Estate planning can come with numerous hiccups. One New Jersey family learned this the hard way when two sisters' mother tasked a family friend with being the executor of her estate. The executor moved slowly in selling the house, so the sisters had to wait a long time before seeing any actual money from the mom's estate.
There are several ways to avoid complications like this. In fact, New Jersey residents can save themselves a lot of hassle by dispelling common myths that persist regarding estate plans.
Myth: A will handles the distribution of all assets
A will allows you to name an executor and determine how to divide your property upon your death. However, it is not the only legal document you need to create. While a will can handle most assets, it cannot account for retirement accounts and life insurance policies. You need to look at the beneficiary designations for these accounts after any major life event, such as divorce. That way, your ex-spouse does not receive any money you do not want him or her to have.
Myth: Estate planning solely focuses on the distribution of assets
When most people think of an estate plan, they think about giving assets to loved ones. While that is a major component, it can also encompass gifting strategies and charitable planning goals. For example, you can designate some of your wealth to go to a cause you care deeply about. It also requires you to think about incapacity planning in case you are unable to make decisions on your own.
Myth: You never have to revisit an estate plan
You should review your estate plan at least once a year. This is to ensure it still aligns with your values. As you get older, you may realize you want to change some considerations. Additionally, you may want to change your will based on new tax laws that go into effect.