Florida residents know that it is very important to make post-death arrangements for assets. However, did you know that 92 percent of adults under age 35 have not made any estate plans?
While many people assume their family will automatically inherit any assets they leave behind, this is not entirely true. Assets are held in probate court and distributed according to state law. Furthermore, the process can be very expensive and emotionally exhausting for your family.
Efficient estate planning involves a few essential legal documents. A recent article notes that experts recommend the following:
• Will: You should create a will when you have assets or start a family. Assets can be left to loved ones through this legal document. A will additionally names executors, who manage and distribute assets to specified inheritors. Furthermore, your will should designate guardians for your children in the event that both parents were to pass away.
• Durable power of attorney: This document gives your spouse or another individual the power to make financial or legal decisions on your behalf. So, if you were to become incapacitated, someone could make arrangements for you.
• Healthcare proxy: This legal device grants power to an individual to make medical decisions if you become incapacitated. Depending on the state, family members may make some healthcare decisions if no healthcare proxy is in place. However, this requires your family to go to court. The legal process can be very expensive without a healthcare proxy.
Another estate planning option is a trust. Trusts give you greater control over who receives your money. Also, many trusts are not reachable by creditors. There are various types of trusts, which include the following:
• A Qualified Terminable Interest Property (QTIP) trust provides for the marital deduction and guarantees that a spouse cannot use assets to benefit a future spouse or nonmarital children.
• A special needs trust provides for a child in need without compromising his or her access to government benefits.
• Furthermore, an age-terminating trust for minor children distributes portions of the inheritance at specific, predetermined age intervals.
• A pet trust provides care for your pets after you die.
Do you have arrangements for your loved ones? If you are ready to make plans for your assets, you should speak to an attorney about estate planning options.
Source: U.S. News & World Report, "What type of estate and tax planning do I need to do?" Susan Johnston, Feb. 27, 2012