New Jersey Estate Planning and Probate Law Blog

There are people who spend a lot of time on the estate planning process, as well as those who put it off for as long as they can. Regardless of your current situation, it's critical that you take steps to prevent estate planning mistakes.

One mistake can cost you and/or your loved ones both time and money, so it's critical to take action to protect against trouble. Here are some of the most common mistakes:

• Neglecting to create an estate plan: The most common mistake is one of the easiest to remedy. If you don't have an estate plan, make it your goal to create one as quickly as possible. That'll solve your problem.
• Forgetting to update your estate plan: Just the same as neglecting to create an estate plan, this is easy to remedy if you take the time to do so. Remember, just because you've created an estate plan doesn't mean it's good enough to last forever.
• Choosing the wrong executor and/or guardian: In your estate plan, you'll name an executor. This person is responsible for managing your estate upon your death. Just the same, you'll want to name a guardian for any minor children, as this person will raise them should you and your spouse pass on before they reach the age of 18.

Fraud is a legal concept that is often tied to the criminal justice system. When a person commits fraud, they have or have sought to have themselves enriched through deceitful actions or omissions. Claims of fraud often arise in business settings, but New Jersey residents may be interested to know that fraud may also arise in the administration of estates.

It is often when a person is creating their will that they may become the victim of fraud. For example, they may be given wrong information that is intended to deceive them into benefiting one party more in their will than others. If the person creates or rewrites their will to unduly benefit someone who has committed fraud, then the responsible party may be subject to legal action.

Estate planning should be based on the individual needs and desires of plan creators. While many of the estate planning tools that are included in individuals' end of life plans focus on how their property will be dealt with after their deaths, some serve the important role of providing guidance on estate matters when the planners are still alive. Although it may not seem like living individuals should need documentation to support their wishes regarding their lives, incapacitation and illness can rob them of their abilities to communicate their plans and wishes. In the event of incapacitation and illness, individuals can put into place powers of attorney to help them.

Powers of attorney can cover financial and healthcare topics. A financial power of attorney can discuss how a person wants their money invested and saved, what accounts exist and what expenses should be paid, and who has the right to direct the use of their funds during their incapacitation. Similarly, a healthcare power of attorney provides instruction on how a person's medical care should be handled if they are not able to make decisions on their own.

During the holidays, over loved ones' birthdays and for other special occasions, New Jersey residents may relish in offering to their friends and relatives tokens of their love and appreciation. These gifts may range from modest items of personal meaning to lavish assets with financial growth opportunities. Many gifts may be given without thought to the federal gift tax, but as gifts grow in value they may become relevant to this important financial consideration.

The gift tax is applied to gifts of value that exceed a federally established threshold. Over time the gift limit to avoid the gift tax has gone up, and for 2019 gifts to any one person that exceed $15,000 may be taxed. That is to say, a person may give up to $15,000 worth of gifts to someone they love before they will be subject to the gift tax.