Estate planning will help you plan your life, especially when you are gone or incapacitated. It outlines how your property will be divided. An estate plan eliminates confusion among your family members. Use an estate plan to minimize court cases, reduces estate taxes, and eliminate probate. Work with an estate lawyer in Florida to create a good estate plan. The following below is an estate plan checklist you should know.
Assemble A Team
Work with an experienced team. Look for a qualified financial advisor and estate planning lawyer. These professionals will bring onboard unmatched skills that’ll help you create a customized estate plan.
They’ll provide invaluable financial and legal guidance. Collaborating with such a team will maximize your beneficiaries’ inheritance. Plus, it’ll significantly reduce the tax burden associated with estate planning.
With their help, you can rest assured that your assets will be distributed to those you choose without any confusion.
Spell out your wishes. Without an estate plan, the jury might make those decisions on your behalf. To avoid having your assets taken to probate, consider including the following in your estate planning strategy:
- Healthcare directive– This legal document provides comprehensive guidance to medical services. The directive usually contains two documents: an attorney’s healthcare power and a living will.
- Robust power of attorney– This gives an individual the power to make financial decisions on your behalf. In case of illness or death, this person or organization will handle your financial matters and ensure that your wealth is distributed to the right beneficiaries.
- Last will – This legal document clearly states your wishes regarding your assets and dependents. When creating your will, you can name your heirs and identify a potential executor.
The next thing you need to do is to appoint a guardian for your children and aging parents. It’s also important to name a guardian to take care of any family member with special needs.
But before naming a guardian, be sure to talk to them first. Ask them if they’re ready for the task. They don’t necessarily have to be the ones handling your child’s inheritance. It’s possible to appoint a third-party trustee to manage the property until your child is mature enough to handle their inheritance.
Remember, you don’t always have to name your spouse as a co-guardian. This can get tricky if you decide to get a divorce. Consult your estate lawyer for expert advice on how to prepare for this situation. It’s also essential to identify a backup guardian in case your first choice is unable to take care of them.
A trust is a legal tool that’s designed to hold funds for your beneficiaries. Once you create a trust, you’ll have4 to decide what to put into it. You’ll also have to identify who gets what, as well as, how it’s going to be distributed.
A well-structured trust will ensure that your estate plan is executed just the way you intended. Moreover, it’ll prevent your estate from entering probate. As such, it’s imperative to work with an experienced attorney who knows the ins and outs of estate planning.
There are several types of trusts available in estate planning. They include:
- Revocable living trusts– they’re designed to help you revise or terminate your trust when you’re still alive. After your death, the revocable trust will automatically become irrevocable.
- Irrevocable trusts– It’s not possible to update or terminate an irrevocable trust. Once it’s drafted, it’ll remain like that forever. Irrevocable trusts are completely inflexible. However, they do offer a heightened level of protection against creditors and lawsuits.
- Charitable trusts– They allow you to donate part of your assets to charitable institutions. Once assets are listed in a charitable trust, they’ll no longer be considered your property. You can comfortably pass them to your heirs without having to pay heavy taxes or being caught up in lawsuits.
Estate taxes are often imposed on assets such as stock, cash, as well as, real estate. After receiving their inheritance, your heirs will be required to pay estate taxes, and the payments are usually made within nine months of your passing.
There are several measures you can take to cushion yourself against estate taxes. For instance, you can decide to place your assets in an irrevocable trust. Alternatively, you may consider giving gifts to your loved ones. Talk to a tax professional to determine which tax planning strategies will work for you.
This refers to the legal process of verifying your estate plan through the courts. It’s tedious, complex, and time-consuming. Plus, it can turn out to be very costly. It’s also worth noting that probate cases are extremely public- you won’t enjoy any privacy at all. To make it worse, a judge can make decisions that are contrary to what you indicated in your plan.
Fortunately, you avoid this complex process by drafting an enforceable will and designating an estate executor. If possible, you should also try establishing a trustee to handle your assets in a trust. This can significantly minimize the risk of probate.
Address Digital Assets
Aside from physical assets, you should also account for your digital assets. You could be having treasured photos, as well as, other important files saved on social media platforms. If your accounts are protected with passwords, they might not be accessible to your beneficiaries.
To avoid losing important files and treasured memories, be sure to identify a “digital fiduciary” when creating your estate plan. This individual will have the authority to access your digital assets. After your death, they’ll work with your estate lawyer to shut down your social media presence.
Get Expert Help
Hire an experienced financial advisor. Work with them to prepare for your long-term care needs. Think about purchasing long-term care insurance. This type of insurance is uniquely designed to pay for care while also protecting your assets.
Discuss the available options and devise multiple plans, in case your health condition changes.
The Bottom Line
Do estate planning right away. Don’t do it alone. Get help from a lawyer. Make a will. Think about power of attorney. Organize guardianship. The above checklist will help you design an effective estate plan.