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The Importance of a Properly Executed Estate Plan
No one likes to talk about creating a will or other end-of-life planning as it can be a grim conversation. However, when it comes to your future care and ensuring that your family and heirs' needs are met in the event of your death, it's critical to have all the right components to an estate plan for it to be executed according to your wishes.
One of the first steps to take when starting your estate plan is to understand the pitfalls and mistakes that many people make, and avoiding them can save you and your family from going through some red tape when it comes time for your estate plan to go to work. Here are 10 estate planning blunders to avoid.
1. Not Having a “Solid” Estate Plan at All
While you may verbally tell your children, spouse, or other family members your wishes, it's not something that can hold up if there are some family disputes in the event of your death or incapacitation. If you do have an estate plan, how do you know if it's “solid?” By “solid,” we mean that It's critical for an estate plan to be appropriately written according to Florida laws. Having a well-executed estate plan can help to avoid probate and other legal issues when it comes time to carry out your wishes. Without a valid will or trust in place, it can be left to the courts to decide where your assets go.
2. Not Updating Your Estate Plan
When it comes to estate planning, there's no such thing as “set it and forget it.” Situations change in life more often than you may realize. From marriage and children to making moves to a new state, it's critical to review your estate plan and make updates according to your goals. You should regularly review your beneficiaries and make modifications to fit your current life situation.
3. Not Planning For Long-Term Care
While you may be young and healthy now, as we get older, life can throw curveballs when it comes to health, and not having a long-term care plan in place puts you and your family in a precarious financial situation. Assisted living and nursing care facilities, should you need one in the future, can cost hundreds of thousands of dollars each year. Planning for disability and long-term care can ensure you are taken care of as you move into retirement age. Consider a long-term care insurance policy to give you peace of mind.
4. Not Planning for Estate Taxes
When a person dies in Florida, the state will not levy a tax on their estate. However, if your heirs are Florida residents, they may still have to pay inheritance tax if they inherit your property. When crafting your estate plan, it's critical to speak to an estate planning attorney to understand your options. Your attorney will be able to explain how inheritance tax works, so you can ensure you have the best plan in place to maximize your heirs' inheritance.
5. Not Having Proper Ownership of Assets
While spouses may want to keep property separate, this could leave you unprotected against creditors when it comes to transferring property upon the first spouse's death. When creating your estate plan, review all your properties and assets to ensure both spouses have proper ownership to avoid future problems.
6. Not Having Asset Liquidity
Having the right amount of asset liquidity is essential when splitting your assets among children, surviving spouses, and other heirs. One way to ensure asset liquidity is to have life insurance which can split up wealth and pay off debts. If you own a business, life insurance can ensure your heirs have enough cash to continue to run your business in the event of your death.
7. Not Understanding the Impact of Income Tax
When leaving certain assets to your loved ones, you may not realize that these assets could be subject to income taxes. Check with your financial advisor or trusted estate planning lawyer to learn more about what tax implications come with the assets you are leaving to your beneficiaries so everyone can be prepared.
8. Not Considering a Plan for Minor Children
One of the most important parts of estate planning is to make sure children are cared for in the event of your untimely death. It's also critical to have a guardian and list instructions on how the money should be used to support your children.
9. Not Considering Charitable Gifts into Your Estate Plan
If you like to give back to your community, you may not know you have the option to make a contribution after your passing. You can incorporate charitable gifts into your estate plan by donating a retirement account or creating a charitable trust. An estate planning attorney can help you work out the details.
10. Not Hiring an Estate Planning Attorney
While there are many do-it-yourself estate planning tools online, it could put you at a disadvantage. Having an experienced estate planning lawyer is critical for having a plan that is cohesive with Florida laws. When constructing an estate plan, it's essential to give attention to detail to avoid future problems for you and your beneficiaries.
Need to Update Your Estate Plan? Owenby Law, P.A. Can Help.
Making mistakes when preparing an estate plan can mean your wishes may not be carried out as you intended. While you may be able to create an estate plan on your own, it may not be the right choice for everyone. Whether you need to update an existing will or create a new estate plan, it's critical to seek the help of an experienced estate planning attorney to ensure it's prepared properly, and according to Florida estate laws.
Our Jacksonville estate planning attorneys are ready to answer your questions and walk you through the process so you can rest assured that your heirs are protected.
Contact Owenby Law, P.A.today at (904) 770-3141 to schedule a free initial consultation with our team.