We have all heard the horror stories of what can happen when someone dies without an estate plan. These stories include: inheritances tied up in probate court for years at considerable expense to the heirs; children raised by guardians their deceased parents would not have selected; ex-spouses inheriting sizeable sums while the current spouse receives far less; assets going to the State. While no one wants any of the scenarios above to occur to their loved ones, far too many still put off estate planning.
Estate planning is defined as the process of preparing and arranging for the disposal of one’s estate. Estate planning can include the writing of a will or creation of a living trust. Estate planning is not a topic most want to discuss, but making time to discuss your wishes and establish a comprehensive estate plan with a knowledgeable New Jersey estate planning attorney is one of the most important things you can do for your children or loved ones. To illustrate the importance of proper estate planning, we have compiled the following list of 5 perils of not having an estate plan:
- Not having an estate plan will cost your loved ones money and diminish their inheritance—the legal term for dying without a will is intestate. If you die intestate, your estate will suffer financial consequences. When one dies intestate in New Jersey, their estate must go through the often lengthy probate process. The New Jersey probate court first appoints an administrator. The administrator must pay all debts, taxes, and administration fees, and will only then distribute the estate according to the laws of intestacy. Probate in New Jersey is costly and time consuming. The bottom line is this—proper estate planning can save your loved ones a tremendous amount of money and time.
- The court will choose your children’s guardian—choosing a potential guardian for your children is a very difficult decision and a topic most parents strongly wish to avoid. However, if you do not breach this difficult topic now, the court will be forced to do so for you. While New Jersey judges will certainly make the decision with care, no one knows your children and your friends and relatives like you do. Do not leave one of the most important decisions of your life in the hands of a third party.
- The court will decide who receives what from your estate—when you die intestate, the court will distribute your estate according to the laws of intestacy. Intestacy laws are complex and provide a formula for distributing your estate to your surviving family and relatives. Accordingly, if you die without a will or living trust, the state will make the important choices of who receives what for you. Unfortunately, in this scenario, individuals that you cared about and would have wanted to receive a portion of your estate may be left out. Vice versa, relatives or even ex-spouses to whom you would not want to gift anything may receive a portion of your estate. In sum, it is best to set out your wishes now, while you can, instead of leaving the court to make these important decisions for you.
- No one will know what type of medical care you want—a good estate plan is not solely concerned with your death; it can also be instrumental in the event you become seriously ill or injured. A thorough estate plan will include medical directives in the event you become incapacitated and can no longer express yourself. If you do not have an estate plan that sets out these directives, family members or even friends will be forced to make such choices for you. This can create a very stressful situation for loved ones struggling to determine what you would have wanted, and it is a situation that could easily be avoided with advance planning.
- Not having an estate plan can hurt your family and cause much stress—you’ve spent your life caring for, providing for, and protecting your family. Not creating an estate plan can hurt this legacy. Your family will already be experiencing a devastating and stressful time. Without an estate plan, your family may end up fighting over your estate or grappling with how you would have wanted things divided. Some advance planning now can save your family from much turmoil later.