Today, as part of our series on basic questions about estate planning in Florida, we turn our attention to inheritance planning. The process of creating an inheritance plan is an integral part of the estate planning process, though the two terms are not synonymous. Understanding what inheritance planning is, how it works, and why it’s so important is essential if you want to get the most out of the estate planning process.
An inheritance plan is simply a collection of tools that allow you to be sure that your inheritance decisions will be legally enforceable in the future. Regardless of the kinds of property you own, or the inheritance choices you want to make, the ‘legally enforceable’ piece of the equation is what makes or breaks an effective plan.
For example, let’s say that you want to make an inheritance plan. You look at your assets, decide how you want to distribute them, and then write all your decisions down on a sheet of paper. You even go so far as to assemble your family members to tell them about your decisions and hand out copies of the paper that details your choices.
So you have an inheritance plan now, right?
Wrong. What you’ve made is a list of decisions that have no legal effect on what happens to your property after you die. The law says that capable adults have the right to choose how they want to distribute inheritances, but they must do so in specific ways. If you fail to make an inheritance plan that uses the legally recognized tools you have available, no plan will be effective.
Inheritance Planning or Estate Planning
A lot of people commonly assume that creating an estate plan is only about making inheritance choices. While inheritance planning and estate planning go hand-in-hand, it’s essential to understand that the two areas are not synonymous.
When you create a comprehensive estate plan, your plan will look at many more issues other than inheritance choices.
Inheritance Planning Options
So what does an inheritance plan look like? While no two plans are ever identical, your plan will most likely rely on a small number of key tools. The last will and testament and the revocable living trust are the most common of these tools, but others are available as well.
What’s important to remember is that your inheritance planning tools have to work in conjunction with one another. You cannot simply create a plan piecemeal and expect it to work. You have to make each of your planning devices in light of the other tools you make, and should only do so after speaking to an experienced estate planning lawyer.