Strategies to Protect a Child’s Inheritance From a Stepparent
The divorce rate for those over the age of 50 has increased significantly since 1990. Therefore, it’s possible that you’ll eventually be in a relationship with someone other than your child’s biological parent. If you predecease this individual, it’s possible that he or she will choose to take ownership of your assets or transfer them to parties other than your son or daughter.
Why Should You Consider Creating a Revocable Living Trust?
Putting assets into a trust places them outside of your estate. This means that your spouse won’t be able to claim them as their own at the time of your death. Instead, the trust will be managed by a close friend, family member, or any other party that is willing to abide by the document’s terms. It may be especially important to use a trust if your children have not yet reached the age of majority as minors cannot legally manage property on their own.
It’s important to note that a trust is only valid if it is funded prior to your passing. It may be possible to use a pour-over will to ensure that this happens in a timely manner. In some cases, it may be invalidated if there is reason to believe that it wasn’t created in accordance with New Jersey law. An estate planning litigation lawyer may be able to represent your beneficiaries in court if a stepparent challenges a trust.
The Potential Benefits of Gifting Assets While You’re Still Alive
If your children are old enough to manage property on their own, it may be a good idea to make gifts to them during your lifetime. Federal law allows you to make gifts of up to $15,000 per year to as many people as you’d like without the need to report the transaction to the IRS. Taking advantage of this rule can help to ensure that your kids already own the items that you were planning to transfer to them after you passed on.
Assuming that you were of sound mind when making a gift, there is little that a spouse can do to reclaim a home, brokerage account, or another item that was awarded to your adult offspring. In addition to meeting your estate planning goals, gifting assets can also help to reduce the taxable value of your estate. This means that your surviving family members will inherit a greater share of whatever is left after outstanding debts are paid off.
How a Beneficiary Designation May Help You Accomplish Your Plan’s Goals
Attaching a beneficiary designation to an asset allows it to pass to a new owner without the need for probate. In some cases, it will pass automatically to the person named on the beneficiary form. However, whoever inherits a bank, brokerage, or another type of financial account will likely need to provide a copy of your death certificate before taking control of it.
It’s important to note that the terms of this document trump language included in a will. An estate planning litigation lawyer may be able to review these documents to ensure that they don’t provide conflicting information. This person may also be able to assist your estate representative in court if a family member pursues a challenge to your will or other parts of your plan.
If you have questions about how to accomplish your estate planning goals, it may be in your best interest to speak with someone from the Knee Law Firm today. We may be able to review existing estate plan documents to ensure that they are structured in accordance with New Jersey law. We may also be able to create new plan documents to increase the odds that your final wishes will be respected after you pass. Our Hackensack office can be reached by calling 201-996-1200 or directly through the firm’s website, so get in touch with us today.