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The importance of inheritance estate plans -- Part 1

An estate plan is a vital part of the future for people in New Jersey. It is often overlooked, but especially for those who do not have significant means. They might be under the impression that since there is not substantial assets to divide, wills are unnecessary. However, that is a mistake.

There are a multitude of errors that people will make when it comes to estate planning. Knowing them is a sound way to avoid making them.

Dying without a will -- dying intestate -- will result in the state determining where the assets go. A specific problem that happens without a will is if there is a minor child left behind. A judge will decide with whom the child will live.

But, having a will is just one-step. Making certain it is regularly updated is another. Circumstances will change, relationships end and assets are gained and lost. Many different things happen in one's life, making it smart to update a will.

Updating beneficiaries is also important. There is a belief that naming who gets what in a will is sufficient, but that is not the case with retirement accounts and insurance policies. The person who is listed as the beneficiary on the account will get it after the testator dies, and it has nothing to do with what the will says. Heirs might be left to divide the assets after the person has died, but this can lead to disputes. As a result, having a comprehensive list as to what goes where is essential.

A failure to name a competent executor is a mistake that many will make as being an executor is not easy. Accounts must be liquidated, assets must be dispatched to the right beneficiaries, debts must be paid and selling property could be necessary.

Having the wrong person as executor can cause major problems. These are some of the issues that must be considered with an estate plan. An upcoming post will discuss the others.

With wills, trusts, estates and everything that goes along with crafting estate planning documents, it is vital to have legal advice from start to finish. Legal experts can help.

Source: cnbc.com, "Warren Buffett has an estate plan. You should, too," Sarah O'Brien, July 18, 2017

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