Estate planning in Florida basically has to do with planning for the management of your assets during your lifetime, and their consequent distribution when you die.
Estate planning is important for every individual, whether young or old. It is not all about distributing assets to loved ones after your death (although this is critical to every estate plan); proper estate planning must also address certain occurrence which may affect your personal and fiscal affairs during your lifetime. Should you become incapacitated due to accident, mental illness or age, you would need someone to manage your fiscal affairs and help make important decisions of your behalf.
Estate planning documents
The following are important documents which should be included in an effective estate plan:
A will, formally called a Last Will and Testament, is a legal document by which you address the disposal of your possessions when you die. With a will, you choose your inheritors and give instructions on how and what they should receive. You can name anyone as your beneficiary, including friends, charity, etc. Without a will, your wishes are not known, and the estate laws of Florida will pass your assets to your default heirs (surviving spouse and direct descendants). Every valid will in Florida must be written and signed by a person of testamentary capacity and witnessed by at least two persons. A will must be validated in court during probate before its instructions can be carried out.
Powers of attorney
As a person gets older, there is always fear of incapacity. Powers of attorney are used to plan for such unpleasant situations.
- Financial power of attorney: no matter how small or large your estate or business may be, you may need someone to help you handle your bills, bank accounts, business, and other financial matters should you become incapacitated. A document known as a financial power of attorney allows you appoint a financial representative.
- Healthcare power of attorney (healthcare proxy): This document allows you appoint someone to make healthcare decisions on your behalf should you become incapacitated.
A trust works the same way. But as opposed to a will, a trust allows you transfer assets outside probate, and even before death. Assets funded in a trust take assume the name of the trust; thus, trusts offer tax advantages by limiting the assets held in your name. Also, a trust cannot be contested or litigated.
A living will allows you to write down your wishes concerning the kind of healthcare you desire during end-of-life situations.
Assets funded into an irrevocable trust permanently escape your reach, and will pass down to your beneficiaries tax-free and without the necessity of probate. Since you would be unable to use these assets, the idea is to go around this by simply creating a Pour-over will and instruct that those assets be poured over into the trust as soon as you pass away. That way, you can use the assets up till your death, after which they are funded into the trust.
Things to consider when estate planning in Florida
There are some important things to consider when creating an estate plan in Florida.
Intestacy: Intestacy occurs when you die without a will, or your will violates the requirements for a valid will in Florida. In that case, your possessions will go to those who you may not have desired as your beneficiaries. To avoid this, get help from a Florida estate planning attorney.
Federal estate tax: If you die in 2020 leaving an estate worth over $11.58 million, that estate will be charged a federal estate tax reaching up to 40% before it can be inherited. It becomes imperative that you include tax planning in your estate plan.
Probate: Every estate below $75,000 in Florida will go through a simplified probate, while those beyond that value go through a complex and lengthy probate, even reaching years before beneficiaries can inherit. An attorney can help you find ways to plan so that probate is simplified or avoided (through the use of living trust, gifting, joint ownership, etc.).
Get help from a Florida estate planning attorney
A Florida estate planning attorney is a legal professional well-versed in the estate laws of Florida and knows what instruments to employ that serve your best interests. Let them take the legal stress off your shoulders while you focus on where your strength lies. Contact an estate planning attorney today.