenses, including your funeral and the disposition of your remains, by making a proper beneficiary designation.

If you are a widow or widower contemplating remarriage, you should consider entering into a prenuptial agreement with your intended to make sure assets are available to provide for your children should you die before your new spouse.

Finally, if most of your assets comprise real estate, you may wish to consider a life insurance trust or another mechanism to provide your executor access to liquid funds to pay expenses if you would prefer that the real estate not be sold, or at least that your executor not be forced to sell real estate at a less-than-optimal price just to have money to pay expenses.

Not everyone's circumstances are identical and, therefore, a custom-made estate plan suited to your specific situation is vital.

Call Katkocin Law Office at the Medford, New Jersey, office at 856-283-0800 to discuss your estate plan today, or contact the office online.