As we step into the new year, it's an ideal time to reflect on our personal and financial affairs. One crucial aspect often overlooked is estate planning. Beyond the common goal of minimizing estate taxes, a comprehensive estate plan offers numerous benefits that ensure your wishes are honored and your loved ones are protected. Here are ten compelling reasons to make estate planning your New Year's resolution.
1. Maintaining Privacy and Avoiding Probate
Without an estate plan, your assets may go through probate—a public, time-consuming, and costly legal process. Proper planning can help you avoid probate, keeping your affairs private and expediting the distribution of your assets.
2. Protecting Minor Children
If you have minor children, an estate plan allows you to designate guardians who will care for them in your absence. This ensures that your children are raised by individuals you trust, rather than leaving the decision to the courts.
3. Providing for Your Spouse and Other Beneficiaries
An estate plan ensures that your assets are distributed according to your wishes, providing for your spouse, children, and other loved ones as you see fit. Without it, state laws will determine the distribution, which may not align with your intentions.
4. Planning for Blended Families
For those with blended families (after divorce, for instance), estate planning is essential to address the unique dynamics and ensure that all family members are considered and provided for according to your wishes.
5. Protecting Assets from Creditors
A well-structured estate plan can safeguard your assets from potential creditors, ensuring that your beneficiaries receive their full inheritance without unexpected claims.
6. Planning for Incapacity
Estate planning isn't just about distributing assets after death; it also involves preparing for potential incapacity. By establishing powers of attorney and healthcare directives, you can designate trusted individuals to make decisions on your behalf if you're unable to do so.
7. Supporting Charitable Causes
If philanthropy is important to you, an estate plan allows you to allocate part of your estate to charitable organizations, leaving a lasting legacy that reflects your values.
8. Minimizing Family Disputes
Clearly outlining your wishes in an estate plan can reduce the likelihood of disputes among family members, providing clarity and preventing misunderstandings during emotionally challenging times.
9. Reducing Estate Taxes
While not the sole purpose, a strategic estate plan can help minimize estate taxes, preserving more of your wealth for your beneficiaries. The IRS's estate tax exemption is currently $13.99 million for 2025. In New York, an estate tax return is required if the deceased's gross estate exceeds $7.16 million in 2025, with this exemption amount subject to annual adjustment for inflation. Meanwhile, New Jersey has not imposed an estate tax since 2018, but it does levy an inheritance tax on certain beneficiaries, depending on their relationship to the deceased. These state-specific rules underscore the importance of tailoring your estate plan to your jurisdiction.
10. Peace of Mind
Ultimately, having an estate plan in place provides peace of mind, knowing that you've taken the necessary steps to protect your loved ones and ensure your wishes are honored.
Our law firm’s goal is to educate and guide our clients through these considerations, so you will be able to achieve the precise goals you want for you and your family. We encourage you to click here to schedule an initial complimentary 15-minute call to learn more and start our planning process today.