EVERYDAY ESTATE PLANNING
Most people dread the thought of estate planning. It's not hard to understand why. Thinking about where your assets should go after you die is an uncomfortable reminder of the inevitability of death. Many put it off until it's too late and end up leaving their heirs and family members with a financial and administrative mess. Those who you want to inherit your assets, those people you love most, may not receive them or may receive less because of expenses like court costs and taxes. This is why estate planning is so important, no matter what the size of your estate.
There are a few essential documents in any estate plan. The most basic estate planning document is a Last Will and Testament. A Will is a legal document which allows you to direct exactly where your assets are to be distributed when you die. If you die without a Will, your property will be distributed by the state intestacy statute, which determines where the state thinks your money should go, without regard to your actual wishes or your family's needs. All of your property could go to a family member that you don't speak to or even know. Making a Will is especially important for people with young children, as a Will is also the best place to name a guardian for your children in case anything should happen to you.
The problem with a Will is that when you die your assets must go through probate before they are passed on to your named beneficiaries. Most people living in Florida want to avoid probate and the most common way to accomplish this is with a Revocable Trust, also referred to as a Living Trust. The Trust acts similarly to a Will. It allows you to direct or put conditions on who gets your assets and when they get them. The biggest advantage of a Trust is that it avoids probate. This means that you avoid expensive court proceedings, you preserve the privacy of your estate, and you minimize the emotional stress on your heirs. They key to a Revocable Trust is that it must be funded prior to your death. That means your assets must be re-titled into the name of the Trust. If they are not re-titled, then they must be probated. You can also make Amendments and changes to the Trust as necessary during your life. Additionally, a Trust can be used to help protect your assets from in-laws or from the creditors of your beneficiaries.
The Durable Power of Attorney is another extremely important estate planning tool. This legal document allows you to select someone to handle your finances in the event that you cannot. No one can predict the crises that can occur in life. If something happens that leaves you unable to handle the business side of your life, this document can allow someone you trust to step in. That person can pay your bills, keep up your investments, or make key financial decisions in your best interests. If you become incapacitated without naming a Durable Power of Attorney, then the court will have to step in and through an expensive and time consuming proceeding, name a guardian to act on your behalf. Florida has a new Durable Power of Attorney statute. If you already have this document, you should have it reviewed to make sure that it is up to date and in accordance with the new law.
A Health Care Surrogate is a legal document which allows someone to make medical and health related decisions on your behalf if you are not able to. It is sometimes known as a Medical Power of Attorney. It applies to all instances in which you are incapacitated.
The Declaration Under Florida Life Prolonging Procedure Act, commonly called the "Living Will," is a statement of your wishes for what kind of life-prolonging treatment you want, or don't want, in the event that you become terminally ill and unable to communicate. This is an essential part of any estate plan. Making a decision about this is very personal. It is best to have a document which communicates your wishes. Otherwise, the decision will be left to your close family members to make, which can be tremendously difficult and stressful for them.
Having these documents prepared is not the end of your estate planning. When you move to Florida from another state, there are still concerns. Laws that affect estate planning decisions are different from state to state. Your Will and supplementary estate planning documents from another state are still valid and recognized in Florida. However, there are differences in state laws that might make certain provisions invalid or prevent them from achieving the desired estate planning goal. When you move to Florida, you should consider updating your documents, or at the least having them reviewed by a local attorney in case any specific changes need to be made to accommodate Florida's laws. Furthermore, laws governing estate planning may change over time. Every few years you should consider updating or reviewing the documents you have done to make sure you are still current.
Having a solid estate plan can set your mind at ease. It is not only for your benefit, but for the benefit of your loved ones.
Article Prepared by: Robert D. Schwartz, Attorney at Law