Boomer Law – Estate Planning in NJ

You’re 55 to 70 and your kids are all over 21 and starting to find their way in the world. It’s been 20 years since you last made an estate plan, and that may have only been a Will. Sounds familiar? I see these situations all the time. There can be loads of issues for baby boomers  to think about as you bring your estate plan in sync with your real life circumstances:

(1) NJ imposes an estate tax on every dollar above $675,000 that passes at death to someone who isn’t a charity or your spouse. Consider including a disclaimer credit shelter trust that would enable some assets to be set aside for benefit of surviving spouse but bypass estate tax at their death.

(2)  If you have substantial wealth, you may want to leave it under your Will to a restricted trust where it will stay for a longer time, rather than leave it to your children outright. This needs to be written into the Will. You can also allocate their share of IRAs into that trust with special language that protects the tax-deferred status. Coordinate your beneficiary designations also.

(3) Choose new fiduciaries — Executor, Power of Attorney, Trustee for your kids.. Your spouse may no longer be capable; certain of your children may be good choices and others not so much. The friends or siblings you chose before may no longer be the best choice.

(4) Trusts for children with special needs. These need to be written differently than general discretionary trusts. See our previous blogs and website articles on this topic.

(5)  Our generation has a high rate of volunteerism. You have probably been involved with charitable organizations in the last few decades. Consider allocating a percentage of your IRA/401K or leaving a specific bequest in the Will for these specific groups (make sure you have the correct name and office location as well). Think of how much good you can do with charitable giving. If your estate has $500,000 or more in it, will the children really miss  the ten thousand you leave to charity? Probably not. You can even leave excess land to a land trust,

(6) Health Care Directives and Powers of Attorney can be specially tailored to reflect your wishes and lifestyle choices in the event you become mentally incapacitated.

(7)  Consolidate all your financial, insurance, medical  and legal information in one place and let your kids know where they can find it in an emergency. The strongbox is only good if your “trusted someone” knows where the key is. Get organized. Soon.

(8) Long Term Care Insurance. I know the costs are rising and the terms are shrinking — used to be you could buy a lifetime policy (I got mine when I was 49) and now you can’t, but you can still get a policy for 5 years or more. Make sure it includes coverage for in-home care and has an inflation factor. From what I’ve seen, my clients with LTC insurance have a much higher likelihood of remaining in their homes once they require the services of a nurses’ aide.

Careful planning can prevent a crisis. We all want to plan for a good middle age.

Call us for Boomer Law estate planning … 732-382-6070



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