Estate planning is the process of arranging who will receive your assets when you pass away. The main goal of estate planning is to make sure your wealth and other assets go to your beneficiaries.
Typically an estate plan is created with the help of a lawyer. In the event of your incapacitation or death, estate planning also helps you to ensure your family is protected and obtains access to your assets. Some estate plans work to minimize taxes so that your beneficiaries can keep more of your wealth.
There are various forms of estate plans. Typically the value of the estate will determine whether you should put into place a will, revocable trust, or asset protection trust. Overall, a good estate plan can help to reduce the stress placed on your family after your death.
Why Would You Need an Estate Plan in Florida?
There are a variety of reasons why you may need an estate plan. Whether you have children or want to prepare for the future, it can be an incredible asset.
Arrival of Children
If you are expecting, or have young children, choosing a guardian is essential. Although you never want to think about your untimely death, you do want to ensure that your children are cared for, should something happen to both you and the other parent involved.
Similar to how you can avoid probate with estate planning, you will also be afforded privacy protection. This is because probate proceedings are public. Everything you own, who receives it, and what is the estate overall, will be made public if you do not avoid probate.
Probate is the process that occurs after your death. It involves ensuring your estate gets into the right hands and can cost several percent of an estate’s value to administer. By avoiding probate you can provide significant savings in terms of cost and time, to your beneficiaries.
If you plan to donate to specific organizations after your death, then you can fulfill these philanthropic goals with an estate plan.
How Florida Estate Planning Works
- Write a will: In this step, you will decide who you wish to inherit your estate. You will also need to name a guardian for any young children.
- Create a trust: Although it is not required, if you place your assets into a living trust you can help your heirs to avoid the probate process.
- Make health care decisions: In case you become unable to make conscious medical decisions, you should set up medical directives.
- Name a power of attorney: The power of attorney is a trusted person with authority to handle your finances. If you become incapacitated, then this is the person you name to handle your estate.
- Name an adult to protect your children's property: If you have minor children then there must be an adult to manage any of the money they are set to inherit.
- File beneficiary forms: By naming a beneficiary for bank accounts and retirement plans, you can ensure that these accounts are payable upon your death. Once again, this will skip the probate process.
- Add life insurance: If you own property, owe debts, or have children then you may consider life insurance. This will take care of your family when you are gone.
- Understand estate taxes: Most estates will not owe federal estate taxes, because these are only due if your taxable estate is worth more than $5.49 million.
- Consider funeral expenses: This can help your family go through the funeral process more easily.
- Make end of life arrangements: This might include organ and body donation, or burial versus cremation choices.
- Create a succession plan: If you are the only owner of your business then you will need to have a buyout agreement or a succession plan as a sole proprietor.
Store your documents properly: Ensure you have the
following items prepared and available for after your death:
- Insurance policies
- Real estate ownership information
- Stocks, bonds, annuities
- Bank accounts, mutual funds, and safe deposit boxes
- Retirement plans, 401(k) accounts, or IRAs
- Information on any debts: credit cards, mortgages and loans, utilities, and unpaid taxes
Advantages of an Estate Plan in Florida
Having a good estate plan means your beneficiaries will be protected. Not only can you ensure that your minor children go into the care of those of your choosing, but you can ensure they are given the money they deserve.
States How Assets Are Distributed Clearly
Setting up a trust through an estate plan ensures that the different family members receive the money you have decided for each of them. There will be no questioning who deserves which money or which assets.
Reduces Tax Burden on Beneficiaries
When you pass away, some of your estates will be due in taxes. By using retirement accounts you can give more tax-free money to your heirs. This is why it is essential to have a plan in place.
Prevents Family Fighting
Death can bring out the worst in people. Unfortunately, even if your family typically gets along, money can cause huge controversy. Estate planning helps to prevent your family from fighting over your estate.
The probate process is incredibly long, and also can be costly. You can prevent your family from going through this process by setting up a clear estate plan and trust.
How Much Does an Estate Plan Cost in Florida?
On average, you will need to spend anywhere from $250-$350 per hour to have an attorney prepare an estate plan in Florida. Experienced attorneys may charge $250 or $350 per hour to prepare more sophisticated estate plans. This can increase up to a few thousand dollars should it be more complicated.
Do You Need an Estate Plan in Florida?
Estate planning is essential if you own any assets that you wish to be transferred to someone after you have died. You can choose to consider a formal estate plan to make matters easiest, but a will is also an option. It is important to understand that a will won't help your family avoid the probate process. This means that they will end up spending unnecessary costs if your estate is rather large. If you have a small estate with a few simple assets, then you may consider saving the money involved in the cost of estate planning, and simply make a will.