What you don’t know can hurt you – and your family and your business. Being prepared means having a plan to navigate life’s unforgiving uncertainties both during life and after death.
We’re talking, of course, about estate planning, and it’s important to realize that this type of planning is very much focused on protecting and providing for those who survive you, making the transition for them easier, more seamless and smooth – ideally, with less chaos, court, costs, and conflict.
First, let’s get an overview on why you should engage in estate planning, then we’ll dig into several of the associated benefits.
Why Estate Planning and What Does It Entail?
Read Transcript
Hi. Thanks for tuning in to another episode of Bite-Sized Bits of Knowledge, where we give you a meaningful amount of information in a short amount of time. As you know, we’re going to be talking today at a high level about what is estate planning. Ultimately, we’ll get more granular as we go, and then we’ll zoom out. We’ll talk about business planning before, again, zooming in and getting more granular in terms of that.
So, for today: big picture estate planning. What is it? Why should you care? Well, to start, people have a misconception of what estate planning is and what it is not. People typically kneejerk into thinking it’s about a will. And, of course, who gets my stuff?
People think they don’t have assets, they don’t have estates. People don’t want to talk about it. They don’t want to think about it. They certainly don’t want to invest money in it. And overall, people procrastinate like crazy when it comes to estate planning.
Unfortunately, we’ve learned from experience in over 10 years of doing this in Haimo law, at least and more time for me doing this outside of Haimo law, that the people who survive are the ones who really end up paying the price financially, emotionally, and logistically or administratively. You don’t want to deal with it now, that’s fine. Someone else is going to deal with it later. I guarantee you that. And it may not be the legacy that you would have liked to have left.
So with that being said, estate planning, at its core, is allowing you to make decisions for yourself that you have the power to make. If you don’t make them, rest assured, a judge who you don’t know – who doesn’t know you – will make the decision for you based on the statute. There are default rules that kick in in all circumstances. So either you decide or the judge will decide for you.
In regards to what types of decisions that they’re going to make for you. Well, let’s talk about that at a high level. To start, estate planning relates to during life issues as well as postmortem issues. During life issues will deal with things like: God forbid something happens to you mentally or physically and you need someone to help take care of you, your finances, your health, your social calendar, your family that you see or don’t see. It will involve the care you get and the medical decisions that are made to help you and save you. Of course, when you pass away, it deals with your immediate post mortem final disposition, as well as wrapping up your final affairs, dealing with creditors, and making sure that everything kind of goes to the people that you either choose or will be chosen for you.
Things like big picture ideas. We’re talking probate guardianship, homestead, collective share, asset protection and creditors, estate tax, gift tax, generation skipping transfer taxes, federal income taxes. There is just so much that goes in to this. You bring in inheritance law, marital law, family law, divorce. All of this is relevant to the state planning, so it’s important to understand how it all fits together in what I like to call a gigantic, confusing Rubik’s Cube.
The next few videos are going to get a little bit more granular into each different subject, and I’m going to give you kind of a crash course. I hope you find it to be helpful. Thank you very much. Thanks for stopping by and stay tuned for more.
Now that you understand estate planning a bit more, let’s talk about some of the benefits of engaging in the process with a knowledgeable attorney.
The Benefits of Thoughtful Estate Planning
Here are just a few benefits of thoughtful planning:
Control aspects of your lifetime caregiving needs and post-mortem wishes to both live and die with dignity.
In Florida, an Advanced Directive is a legal document that allows individuals to specify their healthcare preferences and appoint a healthcare surrogate to make medical decisions on their behalf if they become unable to communicate or make decisions for themselves due to incapacity.
Advanced Directives in Florida typically include two main components:
- Living Will – which typically addresses decisions regarding life-sustaining treatments such as resuscitation, mechanical ventilation, and artificial nutrition and hydration.
Designation of Healthcare Surrogate – which allows individuals to appoint a trusted person to act as their healthcare surrogate or proxy, authorizing them to make medical decisions on behalf of the individual if they are unable to do so themselves.
Choose your beneficiaries and fiduciaries – instead of a random judge doing it.
Do nothing, and you cede control over how your assets will be distributed. Existing laws and whatever judge happens to be put on your case will decide for you. But if you engage in professional planning, you get to be the one in control.
Keep assets in the family for generations and out of reach of creditors and spouses.
There are several estate planning tools that individuals can utilize to protect their wealth. These tools help minimize estate taxes, avoid probate, and ensure that assets are distributed according to the individual’s wishes.
Some of the key estate planning tools in Florida include:
- Trusts
- Homestead Protection
- Gifting Strategies
- Family Limited Partnerships (FLPs) and Limited Liability Companies (LLCs)
- Durable Power of Attorney
Minimize costly and explosive litigation which will destroy wealth and families.
Dying without a plan – or having a poor plan – can result in extensive, costly, and time-consuming litigation that drags the people you love through the emotional wringer.
Crafting a strong estate plan can help them to minimize all of that, making the distribution of your assets go as smoothly as possible.
Maximize likelihood that your plan will be fulfilled and not challenged.
One of the things that many people don’t consider in regards to making sure their wished are carried out after they’re gone is the fact that it is possible for people to challenge those wishes for their own gain.
How can you combat this? With a strong estate plan. That means doing things like:
- Drafting clear and detailed documents
- Using trusts
- Communicating your intentions to loved ones
- Building in a No-Contest Clause
- Update your plan regularly
Give more to your family or charities than the government by reducing taxes.
Laws determine how much an estate must pay in taxes. However, strategic estate planning can minimize the taxes you pay and help your beneficiaries keep more of your wealth.
Bottom Line? Planning for After You’re Gone Isn’t Fun – But It Is Worth It
No one wants to think about their loved ones having to struggle and deal with difficult circumstances due to decisions that they made. But if you’re not crafting a strong estate plan, that’s pretty much guaranteed to happen.
Don’t keep putting it off. Get in touch with our office today and start getting your future in order – for your loved ones’ sake.
Originally published 04/08/2021. Updated 02/29/2024.
Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose®
Email: barry@haimolaw.com
YouTube: http://www.youtube.com/user/haimolawtv
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