Estate planning is something that everyone needs to engage in, yet most people know very little about. This goes a long way in explaining why over half of all Americans do not have an estate plan in place despite acknowledging that they are aware of the need to have one. Although basic estate planning concepts are fairly easy to understand, many of the strategies and tools used in a more complex estate plan can be difficult to understand at first. Just trying to decide which of those concepts and strategies to use in your plan can be challenging for the uninitiated. Learning more about your own estate plan, and the individual components of the plan, is a good way to make the whole process less intimidating. For example, how do estate planning lawyers decide what components should be included in a plan?
The Importance of Comprehensive Estate Planning
If you are like most people, your initial estate plan will likely include your Last Will and Testament – and nothing more. A Will frequently serves as the foundation of an estate plan because it can accomplish the distribution of estate assets in a simple and straightforward manner. When you are young and without a large estate or family to consider, your primary estate planning concern is usually to avoid dying intestate (without a Will) because that would result in the State of Florida deciding how your assets are distributed in the event of your death. As your estate, and your family, grows though, you will find that you have additional estate planning concerns that will require a more comprehensive estate plan to address. This is one of the many reasons why it is so important to review and revise your estate plan every few years.
Choosing Components for Your Estate Plan
A comprehensive estate plan will have several distinct components. How many components are in your plan, and which components they are, will be decided after consulting with your estate planning attorney. Some of the factors to take into consideration when choosing components for your estate plan include:
- Your family makeup – if you have a spouse, and particularly if you are a parent, the manner in which your estate plan is approached will be different than when you were single and without children. Probate avoidance, incapacity planning, and a trust are three common additions when you have a family. Probate avoidance becomes important to ensure that your spouse has immediate access to assets for financial support in the event of your untimely death. A trust is necessary to protect your child’s inheritance because a minor cannot inherit directly from your estate. Incapacity planning is needed to ensure that your spouse has the legal authority to control your assets and make decisions for you in the event of your incapacity – or to specifically prevent your spouse from having that control and authority.
- The value and complexity of your assets – the more valuable and complex your assets, the more complicated and complex your estate plan needs to be as a general rule. If your estate is likely to incur federal and/or state gift and estate taxes, for example, you will need to focus on tax avoidance within your plan.
- Your age – as you age, it becomes more important to add certain components to your plan. For example, retirement planning should be included by the time you are in your early 30s. Medicaid planning is usually added to a comprehensive estate plan as early on as possible, but certainly by the time you each your 50s. Funeral and burial planning is a wise addition at any age; however, it obviously becomes more important with age.
- Your gifting intentions – do you want to give everything to your spouse who will then leave everything to your kids? If so, reciprocal Wills are probably your best bet. If you want to stagger the inheritance you leave your children, a trust and a Pour Over Will should suffice. If, however, you want to leave gifts to charity, protect gifts made to a spendthrift beneficiary, or pass assets down to grandchildren, your plan becomes a bit more complex and will likely involve the addition of a
Contact Estate Planning Lawyers
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the components you choose for your estate plan, contact the experienced Florida estate planning lawyers at Kulas Law Group by calling (772) 398-0720 to schedule an appointment.