Estate Planning on a Budget in New Jersey
October 21, 2024
Reviewed by: Yasmine Boto
This article is made possible by the generous support from Taylor Tobey at 9Sail.
Yasmine Boto
Estate Planning on a Budget in New Jersey
Estate planning is often seen as something only necessary for the wealthy, but the reality is, everyone can benefit from having a plan in place. Whether you're young and just starting out or approaching retirement, having an estate plan ensures your wishes are followed and your loved ones are protected. In New Jersey, estate planning doesn’t have to be expensive, and with the right guidance, you can create a comprehensive plan on a budget. This article will walk you through the importance of estate planning, when to begin, what is involved, and how to save money along the way, as well as how Volunteer Lawyers for Justice (VLJ) helps veterans who have no- and low-incomes in New Jersey with wills, powers of attorney (POA), and healthcare directives.
The Importance of Estate Planning
Estate planning is essential because it provides peace of mind knowing your wishes regarding medical care, finances, and the distribution of your assets will be followed if you're unable to make decisions for yourself. Without a plan, your estate could end up in probate court, which can be time-consuming and costly for your loved ones. Probate court is responsible for overseeing the distribution of assets when there’s no will or if the will is contested, leading to potential delays and additional legal fees. An effective estate plan prevents this by clearly outlining your decisions on your behalf and ensuring your minor children, if any, are taken care of.
Beyond simply avoiding probate, estate planning allows you to designate individuals to make important decisions if you’re incapacitated, such as appointing a medical or financial POA. By creating a plan, you also help your family avoid unnecessary stress and disputes, ensuring that your wishes, such as how your assets are distributed or your preferences for medical treatment, are honored.
When Should You Create an Estate Plan?
It’s never too early to begin thinking about estate planning. While most people associate it with aging, the truth is that life can be unpredictable. Creating a plan early allows you to prepare for any potential circumstances that might arise. Even if you're in your twenties, having a basic will, medical directive, and a financial power of attorney in place will ensure your assets and healthcare decisions are managed according to your preferences.
Major life events such as marriage, having children, purchasing a home, or starting a business are key moments to either create or update your estate plan. Anytime your life situation changes, it’s a good idea to review your plan to make sure it reflects your current circumstances and intentions.
What to Include in Your Estate Plan
A comprehensive estate plan typically includes several essential documents, each serving a different purpose. At the very least, it should include a last will and testament, which specifies how your assets are distributed after your death. This document also allows you to designate a guardian for minor children and outline any specific wishes you have regarding the distribution of personal belongings, property, and investments.
Another critical component is a living will or advance healthcare directive. This document outlines your medical treatment preferences in case you’re unable to communicate them. It can detail what types of life-sustaining measures, such as resuscitation or feeding tubes, you would like to receive or refuse. Alongside this, appointing a medical POA is essential, as it designates a trusted person to make healthcare decisions on your behalf.
A financial POA is also an important part of your estate plan. This individual will have the authority to manage your finances if you become incapacitated, ensuring bills are paid, assets are protected, and investments are managed properly. In addition, some estate plans include provisions for trusts, especially if you have substantial assets or want to ensure your minor children’s financial future is secured.
Other considerations might include life insurance policies, which can provide financial support to your loved ones, or setting up a trust to avoid probate altogether. With these documents in place, your estate planning process will ensure your family isn’t burdened with difficult decisions or probate court fees, allowing them to focus on grieving and healing.
An important reminder about creating and selecting a POA, make sure you trust them. They will have legal authority to make decisions for you if the time comes, be it determining how you will be cared for medically, how your finances are handled, etc. There are too many horror stories about POAs making poor decisions, committing fraud, or otherwise harming the person they are supposed to make decisions for. Also, make sure you keep your completed estate planning documents in safe, secure place and let select trusted family and friends know where the documents are and how to access them if the need arises.
How to Estate Plan on a Budget
You might think that estate planning is expensive, but there are several ways to keep costs down while still creating an effective plan. Start by exploring online services that offer affordable estate planning options. Many of these services allow you to draft basic documents like a last will and testament, living will, or POA. While these online solutions are affordable, it's important to ensure they comply with New Jersey's legal requirements, so it may be a long-term investment to consult with an estate planning attorney to confirm your documents are valid. The last thing you want to happen is for your documents to be invalid or otherwise be legally deficient leading to delays and headaches for your beneficiaries.
If you prefer working with a lawyer but are concerned about the costs, look for law firms that offer flat fee services instead of charging an hourly rate. Flat fees can make it easier to budget for the entire estate planning process. Additionally, some attorneys offer payment plans, allowing you to spread the cost over several months. For veterans and individuals with no- and low-incomes, free or low-cost legal services may be available, helping reduce the financial burden.
Another way to save on estate planning costs is by starting with the most critical documents and adding others later. For instance, you can begin with a basic will and POA, then add more complex documents like trusts or advance healthcare directives when you have the resources.
Estate Planning Considerations for Veterans in New Jersey
Estate planning for veterans involves several unique considerations that reflect both their service and the specific benefits available to them:
Maximizing Veterans Benefits
Veterans may be eligible for a range of benefits that can significantly impact their estate planning decisions. These benefits include pensions, disability compensation, and healthcare coverage through the U.S. Department of Veterans Affairs (VA). It’s important to ensure these benefits are considered when planning for long-term care, retirement, and the distribution of assets. Proper estate planning can help veterans with no- or low-incomes avoid disqualifying themselves from or reducing benefits like Medicaid or Social Security while ensuring they take full advantage of VA resources.
Survivor Benefits
Veterans should also account for the benefits that may be available to their surviving spouses and dependents. For instance, the VA offers Dependency and Indemnity Compensation (DIC) for surviving spouses and children of veterans who died from a service-related injury or illness.
Burial and Funeral Benefits
The VA offers burial benefits that can help cover funeral expenses. Veterans and their families may also be eligible for burial in a national cemetery, such as the Brigadier General William C. Doyle Memorial Cemetery in New Jersey. Veterans should include plans for these benefits in their estate documents, ensuring family members know how to claim these honors and benefits.
Asset Protection and Avoiding Probate
Like other New Jersey residents, veterans may want to explore ways to protect their assets and avoid the lengthy and costly probate process. This can be done by creating trusts, such as a revocable living trust, which allows veterans to transfer assets directly to beneficiaries outside of probate court. This is particularly important for veterans with substantial assets, and for those wishing to pass along specific items, such as military memorabilia, a will can make this possible.
Disability Considerations and Long-Term Care
Veterans with service-related disabilities should plan for the possibility of requiring long-term care or assisted living. Medicaid planning is critical in these cases, as Medicaid can help with long-term care costs for veterans experiencing poverty. Veterans can use estate planning to ensure they qualify for Medicaid while preserving assets for their families. Additionally, VA Aid and Attendance benefits can help cover long-term care costs.
Power of Attorney and Healthcare Directives
Veterans, especially those with complex health needs, should create a healthcare POA and an advance healthcare directive. These documents will ensure a trusted person can make medical decisions on their behalf if they become incapacitated. Veterans should also appoint a financial POA to handle their financial affairs, including managing VA benefits and handling payments for medical care or long-term care.
Updating Documents After Service
As military servicemembers transition to civilian life, they should review and update their estate planning documents to reflect any changes in their family situation, assets, or benefits. This includes updating beneficiaries on life insurance policies and pensions, as well as making sure any specific military benefits or assets are accounted for in their estate plan. A note on life insurance: generally, life insurance policies are not controlled by a will, so you will want to confirm your beneficiaries (primary and contingent) and the percentage they will receive.
By taking these considerations into account, veterans in New Jersey can ensure their estate plans honor their service, protect their families, and make the most of the benefits they've earned.
How VLJ Helps New Jersey Veterans with Estate Planning
At VLJ, we believe everyone deserves access to justice, and we help New Jersey veterans create wills, powers of attorney (POA), and healthcare directives that provide peace of mind for them and their families. If you or someone you know is a veteran in New Jersey and needs a simple will, POA, or healthcare directive, you can apply for VLJ’s services online at www.vljnj.org/get-help or call (973) 645-1955.
AI disclaimer: The above was created using ChatGPT and reviewed by Yasmine Boto.
