Estate & Trust Planning Quiz
A Three-Minute Self-Examination Concerning Your NJ Estate Planning
“Is it time for me to review my estate planning?” That is a question that many of our clients ponder from time to time. The goal of this advisory is to turn that broad question into a series of more specific questions that may help you identify more effectively some relevant issues that may need attention. Recognizing that good estate planning “merely” concerns all of your assets and all of the people you love most may provide the incentive for you to spend the next three minutes taking this self-examination. We hope it proves helpful to you.
1. Do my closest family members know that the executed originals of my Will and other important estate planning documents are kept in ? If in a safety deposit box at a bank, do they know which bank and what box number? Are they named as a person who can access the safety deposit box without a Court order? Do they know where I keep my safe deposit box key?
2. My current Will was done in (which year?) and I last reviewed it thoroughly in (which year?). Given life changes that have occurred since I signed my Will, including birth (or death) of my children or grandchildren, marriage, divorce, purchase of real estate/investment property, and changes in my asset values/net worth, would it be a good idea for me to have my overall plan and documents reviewed by a local NJ Estate, Trust and Elder Law Attorney and possibly updated?
3. If I have children under the age of 18, does my Will name a Guardian for them in the event my spouse and I die together? How about an alternate guardian in the event your first choice is unable or unwilling to serve?
4. Have I planned to reduce my estate’s exposure to the NJ Estate Tax, which taxes the value of estates in excess of $675,000, at rates as high as 37%!
5. Does my Will contain a credit shelter or “bypass” trust to my spouse, so as to minimize or altogether eliminate exposure to NJ Estate Tax, regadless of which spouse dies first?
6. Do I have children or grandchildren with special needs, such as mental health issues or handicaps? If so, have I set up a “Special Needs Trust” which will allow them to receive income without become disqualified from government programs such as Social Security and Medicaid ?
7. Do I remember whom I have left in charge of my estate? Do I still have the best possible lineup of original and successor Executors and Trustees to carry out my intentions?
8. Do I have any assets (such as a valuable second home, certain business assets, certain heirlooms, etc.) that need special attention not addressed in my existing documents?
9. I am aware that who will receive some of my most important assets at my death will be determined not by my Will but by beneficiary designation forms filed with third parties (such as IRA holders or life insurance companies), and I also realize that “contingent beneficiaries” willbe entitled to these assets if my “primary beneficiary” does not survive me. Should I review the beneficiary designation documents I have signed for my life insurance policies, IRAs, and 401(k) accounts to make sure I know who will be entitled to these assets (as primary beneficiary or as contingent beneficiaries) at my death? Do I understand who will pay the estate taxes on these assets? (Comment: This is another tricky issue that most people do not fully understand and that may call for explanation by counsel.)
10. Are there aspects of my planning that may lead to squabbles or chafings within the family that I ought to give special attention to? Examples: Potential problem areas between the children and a stepmother; leaving a valuable asset to the children jointly; the possibility that some, but not all, children may seek executor’s fees; etc.
11. Are there any asset disposition possibilities that would simply make me feel better about my Will?
- Should I give more assets to the children (and/or grandchildren) at my death without making them wait for my spouse to die?
- Should I provide any bequests to faithful employees or to someone dear who really needs help?
- Should I include more protection for parents or other special relatives?
- Should I give more to a charity in honor of or to promote (recognizing that the IRS will in effect “pay” almost half of the amount given to charity)?
12. My basic plan is that eventually my (or our) assets will pass to or for the benefit of the children. Have I provided the proper ages for my children to receive their inheritance outright, or would it be better to have a trust which distributes the principal at certain age “benchmarks,” such as 1/3 at age 21, 1/3 at age 25, and 1/3 at age 3o?
13. If I get very sick or am in a terrible accident (i.e, coma or “vegetable” state), and cannot manage my affairs, do I want to have both a Durable Powers of Attorney and an Advance Directive for Health Care in place that will allow the people I trust most to make decisions on my behalf.
14. Should I prepare a memo to my family discussing certain assets, advisors or business associates I trust (or do not fully trust); my feelings about certain sensitive issues; or other items that might prove helpful to family members (or others) if they have to deal with these matters in my absence?
We hope that these above questions will help you decide whether any aspects of your estate planning need current attention. If so, give us a call at 908-782-5313 or write to us via email by clicking here.