Estate planning is one of the most critical aspects of life that every Floridian in Delray Beach must consider. It ensures that your assets are distributed after your death the way that you want them to be, and it can also help you avoid many potential pitfalls. If you fail to put together an estate plan, your assets would be distributed through intestacy laws that vary by state.
By failing to have an estate plan in place, this could lead to the unintended consequence of having family members who you may not want to inherit your assets actually inheriting a large portion of your estate. Therefore, the best thing is understanding the fundamentals of estate planning.
1. Will or Trust
Everyone should have an estate plan to make sure their assets are distributed according to their wishes when they die. A well-drafted will may make the process much easier. Additionally, anyone with substantial assets in any form (i.e., cash, stocks, real property) or with minor children should also consider a trust document to communicate their wishes and avoid the probate process, as well as put certain guardrails in place for their minor children.
A common misconception about estate planning is that only wealthy individuals need estate plans. The reality is quite different. Although many people assume that when they do not have much in assets that they do not require a will or trust for their estate plan, it is still important to have such items to be able to ensure that your wishes are carried out after death. A will is a straightforward document to create , but it is important to have an attorney who specializes in estate planning to ensure that it is being done properly.
2. Durable Power of Attorney
No one wants to think about the possibility of losing mental capacity, but it’s essential to have plans in place if this ever becomes an issue. There are two main types of documents that come into play when considering how to prepare for this situation – a “power of attorney” and a ” health care surrogate.”
A durable power of attorney allows you to name a specific person to make legal and financial decisions for you, and it takes effect immediately, while a health care surrogate names an individual to make medical decisions on your behalf.
3. Business Succession Planning
Everyone needs to think about how their business will continue without them. This can be done within your operating agreement or bylaws, or by using a buy-sell agreement where the company owners agree upon what would happen in death, disability, or retirement. If this is not done, there can be a conflict between co-owners, which could affect their working relationship and even result in costly litigation.
4. Beneficiary Designations
Beneficiary designations are one of the best ways to ensure that your estate plan adheres to your wishes no matter what. All you need to do is make sure all beneficiary designations are updated on any accounts or policies you may have, i.e., insurance, retirement plans, etc.
Many companies provide free online access for their customers to update their beneficiary designations to make this process easy, so take advantage of it. Employing Delray Beach Estate Planning Attorney specializing in estate planning is a great way to ensure that everything is taken care of. They will be able to help you draft a will, trust, and other vital documents, as well as help you plan for the future of your business.
5. Letter of Intent
Although it is impossible to plan for every scenario, another great way to ensure that your wishes are understood is by creating a letter of intent. It can include information on funeral plans and final disposition, who should inherit certain items of tangible personal property, etc. Writing out your thoughts will ensure that your family and friends clearly understand what you want. However, it is important to note that this does not take the place of a will. In order for your wishes to be carried out, you must ensure that you have a valid will and/or trust at the time of your death.
6. Healthcare Surrogate and Living Will
A living will is a document signed by you that states what type of medical treatment you would want if you were terminally ill, in a coma, or otherwise unable to make decisions for yourself. It should go to your healthcare providers and family members to know how you feel about these issues.
A health care surrogate (also known as medical power of attorney or proxy) is another document capable of giving someone else the ability to make medical decisions on your behalf. However, it does not take effect unless you lose mental capacity.
7. Guardianship Designations
If you have children and want to make sure they are taken care of in the event of your death, it is important that you name a guardian for them. Naming a guardian ensures that your wishes are known as to whom you want caring for your children upon your death. Most jurisdictions also require that guardianship designations be confirmed by a judge, so it is important that the judge know who you would select to be your child’s guardian.
Your attorney can advise you on all the available options to ensure that you are protected should something terrible happen. It’s important to remember that estate planning is not limited to just getting everything in order upon your death, but also for preparing for a situation where you may be unable to make decisions for yourself.
8. Retirement Plan Beneficiary Designations
When a person dies, their retirement plan passes to the beneficiaries they have chosen. If you don’t want your ex-spouse to get half of your retirement plan, or to pay probate fees on one of your largest assets, then it is important to remember to update your beneficiary designation.
Both IRAs and workplace plans such as 401Ks allow the account owner to choose multiple beneficiaries. This is an excellent feature because it will enable individuals to make sure that their retirement savings are divided up in the way that they want.
9. Life Insurance Beneficiary Designations
If you have a life insurance policy, it is important that you list someone as the beneficiary. This allows the policy to be paid directly to that individual upon your death and avoid probate. This also allows you to direct whom the funds will be paid to.
It is crucial to have a will, power of attorney, living will, and healthcare power of attorney in place so that your wishes are known if something happens to you. An estate planning attorney can advise you on all the different options available to you and help you make sure everything is taken care of so you can rest easy.