Overrated Estate Planning Strategies in St. Petersburg

Many estate planning strategies in St. Petersburg are overrated, such as ILITs, IAPTs, and POD accounts. As an individual approaching Wills, trusts, and other options for the first time, it might be difficult to discern whether certain strategies are effective or even necessary. How do you determine whether an estate planning lawyer is trying to sell you an overrated or redundant strategy? Check this list for a few easy pointers:

Jointly Titled Assets

One of the most ineffective strategies is an overreliance on the right of survivorship. This right applies to all jointly titled assets, allowing the survivor (such as your child) to seamlessly inherit without going through probate.

The problem is that there are many other ways to accomplish probate avoidance without putting your beneficiaries on the title of your assets. These options are almost always better, since adding beneficiaries to the title opens you up to a host of potential problems. With your beneficiaries on the title while you are still alive, they could potentially control your assets. If they go into debt, their creditors may also access your assets for payment.

Federal Estate Tax Avoidance Strategies

Many outdated estate planning strategies focus on avoiding federal estate taxes. With current exemption rates, only a tiny fraction of Florida families will need to worry about this issue. According to current estimates, as little as 0.1 percent of residents will be affected by federal estate taxes in Florida. This is because the current exemption is $30 million for a married couple. Many options, including Irrevocable Life Insurance Trusts (ILITs) focus on federal estate tax planning and are therefore ineffective for most Florida families. 

Maxing Out POD Accounts 

POD accounts can be incredibly effective, but families tend to over-rely on them. While POD accounts skip probate, they are simple tools that offer no nuance or personalization. Often, families benefit more from trusts, which can be much more flexible.

For example, a trust might feature a spendthrift provision, preventing a young beneficiary from blowing their inheritance on frivolous spending within a few short years. POD accounts may also take precedence over your Will, which may cause issues if the two estate planning strategies do not align.

Overly Complex Estate Planning Strategies That Protect Your Homestead

Florida has some of the strongest homestead protections in the country. As a result, many estate planning strategies that focus on protecting the homestead are unnecessary, since these protections are already built into Florida law.

These unnecessary estate planning strategies may be particularly common among out-of-state arrivals to Florida, as these individuals may be unaware of Florida’s different approach. One example of a potentially unnecessary strategy that protects the homestead is placing your personal residence in an Irrevocable Asset Protection Trust (IAPT). 

Can an Estate Planning Lawyer in St. Petersburg Help Me?

One of the most important steps in the estate planning process is choosing the right lawyer. If you work with a lawyer you trust, you’ll benefit from personalized guidance on only the strategies that are completely necessary for your specific needs. Learn more by contacting the St. Petersburg estate planning lawyers at Drude Tomori Law. We serve residents of St. Petersburg, Bradenton, Lakewood Ranch, and Sarasota.

Source:

irs.gov/businesses/small-businesses-self-employed/estate-tax