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Estate planning should be done when you’re healthy and able to make decisions on your own. LGBTQ laws in New Jersey and Pennsylvania have changed for the better in recent years, but all couples should have an estate plan in place to make the estate administration process easier.
When you have a professional draft your estate plan, you’re making your loved one’s life easier if you pass away.
If you have an estate plan, it allows your loved one to:
- Avoid probate
- Reduce estate taxes
- Potentially avoid lawsuits and inter-family quarrels
- Protect your beneficiaries
- Protect the assets that you leave behind
Understanding Estate Plans and Estate Administration
Estate planning often starts with a will, but a will shouldn’t be the only part of your estate plan. Your estate plan will take a lot into account:
- Size and assets of your estate
- Tax laws in NJ or PA
- How assets are transferred upon your demise
Your plan will account for your family ensuring that you:
- Have enough life insurance or assets to pay for your funeral expenses, college tuition, or other debts.
- Name guardians for your children to avoid lengthy court battles.
- Have documents in place to state your wishes for your estate and child’s care if you have a child.
The plan will also include a list of your assets, including but not limited to:
- Real estate and homes
- Personal possessions
- Life insurance policies
- Bank accounts
- Retirement plans
- Health savings accounts
Your attorney may also ask for financial account statements and appraisals for your property. If you keep these documents and statements updated, it will make the estate administration process easier.
Someone will have to administer your estate, and these documents can make the process move along faster and with fewer issues.
When Should LGBTQ Couples Create an Estate Plan?
It’s never too early to start the estate administration process. You should, as a couple, create an estate plan as soon as you tie the knot or realize that your partner is the one that you want to spend your life with.
Heterosexual couples have a much easier time if their partners die than an LGBTQ couple.
Same-sex marriage has been legal in New Jersey and Pennsylvania since 2013 and 2014 respectively. The tools that you have available to you are the same as opposite-sex marriages, but laws can vary state-to-state.
Creating an estate plan protects you and your loved ones upon your demise.
As a general rule of thumb, you should create or update your estate plan when:
- You have a spouse or life partner
- You have or adopt children
- You own real estate or major assets
- Your health is declining and you’re at risk of incapacitation
- You have a business that you would like to pass on
One of the biggest mistakes people make when it comes to estate administration is that they believe they’re too young to have an estate plan. If you have no assets or children, you might not need an estate plan. Once you start to accumulate assets, have children or get married, an estate plan can make the life of your partner easier when you’re gone.
How Your Plan Protects You and Your Loved Ones
Your estate plan protects you and your loved ones in several ways:
- Final arrangements can be in place, allowing you to have the final say in if you’re buried or cremated, your headstone, casket, ceremony, and everything else.
- Reduce estate taxes due to smart planning, which can be used to bypass some of the taxes an estate would normally pay.
- Power of attorney documents can be put in place to ensure that your partner can take charge of your finances in the event that an emergency stops you from being able to make decisions on your own. Incapacitation, for example, would be one of the reasons that your partner would take control of your finances or medical decisions if health care directives are in place.
If you don’t have an estate plan, a few things can happen, depending on your place of residency.
What Happens If You Don’t Have an Estate Plan in New Jersey or Pennsylvania?
New Jersey follows intestate law and so does Pennsylvania. If you die without a will or estate plan, your estate will go to your relatives – even some that you wouldn’t want to be included – under state law. The assets that have to go through intestate succession are assets that don’t have beneficiaries.
For example, the following will avoid succession laws in most cases:
- Retirement accounts
- Bank accounts payable on death
- Items in a living trust
- Insurance proceeds
Otherwise, your estate will go through succession where your children, parents, spouse, or other descendants may have to split your estate.
When you don’t have written plans in place, your estate will be administered in accordance with state laws. Your last wishes, if they’re not written down, will not be followed.
If you’re considering estate planning or want to learn more about estate plans, contact us today to learn how we can outline your wishes legally.