Family Estate Planning: Making sure your affairs are in order

The world was shocked and saddened by the sudden death of actress Natasha Richardson last week. A seemingly minor injury resulting in death reminds us how fragile life is. Unfortunately, it takes tragedies to raise awareness and motivate people to organize their own affairs. But what steps do we take to prepare for the worst-case-scenario? What do we need? A Will? A Trust? Answering those questions is local Estate Planning attorney (and my husband), Robert Morris from the Brennan Law Firm in Cranbury, NJ. Mr. Morris, who is also a new father, emphasizes the importance for newlyweds and new families to provide for loved ones now instead of waiting until it's too late.

Q: What should families have in place in order to plan for the worst case scenario?

There are lots of things they should consider, but at a minimum they should have a Will and Power of Attorney. The P-o-A appoints someone to manage your assets and finances in the event that you are disabled or incapacitated.

Q: Is there a recommended time when families should get a Will?

As soon as you are married, you should consider having a Power of Attorney and a Will. After the birth of adoption of a child, you should consider appointing a guardian in the Will, and possibly a Trust for your child/children.

Q: Should all families have a Trust?

Every situation is different so families should consult their own attorney. There are costs and administrative burdens that go along with Trusts. But, one big advantage to setting up a Trust is protecting children that cannot manage their finances due to age or otherwise. Other Trust benefits include protection from creditors in some instances, tax benefits depending on the Trust structure and increased control over assets by the parents who create the Trust.

Q: What happens when a spouse suddenly passes away before adjusting the Will to include children?

In New Jersey, there is a statute that provides for after-born children (meaning they were born after the Will which was never revised) in certain circumstances. The rules are complex and depend on the bequests made to other children, if any, and the family structure. Bottom line: the statutory scheme may not be how you would like to provide for your kids so this situation should be avoided by updating your Will with every child and/or change in family structure.

Q: When do you see people getting their Will done?

Believe it or not, a family vacation is one the main motivators for people to get their Wills done. You would think a vacation evokes thoughts of joy, but many people plan for the worst case scenario. We recommend getting the Wills done soon after marriage and/or the arrival of a new child.

Brennan Law Firm, 73 N Main St, Cranbury, NJ 08512, (609) 395-5533


Victor said...

This is all good information. Just last week (or so), the Wall Street Journal posted a piece about the use of trusts for children, as part of an excerpt of their upcoming book for Financial Planning for Parents.

I added my own comments as part of this blog post here.

It's not the best solution every time every family, but making sure that estate planning gets done for young families is crucially important.

Great interview!

Victor J. Medina
Medina, Martinez & Castroll, LLC

Brij said...

This is a wonderful opinion...

estate planning

Jeff said...

I will agree that there are multiple estate planning solutions Victor, but it is a Critical and far too often overlooked aspect of our lives.

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