30 Aug 5 Estate Planning Tips Everyone Should Follow
By: Barry E. Haimo, Esq.
August 30, 2016
5 Estate Planning Tips Everyone Should Follow
Estate planning is a complicated process. Everyone has unique needs, so it is difficult to create a cookie cutter estate plan that works for every situation. You want something that has been tailored to you, your lifestyle, and your needs. That’s where an estate planning attorney becomes valuable. He or she can guide you on the best course of action to make sure that you have a plan, appointing the right parties to carry out your inheritance wishes and protect your assets.
That being said, there are a number of elements that should be present in everyone’s estate plan—whether you’re leaving behind a modest sum of money or a large family fortune. These are the basics; essentially where you should start. Where you go from there is up to you (after hopefully getting advice from your estate planning attorney).
Write a Will
Many people put off making a will, and that’s understandable because nobody wants to think about their own demise; or worse, the demise of their loved ones. The thought of dying makes most of us uncomfortable, so why would we want to actively sit down and think about it?
Failing to make a will, however, can have drastic unforeseen consequences for your estate and your family. If you die without a will, your estate will be divided and distributed by the Florida probate court pursuant to Florida’s laws of intestate succession. In other words, complete strangers will be in charge of doling out your property and deciding which of your family and friends gets what. If you have absolutely no family, or your family cannot be identified or located, your property will ultimately end up with state’s department of unclaimed funds. Ultimately, if uncollected for long enough, the state will inherit the assets. Nobody wants that.
Creating even a simple will can help to ensure that this doesn’t happen, but a will alone cannot completely protect your assets if creditors and others come after them. There are a few different types of wills. Talk to an estate planning attorney to learn what other options you have. Wills in conjunction with trusts can protect assets if set up properly.
Consider Purchasing Life Insurance
If you have dependents, you should consider purchasing a life insurance policy. If you pass away unexpectedly, this will provide income replacement for your family’s future expenses, including funeral, college, living and medical expenses. It will bring you peace of mind to known your family will not become destitute in the event of your death.
Depending on your age, and even if you have enough means to support your next of kin, life insurance can be a lucrative investment vehicle to help diversify your portfolio. It is also commonly used tosatisfy estate tax obligations.
Establish End-of-Life Documentation
Estate planning doesn’t just deal with matters after your death. It also addresses things that may happen in your lifetime, such as if you become unable to make financial, administrative and/or medical decisions for yourself.
For example, if you fell into a coma, you may want your spouse and/or another person to have the power make decisions about your medical care and finances. The following documents can ensure that a trusted person will take over important decisions when you cannot.
- A Durable Power of Attorney allows a specified person manage your financial and legal affairs
- A HIPAA Release-of-Information Form gives doctors permission to share your medical records with designated representatives.
- Durable Power of Attorney for Healthcare names a representative to make medical decisions on your behalf.
- A Living Will memorializes your wishes with respect to being kept alive artificially on life support in the event you are in a persistent vegetative state. In this regard, think about the tragic case of Terri Schiavo.
Plan for Long-Term Care
People today are living longer than ever before, but that doesn’t necessarily mean that you will be able to completely care for yourself until the day you pass away. In fact, it is very likely that you will require some kind of long-term care, whether that means a home health aide, assisted living, or a nursing home.
Unfortunately, these are all all expenses that can quickly drain your savings and exhaust whatever you planned on giving to your family. Talk to an estate planning attorney about the different tools you may be able to use to set aside and protect money that can be used to pay for long-term care.
Probate is the process through which a decedent’s estate is settled. It involves publishing notices, lots of filings, hearings, and fees. It can be a long, drawn out affair that lasts for several years and costs your heirs a great deal more than time and money. Assets, beneficiaries, and creditors must be identified, notified and distributions and/or payments must be made, all with judicial oversight at each step.
How you plan your estate will have a dramatic impact of the length, cost, and difficulty of this process. By consulting an estate planning attorney, you can make it much easier for your heirs to inherit the property you would like them to. There are even ways to avoid probate entirely.
To learn more about crafting the best estate plan for you, speak to an experienced and knowledgeable estate-planning attorney.
Barry E. Haimo, Esq.