To Do List: Why You Need to Get Your Estate Plan Done This Year

Have you been putting off preparing your estate plan? While the thought of death—or any of life's other unpleasant circumstances—seems scary and anxiety-inducing, having a solid estate plan in your pocket for whatever situation may arise is a sure-fire way to give yourself and family long-lasting peace of mind.

Photo: Glenn Carstens-Peters

Another year has begun and it's time to take account of the all the important financial aspects of life such as taxes, retirement savings, and an up-to-date estate plan. To ensure your assets and loved ones are protected, it's crucial to get your estate plan in order so you know what will happen to your property, bank accounts, businesses, and even your children should something happen to you or your spouse. Working with a Florida probate attorney can help you in making the most sound decisions as you cover the bases of your estate plan.

In this article, we will discuss important steps to take to get your estate plan ready for the new year.

Whether you already have a Florida estate plan in place or are starting from scratch, now is the perfect time to review your documents and make any necessary updates. From updating beneficiaries and asset ownership to revisiting your will and trusts, there are several crucial components to consider that a Florida estate planning attorney can manage. By taking the time to review and update your estate plan, you can ensure your wishes are accurately reflected and minimize any potential complications or disputes down the line.

The Importance of Estate Planning

Estate planning is an essential aspect of financial planning that often gets overlooked. As a probate lawyer in South Florida for over 30 years, I know many people mistakenly believe that estate planning is only for the wealthy or elderly, but the truth is, everyone can benefit from having a well-thought-out estate plan. It allows you to have control over what happens to your assets and who receives them after your passing.

One of the key reasons why estate planning, and estate planning services, are crucial is that they help protect your loved ones in the future. Without a proper plan in place, your assets may be subject to probate, a lengthy and expensive legal process. By creating an estate plan with a trusted Florida probate attorney, you can ensure that your assets are distributed according to your wishes, minimizing the stress and uncertainty for your family during an already difficult time.

Another important aspect of estate planning is the ability to plan for incapacity. A comprehensive estate plan includes documents such as a durable power of attorney and a healthcare proxy, which allow you to appoint someone to make financial and medical decisions on your behalf if you become incapacitated. By having these documents in place, you and your Dade and Broward probate attorney can ensure that your wishes are respected, even if you are unable to communicate them yourself.

Understanding the Components of an Estate Plan

Before diving into the process of getting your estate plan ready for the new year, it's always a good thing to consider the assistance of a trusted estate planning attorney to help you navigate through all of your options. It's important to understand the various components that make up an estate plan. While the specific documents and strategies may vary depending on your individual circumstances, there are a few key elements that are typically included in an estate plan.

The first component is a will, which is a legal document that outlines your wishes regarding the distribution of your assets after your death. A will allows you to name an executor, who will be responsible for carrying out your wishes, and specify how your assets should be divided among your beneficiaries. It's important to regularly review and update your will to ensure it accurately reflects your current wishes and circumstances. A probate law attorney can help you to create a will that covers the important legalities that apply to Florida.

In addition to a will, many estate plans also include one or more trusts. This is an aspect that an experienced Florida probate attorney help make clear. A trust is a legal arrangement that allows a third party, known as a trustee, to hold assets on behalf of beneficiaries. There are several different types of trusts, each serving a specific purpose. For example, a revocable living trust allows you to maintain control over your assets during your lifetime and specify how they should be managed after your death. On the other hand, an irrevocable trust cannot be changed or revoked once it is established and is often used for tax planning purposes.

Reviewing Your Current Estate Plan

Now that you have a better understanding of the components of an estate plan, it's time to review your current plan, if you have one. Even if you have already created an estate plan, it's important to consult with a Florida probate law attorney and regularly review and update the plan to ensure it still aligns with your wishes and meets your current needs.

Start by gathering all your estate planning documents, including your will, trusts, powers of attorney, and healthcare directives. Review each document carefully to ensure that the information is accurate and up to date. Pay close attention to the beneficiaries listed on your accounts and insurance policies, as well as the individuals named as executors or trustees.

If you have experienced any major life changes since creating your estate plan, such as getting married or divorced, having children, or the death of a loved one, it's important to update your plan accordingly. These life events can significantly impact your estate planning needs and may require adjustments to your beneficiaries, guardians for minor children, or even the structure of your trusts.

Updating Beneficiary Designations

As part of your estate plan review, it's essential to update your beneficiary designations on your various accounts and insurance policies. Many assets, such as retirement accounts, life insurance policies, and payable-on-death bank accounts, allow you to name beneficiaries who will receive the assets directly upon your death, bypassing the probate litigation process.

Take the time to review and update the beneficiaries listed on these accounts to ensure they align with your current wishes. It's not uncommon for individuals to forget to update their beneficiaries after major life events, leading to unintended consequences. By regularly reviewing and updating your beneficiary designations, you and your Miami probate attorney can ensure that your assets are distributed in accordance with your wishes.

Assessing Your Assets and Liabilities

Another important step in getting your estate plan ready for the new year is to assess your assets and liabilities. Take inventory of all your assets, including real estate, investments, bank accounts, retirement accounts, and personal property. Determine the approximate value of each asset and consider how you would like them to be distributed.

At the same time, it's important to consider any outstanding liabilities that may impact your estate. This can include mortgages, credit card debt, student loans, and any other debts you may have. By understanding your assets and liabilities, you can make informed decisions about how to distribute your assets and ensure that any outstanding debts are taken care of.

Considering Changes in Your Family Situation

Family dynamics can change over time, which is why it's crucial to consider any changes in your family situation when reviewing your estate plan on your own, (or with a trusted probate law attorney. This can include births, deaths, marriages, divorces, and estrangements. These changes can have a significant impact on your estate planning needs and may require adjustments to your beneficiaries, guardians for minor children, or even the structure of your trusts.

If you have had children since creating your estate plan, it's important to name a guardian who will be responsible for their care in the event of your passing. This decision should not be taken lightly, as it will have a long-lasting impact on your children's lives. Take the time to carefully consider who would be the best fit for this role and discuss your wishes with the individual(s) you have in mind.

Planning for Tax Implications

When reviewing your estate plan, it's essential to consider the potential tax implications of your decisions. Depending on the size of your estate, you may be subject to federal and state estate taxes. Fortunately, there are several strategies available to help minimize your tax liability and maximize the amount of wealth you pass on to your loved ones.

One common strategy is to make use of annual gifting allowances. The IRS allows you to gift a certain amount of money each year to an individual without incurring gift taxes. By taking advantage of this annual exclusion, you can transfer wealth to your loved ones while reducing the size of your taxable estate.

Another strategy is to establish a trust, such as a bypass trust or a qualified personal residence trust, which can help reduce your estate tax liability. These trusts are designed to remove assets from your taxable estate, allowing you to pass them on to your beneficiaries free of estate taxes.

Seeking Professional Advice for Estate Planning

Estate planning can be a complex and nuanced process, which is why it's important to seek professional advice from an estate planning attorney or a financial advisor who specializes in estate planning. These professionals can help you navigate the intricacies of the law and ensure that your estate plan is tailored to your unique needs and circumstances.

When choosing a Florida estate planning professional, it's important to do your due diligence and select someone with experience and expertise in the field. Look for individuals who are certified or have advanced training in estate planning, such as Certified Financial Planners (CFP) or Certified Trust and Estate Planners (CTEP). With over 30 years experience in probate administration and litigation, Miami probate attorney Olivia S. Benson sis known to serve Florida residents with knowledge, compassion, and reliability. Additionally, consider seeking recommendations from friends, family, or trusted advisors who have gone through the estate planning process.

Organizing Your Estate Planning Documents

Once you have reviewed and updated your estate plan, it's important to keep your documents organized and easily accessible. Make sure your loved ones know where to find your estate planning documents in the event of your passing or incapacity.

Consider creating a digital or physical estate planning binder that includes copies of all your important documents, such as your will, trusts, powers of attorney, healthcare directives, and beneficiary designations. Store this binder in a safe and secure location, and let your loved ones know where to find it.

In addition to organizing your estate planning documents, it's also a good idea to create a list of your digital assets, such as online accounts, social media profiles, and cryptocurrency holdings. Include usernames and passwords, and consider designating a digital executor who can access and manage these accounts on your behalf.

Conclusion

As we enter the new year, don't forget to prioritize your estate plan. By taking the time to review and update your documents, you can ensure that your wishes are accurately reflected and minimize any potential complications or disputes down the line. From updating beneficiaries and asset ownership to revisiting your will and trusts, there are several crucial components to consider. Seek professional advice, stay organized, and make sure your loved ones know where to find your estate planning documents. By finally getting your estate plan ready this year, you can have peace of mind knowing that your assets and loved ones are protected for the future.

Olivia S. Benson is a probate and trust administration attorney working with families, individuals, and legal professionals in the state of Florida. For a free 15 minute consultation about your estate planning, call: (786) 245-7746.