Estate planning is essential to personal financial planning in Florida, albeit focused on the time after your passing. As difficult as it may be to think about, avoiding estate planning results in costly responsibilities for your loved ones. No matter how familiar you may be with this process, we offer many reasons why estate planning is important below.
What is an Estate and Estate Plan?
Before we begin, we want to define an estate and an estate plan. An estate includes everything you own at the time of your death. This includes any financial accounts, liquid or investment accounts, real estate, life insurance policies, retirement accounts, savings accounts, stocks, and personal belongings.
An estate plan is a legal document that says what you would like done with all those assets after you pass away including beneficiary designations. Estate planning includes but is not limited to, powers of attorney (which can be used while one has capacity or in the case of incapacitation) and guardianship for minor children or special needs dependents. A comprehensive estate plan that includes all applicable estate planning documents is also a stronger choice than a will.
Why are Estate Plans Important?
- Protects Beneficiaries: The estate planning process is not just for those with a lot of wealth. Whatever is yours is what you want to protect for your beneficiaries. A major goal of estate planning is to legally identify your heirs so that the court doesn’t. It also helps them avoid a potentially lengthy and costly probate process.
- Protects Young Children: While none of us expect to pass away while our children are young, it happens sometimes. Establishing an estate plan while you still have minor children and/or special needs dependents means your children will be cared for by the guardians you feel are best for them and with the financial resources you leave behind.
- An Estate Plan Reduces Tax Bill for Heirs: Another important component of estate planning is protecting your heirs from undue tax burden for your estate. Estate planning attorneys are experts in tax planning to help you reduce federal estate taxes and state inheritance tax and estate taxes.
- Estate Plan Eliminates Family Messes: When you pass away, you want your loved ones to be able to support one another, rather than get caught up in a legal battle for the distribution of assets. Stop potential conflicts and court costs before they begin with an effective estate plan that works best for the unique makeup of your family and financial situation.
Regardless of estate size, an estate plan is an important legal step for anyone who wants to ensure their wishes are followed after their passing or incapacitation. Not only does this help protect your assets for your beneficiaries, but it also allows you peace of mind as well.
If you would like to discuss the aspects of estate planning, establish an estate planning strategy, or update an existing estate plan as your age and circumstances change, contact our expert estate planning attorneys today!