At the Fischetti Law Group, we can help you plan and protect for your future by working with you to create an Estate Plan according to your wishes. Schedule a free consultation with our estate planning attorney today to start planning for you and your family’s future.
What is Estate Planning?
Estate planning: It’s a term you’ve probably heard, but may not fully understand. Often perceived as a task reserved for only the wealthy or elderly, estate planning is actually a critical process for individuals at various life stages and income levels. Let us clarify the meaning of estate planning, break down its essential components, and discuss why it’s important for everyone.
What is Estate Planning?
Estate planning is the process of arranging the distribution and management of your assets, both during your lifetime and after your death. It involves creating a set of legal documents that detail your wishes regarding your assets, dependents, and your health care. The goal of estate planning is to ensure that your estate is transferred to your designated beneficiaries as smoothly as possible, while minimizing any taxes, legal fees, or other expenses.
Why Is Estate Planning Important?
- Asset Protection: Strategic estate planning can protect your assets now and in the future. Without a proper estate plan, your assets may not go to the beneficiaries you’d like them to, and the assets could be heavily taxed.
- Peace of Mind: A well-executed estate plan allows you to dictate your wishes clearly, providing peace of mind for you and your loved ones. You’ll be able to live your days knowing that your loved ones will be taken care of as a result of your careful planning.
- Healthcare Decisions: Unexpected events happen every day, and no one ever knows what the next day may hold. By establishing living wills and healthcare proxies, you can specify what medical actions should be taken if you’re unable to make decisions for yourself.
- Guardianship: Establishing guardianship is perhaps the biggest priority for young families looking to begin the estate planning journey. If you have minor children or dependents, designating a guardian is essential to ensure their well-being in your absence.
- Avoid Probate: Probate is a long and expensive process that happens when individuals pass away without an estate plan. Proper estate planning can help your heirs avoid the time-consuming and costly probate process.
- Estate Planning is only for the elderly. Estate planning is not only for the elderly; unexpected life events can happen at any age. If you have any sort of assets or beneficiaries, it is essential to begin your estate planning before it’s too late.
- Estate Planning is only for the wealthy. Regardless of your financial situation, you likely have assets—like a car or a bank account—that require planning. In the 21st century digital assets are also common, and they’re a factor to consider when planning for your asset distribution.
- Estate Planning is too complicated: While it can be complex, a qualified estate planning attorney can guide you through the process. Our estate planning law firm can help turn a disorganized headache into a simple estate plan customized to your needs.
How to Get Started
- Inventory Assets: Making an inventory of your assets is the foundational step in estate planning. This involves creating a comprehensive list of everything you own. It’s important to be thorough and meticulous. Here’s how to go about it:
- Real Estate: Include all properties you own, such as your primary residence, vacation homes, rental properties, and undeveloped land.
- Bank Accounts: List your various bank accounts, including checking, savings, certificates of deposit (CDs), and any offshore accounts.
- Investments: Catalog your investments, such as stocks, bonds, mutual funds, retirement accounts (e.g., 401(k), IRA), and any other securities.
- Personal Property: Document valuable personal belongings like jewelry, art, vehicles, collectibles, and household items. It’s also essential to include digital assets like websites or online businesses.
- Liabilities: Don’t forget to account for debts and liabilities, including mortgages, loans, credit card balances, and any other obligations.
- Choose Beneficiaries: Determining who will inherit your assets is a central aspect of estate planning. Careful consideration is needed to ensure your wishes are carried out. Here’s what to keep in mind:
- Family Dynamics: Consider the needs and relationships of your family members. Decide how you want to distribute your assets among your spouse, children, grandchildren, and other relatives.
- Charitable Giving: If you have charitable intentions, think about which organizations or causes you want to support through your estate plan.
- Contingency Plans: Establish contingent beneficiaries in case your primary beneficiaries are unable to inherit, ensuring your assets won’t end up in probate.
- Minor Children: If you have minor children, appoint guardians and establish trusts to manage their inheritance until they reach an age of responsibility.
- Consult Professionals: Estate planning can be complex, and it’s essential to seek advice from an estate planning lawyer. Here’s how an estate planning attorney can assist you:
- Estate Planning Attorneys: Estate planning attorneys are experts in crafting legally sound documents, such as wills, trusts, and powers of attorney. They can help you navigate complex legal requirements and ensure your estate plan complies with state and federal laws.
- Execute Documents: Once your estate plan is carefully crafted with the guidance of professionals, the next step is to execute the necessary legal documents. Here’s what’s typically involved:
- Wills: Your will is a legally binding document that outlines how your assets should be distributed upon your death. It should be signed in the presence of witnesses and comply with state-specific legal requirements.
- Trusts: If you establish trusts, ensure that the necessary legal documents are drafted and executed to fund the trusts and specify their terms.
- Advance Directives: Execute documents like a durable power of attorney for healthcare and a living will to ensure your healthcare and end-of-life preferences are known and respected.
- Beneficiary Designations: Review and update beneficiary designations on accounts like retirement plans and life insurance policies to align with your estate plan.
- Legal Formalities: Consult your estate planning attorney to make sure all documents meet legal requirements and are properly signed and notarized.
- Review Regularly: Estate planning is not a one-time task; it’s an ongoing process. Life events such as marriage, divorce, the birth of a child, changes in financial circumstances, or the passing of a beneficiary can necessitate updates to your estate plan. It’s important to:
- Regularly Review: Periodically revisit your estate plan, ideally with the assistance of a legal professional, to ensure it remains current and aligned with your wishes.
- Update as Needed: Make necessary revisions to your estate planning documents when significant life changes occur. This includes modifying beneficiary designations, updating wills and trusts, or appointing new guardians if circumstances change.
- Communication: Keep your family members informed about your estate plan and its details to avoid potential disputes or confusion in the future.
Estate planning is the process of legally arranging for the management and distribution of your assets and property after your passing. It involves creating legal documents such as wills, trusts, and powers of attorney to ensure that your wishes are carried out regarding the inheritance of your assets and the care of your loved ones. Estate planning helps protect your family’s financial future and can minimize potential conflicts or legal complications during the probate process.
When you create an estate plan, it is important to make sure every asset is transferred to the beneficiaries of your choice. The heirs or beneficiaries that you choose will get the property, money, or other assets assigned to them.
Another goal of estate planning is to accrue the least amount of taxes, legal fees and court costs related to asset distribution once the wishes in your estate plan are carried out.
Assigning guardianship for under-aged children so they get the care they need is a very important goal of estate planning and should be a priority for young families.
A proper estate plan should aim to include instructions for your care if you become disabled before you pass away.
You should review your estate plan as your family, financials, and state laws change to make sure your decisions are still the most beneficial to everyone involved in your estate plan.
A will is a written direction controlling the disposition of property at death. An important part of estate planning comes from the will.
However, it’s important to keep in mind that a last will is only part of an estate plan, not an entire estate plan. Estate planning includes more than your last will and testament. Estate planning also includes establishing a power of attorney, an advanced directive, and trusts for your children, grandchildren, favorite charity, or even a beloved pet.
If you were to pass away without a will, also called “intestate”, all your property would be distributed to your heirs according to a formula fixed by the current law. Only when a person has no heirs at law will the state of Florida will possess the property. The formula that determines who gets your property is called the inheritance statute. You should have in mind that the formula makes no exception for those in unusual need when distributing the property. When you write your will, however, you can decide your preferences and exceptions.
A trust is a legal arrangement that allows an individual, known as the “grantor,” to transfer assets or property to a separate entity, called a “trust,” for the benefit of specific individuals or entities, known as “beneficiaries.”
The trust is managed by a “trustee” who administers and distributes the assets according to the terms and instructions outlined in the trust document. Trusts are commonly used in estate planning to protect and manage assets, provide for loved ones, and potentially minimize estate taxes.
One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it. A will is a document that directs who will receive your property at your death, and it appoints a legal representative to carry out your wishes.
By contrast, a trust can be used to begin distributing property before death, at death, or afterward death. A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee”, holds legal title to property for another person, called a “beneficiary”. A trust usually has two types of beneficiaries — one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies.
What would happen to your kids if you or your spouse were involved in a major accident on the way home from work? Who will pick your kids up from school or daycare? Who will ultimately end up as their guardian? A lawyer can help you plan all of those decisions while guiding you through the steps making sure all aspects of your estate plan are covered.
If you are a small business owner, you absolutely must have an estate plan. It’s one of the most important things you can do, and it should not be procrastinated. If something were to happen to you, your business would likely fall apart quickly and completely without a proper estate plan. This could cause incredible financial hardship on your family after you’re gone.
When an estate plan is not created thoughtfully with the advice of an estate planning lawyer, you could risk the estate going into probate. In probate, most of the money from the estate goes to attorney’s fees and court costs. When a person dies without an estate plan, the courts are forced to handle everything: the distribution of the property, the guardianship of children, the dissolution of the business. Probate can become very expensive — easily exceeding $10,000 for even modest estates. That is money beneficiaries could use for living expenses and necessities. If an estate plan is not created carefully, the value of estate could be significantly decreased in probate court.