When it comes to estate planning, the word “planning” can mean many different things. There are two main categories into which estate planning falls, and that is short-term and the long-term. How you plan for the short-term differs from long-term planning, and, in this article, we’ll discuss the tools and documents behind both. The goals for each also vary.
Short-Term Planning
The Goals
Short-term goals include providing for the needs of you and your family in the present and near future. This means looking at what is currently affecting or will soon impact your family and planning the steps necessary to protect your loved ones.
The Tools
No one “plans” to fall ill suddenly and, unless there are extreme circumstances, the idea of falling suddenly ill is not something that people often worry about. Until now. With the coronavirus pandemic still coursing through the nation, it’s important to have your healthcare in order. This includes a healthcare directive, power of attorney, and guardianship, among other documents. A brief definition of each is given below.
A healthcare directive lays out your specific orders for healthcare providers in the event that you become too sick or incapacitated to tell these providers yourself. This directive can include Do-Not-Resuscitate orders or religious preferences. It is a deeply personal document that requires a lot of thought.
Your power of attorney is a trusted individual that you select to handle your financial and/or healthcare decisions if you are unable to do so yourself. Talk to your proposed power of attorney to make sure he or she is on board with this role.
Guardianship papers are necessary for people with minor children. The worst-case scenario for any disease, be it Covid-19 or something else, is death. If you die, make sure that you and your spouse have selected a guardian for your kids who will take care of them on the day-to-day level.
The End Result
The end result should be peace of mind. There is a lot going on in the world right now. Health-wise and finance-wise, it has become more and more common for families to struggle or be unsure about their future. Short-term planning will ease some of that burden and prepare you for what will happen in the long-term.
Long-Term Planning
The Goals
Long-term planning, both financial and otherwise, concerns the end-game after you have passed away. You will want to leave future generation(s) with financial support, and there are specific long-term tools that you can use to provide that protection. Long-term strategizing can also encompass plans for after you retire.
The Tools
There are a lot of estate planning tools that cover the long-term, and the ones defined below are only talked about briefly. These tools include wills, trusts, and insurance. Each topic could have (and has had) entire books written about it, but this is just an overview. Talk to an estate planning attorney to learn more about what each of these can do for you.
Your last will and testament is your definitive statement on where you want your assets to go after you die. In Florida, there are several requirements for a will to hold up in probate court and be declared “valid.” First, the will must be in writing. It has to be signed by the testator (you) or another person at your direction at the end of the document. At least two witnesses must be presence, each of whom must sign in the presence of you and the other witness.
A trust is a three-party relationship. You hand over legal title of an asset to a trustee, who keeps the asset in their care for the benefit of a beneficiary. When you tell the trustee to do so (or upon your death), he or she will hand over the property to the beneficiary, relinquishing legal title. Unlike a last will and testament, a trust avoids probate court.
Thirdly, insurance is vital. Life insurance and business insurance are enormously important. While people are used to the requirement of having car and health insurance, they may not think about life and business insurance, or any of the other types that are out there. Talk with an attorney about adding more insurance-related safeguards to your finances.
The End Result
The end result will be a life protected at key, long-term points, including death and retirement. Neither death nor retirement are cheap, but neither need to be arduous, if you know how to handle them.
As you can see, you have many different things to think about when it comes to short-term and long-term financial and estate planning. Your strategies and legal tools will vary for each, and it’s important to contact an estate attorney to set in motion plans to achieve your short- and long-term goals.
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