Hereafter is a list of general considerations most people should address as part of their estate planning, followed by itemizations for persons of particular circumstances. |
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The making of a last will and testament. |
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The selection of an executor to perform the estate administration. |
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Whether real estate owned in another state will complicate the probate and administration process. |
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Who shall make medical decisions, (including a decision to terminate treatment), in the event of a disability. |
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Who shall make business and financial decisions in the event of a disability, and whether the powers of the agent should be in any way limited. |
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Whether an attorney or other professional representing more than one family member in the estate planning process has a potential conflict of interest. |
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Whether a person should seek to avoid probate in New Jersey or any other state through the use of a revocable trust. |
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ESTATE AND INHERITANCE TAXES |
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An estimate of the federal estate taxes which will be due, and how this liability will be funded. |
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Whether the estate tax on life insurance proceeds could be avoided by the creation of a life insurance trust. |
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Whether the client anticipates a substantial inheritance in the future, which would increase the estate taxes on his or her own passing. |
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Whether gifts are advisable to avoid future estate or inheritance taxes. |
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Whether the recipient of gifts will have accrued capital gains tax liabilities on the sale of the assets. |
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The balancing of the goals of minimizing the overall estate tax liability with the need to provide security during retirement, including for a surviving spouse. |
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How assets should be allocated and held between spouses to make use of the unified credit amount of each spouse, and thus minimize estate taxes. |
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Whether assets should be reallocated among spouses if it is clear that one spouse will predecease the other. |
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Whether federal estate taxes may be minimized through the use of a Grantor Retained Annuity Trust (GRAT), a Qualified Personal Residence Trust (QPRT), or other devices. |
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LIFE INSURANCE |
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Who should be the owner, the beneficiary and the contingent beneficiary of each life insurance policy. |
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Whether the estate tax on life insurance proceeds could be avoided by the creation of a life insurance trust. |
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Whether the life insurance proceeds should be held in trust for children until they attain an age at which the parents believe they will have sufficient maturity. |
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RETIREMENT PLANS |
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Who should be the primary beneficiary and contingent beneficiary of each retirement plan. |
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Whether the payments out of the plan may be slowed, to delay the liability for income taxes and allow a longer time for the assets to grow tax-free. |
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FOR PARENTS |
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Who should be the guardian and contingent guardian for minor children. |
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If a disabled child is left surviving, should assets be held in a "special needs" trust, to prevent the assets from disqualifying the child for government benefits, or from being consumed so that the child will thereafter qualify for government benefits. |
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Should assets be held in trust for young beneficiaries until they reach an age at which they will be better able to manage the property, such as at age 25, 30 or even later. |
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Whether alimony or child support obligations from a previous marriage will cause additional burdens on the estate. |
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FOR BUSINESS OWNERS |
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Whether the payment of tax liabilities will require important business assets of the family to be liquidated.
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Whether family business holdings should be restructured to qualify for an estate tax exemption.
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Whether a spouse will have a legal right to take more of the estate than provided for under a last will and testament, and other provisions.
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SECOND MARRIAGES |
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Estate planning in the context of a second marriage poses specific problems. The goal is usually to achieve a fair treatment of both the surviving second spouse, and the children of the first marriage.
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Proper planning can allow for the support of the surviving second spouse, but without allowing the second spouse to leave the assets upon death to persons other than the children of the predeceased spouse.
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There are a variety to tools which can be used to achieve these goals, if they are addressed in time.
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