In what team president Pat Riley called an unsurprising move this morning, four-time MVP LeBron James opted out of his current contract with the Miami Heat. Before you let the panic you see from some on your Facebook feed overwhelm you, and before you buy into Knicks fans’ claims that LeBron is leaving South Florida for the bright lights of New York City, take a moment to think about the situation. If LeBron and the rest of the Big Three opted in to their current contracts, the Heat would have over $60 million worth of salary on the books. With a salary cap for the next season protected at $63 million, that would not give the Heat much room to work with. What LeBron appears to understand is that long term planning is the key to success. You too can plan ahead by “opting in” to an estate plan.
If you die without an estate plan, the intestacy laws of Florida will determine who gets your property. Depending on your marriage situation, this can lead to a distribution that does not meet your wishes. Most people think that a will is the best way to distribute your assets. While a will is certainly a way to legally distribute your assets, a will must be probated before the assets get to your beneficiaries. The probate process can cost you a great deal of both time and money, leaving your beneficiaries without the assets for an extended period of time. A will gives complete control of distributions at the time of your death, but that is where the control ends. Once the assets are distributed to the beneficiaries, they become the owners and can do with them what they please. This can unfortunately lead to situations where they lose their entire inheritance, either through divorce, remarriage, or creditors.
A trust based estate plan can be used to avoid probate while also allowing you to control your assets from beyond the grave and protecting them from creditors. A living trust allows you to still use your assets during your life and then keep whatever you give to your beneficiaries protected. Unlike a will, assets in a trust based plan will be kept in trust, meaning each of your beneficiaries will receive a trust fund that is protected from creditors, lawsuits, and divorce. A trust also allows you to leave to later generations without gifting them outright. For example, you can leave money in trust to your children for their lives, and then the remainder to your grandchildren. A trust based estate plan provides you the opportunity to look ahead to the future while also making sure you get to enjoy everything while you are still alive.
While the future of LeBron James, the Big 3, and the hearts of South Florida basketball fans still have to wait to see what the future holds, you can be prepared for whatever comes your way by opting in to an estate plan today.
For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.
It’s a Wild world. Are you protected?SM