The following article reveals five (5) reasons why you need a Will: (1) selecting a guardian, (2) protecting family assets, (3) saving on Estate Tax, (4) making funeral plans and (5) disinheritance.
- You have a minor child
The ability to name a guardian for your minor child in your Will is a powerful estate planning tool in the event that your child is ever left without parents. Making this decision testate (within the Will) locks in your selection of the individual(s) you wish to fill that role, otherwise the decision may be out of your control which oftentimes involves court intervention and high legal costs. When selecting a guardian, consider carefully the opinions of your spouse (or if unmarried, your co-parent). Also consider who will best honor your overall parenting style and financial resources. You may choose co-guardians and input from the potential guardian should also be contemplated. Along with selecting a guardian, having a Trust within your Will for your minor child is also strongly recommended because it safeguards any inheritance for specific purposes outlined by you beforehand. For example, a Trust can be used to pay for higher education, healthcare and other necessary expenses at the discretion of a Trustee who is also appointed by you (note that the guardian and Trustee may be the same individual(s)).
- You are married without a child
Avoid the unfathomable scenario of sharing a percentage of your spouse’s inheritance with your in-laws. That’s because New Jersey law instructs that when a married individual dies intestate (without a will) and without a child, the inheritance may be split among you and your then living in-laws. (NJSA3B:5-3)
- You want to save Estate Taxes for your heirs
Married couples with a child and significant assets (house, bank accounts, retirement, life insurance, etc.) may be able to save a significant amount of Estate Tax liability for their heirs with the use of Trusts within their Wills. This is because when passing wealth to the next generation, inheritance held in Trust may bypass certain Estate Tax liability. For example, on a $1 Million estate that may mean an Estate Tax savings of approximately $30,000.
- Funeral Plans
In New Jersey, a named Executor in a Will has the authority (during the 10-day Probate waiting period) to make funeral arrangements so long as the Will contains the correct funeral disposition language, otherwise the planning and burial may be on hold for at least 10 days after death.
Dying without a will in New Jersey may cause your estate to go to someone who you’d rather leave out. This is because the law instructs that when an individual dies without a Will, the beneficiaries are pre-designated by law. As a general rule, leaving a spouse less than 1/3 requires consent (the elective share), however, cutting children and other family members out requires no such consent and can be accomplished with the correct Will language.This article is not intended as legal advice. Be sure to consult with an attorney when contemplating any of the above-described matters.
About the author. Daniel Del Collo, III is an Estate Planning and Elder Law attorney with an office located in Mount Laurel, New Jersey. He is also a member of the National Academy of Elder Law Attorneys. To discuss this article or any others, you can contact Dan at (856) 533-2405.