Wills
Trusts
Powers of Attorney
Asset Protection

Wills

Your Will says who should get what of your personal belongings and financial assets – your “estate.”

If you are relatively young and have relatively few assets, then a Will may be enough to direct how you want your estate distributed. With specific provisions in a Will you can make sure your child (or children) does not get a large sum on his 18th birthday.

A Will that has been submitted to Court once a person has passed away is a public record. If you highly value your privacy, you may prefer a trust. [hyperlink “trust” to the Trust section]

Guardians for minor children are also named in a Will. And we go a step beyond that to make sure your minor children have a plan of care if their parents are incapacitated or temporarily unavailable.

There has been a significant change in the law concerning estate taxes in NJ: as of the beginning of 2018, there is no estate tax in NJ. In 2017, NJ taxed estates over $2 million. Not so long ago, NJ taxed estates over $675,000.

If your estate planning with a spouse is more than three or four years old, your plan may contain provisions creating trusts that were intended to save estate taxes when the threshold was $675,000. Depending on the trust provisions, they might be more cumbersome than necessary for the surviving spouse and might even be detrimental (costly). It might be time to review your plan with your attorney to check that the wording works with the new state of the law. One further point is that a Will is public information.

Trusts

Trusts are private agreements between the person who makes it (the grantor) and the person who will act (trustee) on behalf of the person(s) who will benefit (beneficiaries). The terms of a trust are not a matter of public record. This is different than a will, which is public. If you want to be specific about what sort of care, what schools, at what ages do children receive what amounts, you may want to keep that private.

A trust also provides for disability and death of the original Trustee (often the grantor) with a list of Successor Trustees. The Successor Trustee can step in and start acting for the benefit of the beneficiaries with a small amount of administration. This is different than going through probate. While NJ is not a difficult state in which to go through probate, there are still timeframes within which you must work (e.g., waiting a certain number of days before starting the probate, waiting a certain number of days for the death certificate, waiting a period of time for creditors’ claims to come in).

If you want part of your Legacy to be that you made things easy for your family – so much so that they feel your love, they feel cared for by the care you put into your plan, then you may want to consider trust planning.

Powers of Attorney

A Power of Attorney gives the person you designate the power to act on your behalf in financial transactions. A power of attorney may also give the Agent the power to handle your mail, resign from positions or roles, manage a business you own, etc.

If you are incapacitated, your Agent will need to contact each financial institution or other entity or person and show them the Power of Attorney.

Sometimes, especially with short, DIY, or older (more than five years) Powers of Attorney, the financial institution will not accept the Power of Attorney.

So that you are prepared for an emergency when you need a Power of Attorney, it is important to have a comprehensive and current one.

Asset Protection

Nobody expects to be sued. Just ask the 20 million people involved in lawsuits last year.

Divorce, inheritance, health issues, creditors, employees, theft, changing markets, malpractice suits, sexual harassment claims, natural disasters and disgruntled business partners are just a few issues that can result in devastating lawsuits for unprepared business owners. The highest level of risk falls on those who think they are immune.

Americans are now more concerned than ever about protecting their assets from creditor claims, taxes, divorce and other disasters. Rightly so.

The more success you have (especially in business, professional practice or real estate activities), the more at risk you are as others see your success grow.

Here’s some of the “risky behavior” you may be engaging in right now:

Will you be signing loan documents, a personal guaranty or a lease? Do you have rental properties or employees? Are you an attorney or physician? Do you work in construction or perform professional services? Are you getting married and have children from a prior marriage or separate property assets you are bringing into the marriage.

Here’s the thing: all of these activities are activities we want to see you do more of! They are, in many ways, the spice of life.  But we don’t want that spice to become too hot and impact your life negatively.

That’s where we come in. We can set up your life structures to ensure that you can take maximum risk with minimum worry.

We assist our clients in determining the appropriate level of asset protection planning for their particular circumstances. We will consider insurance, prenuptial agreements, asset segregation, choice of jurisdiction, gifting, LLCs, partnerships, corporations, and asset protection trusts. Customized combinations are layered depending on the needs of the client and as appropriate.

There are many different strategies to accomplish the protection of your assets while you are alive and after you are gone. To find out which strategies may be right for you, contact us for a Family Wealth Planning Session.

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