How To Start 2023 Off The Right Way: The Importance Of An Estate Plan.
It’s amazing to think that we’ve made it through another year. We’re already a few weeks into 2023, and it’s time to start thinking about ways we can secure our financial situation—and our financial future. When it comes to your financial future, an estate plan is the way to ensure that your assets are protected, even after death. In this article, we will discuss the importance of an estate plan, including its benefits, popular documents, and other information to know.
What Is An Estate Plan?
It’s best to think of estate planning as a process, rather than as a specific document. When you have an estate plan, you anticipate and arrange for the management and disposal of your estate if you are incapacitated or dead. In layman’s terms, in an estate plan, you set up a series of documents that will guard your assets (home, bank accounts, personal items, and more) if you become sick or injured and/or after you die.
The process involves seeking the counsel of lawyers and professional advisors who are familiar with you, your family, and your concerns and goals. It is never wise to “DIY” an estate plan, as the laws, especially in Florida, are intricate and can be complicated for non-lawyers.
Who Should Have An Estate Plan?
When people think of an estate plan, they likely think of a last will and testament, which, in turn, brings to mind the elderly or super-wealthy. That’s a common misconception, as estate planning is for everyone. If you have assets and a family, you should execute an estate plan, no matter your age, wealth, or the state in which you live. While some factors, such as the size of your estate, do matter with regards to the planning process, most people should have an estate plan.
The Benefits Of An Estate Plan
Now that we’ve covered what an estate plan is and who should have one, we can move on to the benefits that an estate plan brings. The main purpose of estate planning is to secure and plan for the disposal of your assets when the time is right.
Other benefits and functions of estate planning include:
· Your assets will go to the right people (also known as your beneficiaries).
· You can plan for your financial investments.
· You can plan for your healthcare arrangements when you are at the end of your life.
· Guardianship for minors can be arranged.
· You can set up trusts.
· You can minimize the probate process, thus lessening its expenses, loss of privacy, and delays.
· Estate planning protects assets, and it can also protect the future of your business, if you own one.
This comprehensive list underscores the main reasons why you should have an estate plan. But, what if you’re still not sold? What can happen if you don’t have an estate plan? As it turns out, things can get disastrous.
What Happens If You Don’t Have An Estate Plan?
If you die without an estate plan in place, a court will deem to you to be “intestate,” and, therefore, subject to the rules of intestate succession. Your family and estate will go through probate court, an expensive, lengthy, and privacy-invading process. The probate court will distribute your assets as it sees fit, giving them to creditors and people who you might not have wanted to receive such property.
Common Estate Plan Documents
When setting up your estate plan, chances are that you’ll have one or more of these common documents in it:
· Living Trust. This three-party relationship involves you, the grantor, assigning tittle over an asset or assets to a third party, a trustee. That trustee then holds title to the assets until a pre-designated time, at which they will transfer title to your beneficiary.
· Power of Attorney. This arrangement can come in various forms, including a Durable and Healthcare P.O.A. Your Power of Attorney is a trusted individual that you appoint to manage your financial and/or healthcare affairs in the event you become incapacitated and unable to manage them yourself.
· Last Will & Testament. The most common document people think about when they hear “estate plan,” the last will and testament is a final expression of your will as to where you want your assets to go after you die.
Hopefully, this article has gotten you thinking about contacting an estate planning attorney. Our WFP lawyers will help you put together comprehensive plans that include all of the documents pertinent and important to you, your life, and your family.