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Why estate planning matters

On Behalf of | Sep 1, 2020 | Estate Planning

When a Florida resident dies without an estate plan, the state will determine how that person’s assets are distributed. This could mean that a spouse is left without enough to live on or that a charity or others the person hoped to leave assets to receive nothing. There could also be tax implications, or the family might end up in litigation fighting over the estate. Estate planning is also important for parents of minor children. Without an estate plan, a court decides who will be the guardians of their children, and the children will automatically receive any inheritance on turning 18.

In case of incapacity

Estate planning is not just about making sure that your assets will be distributed as planned. It also involves making a plan to have someone take over health care decision-making and your finances if you cannot do so. A power of attorney can appoint someone to manage financial and legal matters while documents known variably as advance directives, health care proxies or living wills can outline your health care wishes and appoint someone to make medical decisions on your behalf.

Wills, trusts and asset planning

For some people, a will is sufficient for distributing assets. A will does have to go through the probate process, and for this reason, some people prefer to use a revocable trust instead. This can be created along with a “pour-over will” that places any remaining assets in the trust on the person’s death. A trust bypasses probate and can also give a person more power over when and how assets are distributed. This might include specifying that minor children will receive their share at a certain age.

A will appoints an executor to manage the estate. This does not need to be a person with a legal background although the person should be organized and trustworthy. An executor may hire an attorney or other professionals to help with the probate process and other elements of estate administration.