The process of estate planning involves developing a long-term plan for your finances and all of your belongings. At Rooth & Rooth Elder Law Attorneys, our experienced attorneys work with Florida residents to strategically plan for the future for both you and your loved ones.
What Is Estate Planning?
Estate planning is the process of determining who will receive your assets and manage your responsibilities in the event of death or incapacitation. Anyone who wishes to have their valuable assets transferred to another individual should consider developing an estate plan, as these formal documents can ensure that your beneficiaries receive your assets in the manner in which you intend them to.
When planning the future of your estate, it’s imperative that you avoid common errors including but not limited to:
- Naming only one beneficiary
- Improperly funding your trust
- Not securing your estate plan
Getting Started With Your Estate Plan
Since estate planning can be a complex process, the following steps can offer you guidance on how to get started to ensure that you plan accordingly.
Gather a list of tangible and intangible assets
When beginning your estate plan, you’ll want to collect an inventory of your estate’s tangible and intangible items and estimate their total value. Tangible assets, personal property that you can see or touch, may include:
- Home, land, or any other real estate property
- Vehicles
- Furniture
- Jewelry and clothing
In addition to accounting for all of your tangible items, you’ll also want to compile a list of intangible estate assets. These items, though they aren’t physical in nature, have value and can be transferred to another individual. Common examples of intangible assets include:
- Checking and savings accounts
- Stocks, bonds, and mutual funds
- Retirement plans, including 401(k) plans
- Business ownership
Determine who will care for your assets and dependents
Good estate planning involves considering a variety of important factors such as how you want your assets distributed after death, who you would like to manage your finances if you become incapacitated, and if necessary, who you’d like to take care of your dependents.
Establish important legal directives
Legal directives are estate planning documents that allow you to have your end-of-life decisions in writing for family members and friends. While there are many different options for legal directives, some include trusts, wills, power of attorneys, healthcare surrogates, and living wills.
Determine beneficiaries
When accounting for all aspects of your estate, you’ll also want to consider who will receive the benefits of your trust, will, or life insurance policy following your death. Common options for beneficiaries include:
- Your spouse
- Your children and grandchildren
- Your friends
- Charities
Components of Estate Planning
Though the process of estate planning can be tricky, understanding the essential components of a good estate plan can help guide your decisions and ensure proper planning.
Last will and testament
Recommended for everyone, last wills and testaments serve as written statements for who or what will receive your assets, money, and property following your death. When writing your will, you’ll need to be prepared to discuss the following information:
- A collection of both tangible and intangible assets
- Any debts you owe
- Your beneficiaries
- The executor of your estate who will be responsible for distributing your assets
Trusts
If you know which items you’d like to pass on to your beneficiaries, a trust allows you to store certain assets for chosen heirs to later access. While there are many different types of trusts, the two most basic types are:
- Revocable trusts: Also known as a living trust, this type of trust allows the terms to be changed during your lifetime.
- Irrevocable trusts: Unlike revocable trusts, the terms of irrevocable trusts cannot be modified or terminated after their creation.
Power of attorney
A power of attorney is a legal document that allows a representative to act on your behalf regarding legal and financial affairs. Useful if you become unable to make your own decisions, a power of attorney involves many different types, with two of the most common including:
- A durable financial power of attorney: This legal directive allows another individual to manage your legal and financial affairs if you become medically unable to do so.
- A limited power of attorney: If you’re concerned about completely handing over your legal and financial affairs to a representative, this directive can impose limits on the powers of your representative.
Healthcare surrogates
A healthcare surrogate is a third party who is delegated to exclusively make medical decisions on your behalf if you become unable to do so. A healthcare surrogate and a power of attorney will work together to ensure that your best interests and wishes are met as outlined in your legal documents.
Living wills
While a last will and testament determines how your assets will be distributed after death, a living will states your medical care wishes if you become unable to communicate healthcare decisions. Though all people can benefit from obtaining a living will, those who are already sick or receiving treatment for a health condition should especially create one to plan properly.
Incapacity planning
Incapacity planning involves preparing legal documents to authorize a designated individual to handle your healthcare and financial choices when you become incapacitated. When incapacity planning, you’ll determine a healthcare surrogate or power of attorney to manage your affairs.
Hiring an Estate Planning Attorney
As estate planning can be tedious, an estate planning attorney can guide you through developing a long-term plan, drafting important legal documents, and making sure you’re all accounted for. When selecting which estate planning attorney is right for you, you’ll want to determine your specific needs, factor in costs, and ask others if they can recommend an attorney. Before settling on an estate planning attorney, it can benefit you to learn about the firm:
- Do you primarily focus on estate planning?
- How long have you been practicing estate planning?
- Can you help me create an estate plan that covers trusts, wills, and advanced directives?
FAQs
What is the difference between an estate planning attorney and a probate attorney?
An estate planning attorney is involved in developing a will, trust, or other legal document and is consulted before incapacitation or death. By contrast, a probate attorney is responsible for administering the estate and its assets of an individual after death.
How often should you revisit your estate plan?
The general recommendation for reviewing your estate plan is to do so every three to five years or when you undergo a major life development.
Should digital assets be included in an estate plan?
As with all tangible or intangible assets, you should include any digital property, including devices, video and photo files, and even social media accounts in your estate plan.
Schedule a Consult Today
At Rooth & Rooth Elder Law Attorneys, our team of knowledgeable attorneys has more than 50 years of experience in elder law. Committed to helping the elderly and their families navigate the complexities of estate planning, we give efficient and cost-effective solutions to all of our clients’ concerns. To learn more about how our elder law attorneys can help you develop a comprehensive estate plan, contact us today.
