Most people know that estate plans help protect your assets by avoiding probate fees and unnecessary taxes. But they also serve the critical role of protecting your family by letting them know exactly what you hoped for yourself and your loved ones. A good estate plan should be able to head off arguments over everything from health care decisions, to funeral arrangements, to who gets the china. They provide a way to communicate your wishes even when you can’t share them directly.
There are a few components in every good estate plan:
In some cases, but not all, it is also helpful to include a Trust as part of your estate plan.
A living will is a document that protects you while you are still living. It allows you to provide instructions about the types of medical choices you would make for yourself so that, if you are incapacitated, your loved ones can make the choices you would have. A health care proxy or health care power of attorney is often included as part of a living will. It allows you to name a specific person to make health care choices for you.
It is wise to be as specific as possible when creating a living will – not only will it ensure that your agent makes the decisions that you would have, it can also protect your loved ones from the stress of disagreements over what they think you would have wanted.
A durable financial power of attorney is a document that lets you appoint a person to manage your assets during your lifetime. That way, if you are incapacitated, they can do everything from paying the bills to making wise investment choices.
It is important to make sure any financial power of attorney you sign in Florida is labeled “durable”. Otherwise, it stops working if you’re incapacitated and doesn’t help you when you need it most.
For families concerned about young children, individuals with special needs, or managing assets like multiple real properties and business interests, trusts are a very important part of an estate plan.
However, with a little bit of guidance, careful planning, and preparation, many people can avoid probate fees and taxes without a trust.
Whether you are preparing your own estate plan or helping someone else establish theirs, get as much information as possible into one place.
Take a few hours to learn whatever you can about where and how assets are held if you don’t already know. This is especially important if you aren’t usually the one responsible for bills or investments.
Put together a list of financial andpersonal accounts (like Facebook and email) and your passwords. Include contact information for important people or organizations.
The most basic purpose of an estate plan is to communicate your wishes. One of the greatest gifts you can give your loved ones is the peace of knowing they are doing what you wanted after you are gone.