What is the Estate Planning Process?

The percentage of Americans who go through the estate planning process has plummeted in recent years, all the way down to 26 percent. The reasons for the sharp decline are unclear. Most likely, however, people don’t believe they have sufficient assets to protect and believe the estate planning process is too complicated to undertake.

However, most people have a substantial amount of assets. A house, car, and basic personal property could easily be worth more than a half-million dollars, at the minimum.

Furthermore, many people overstate the complexity of the estate planning process and underestimate what the lack of an estate plan means for their heirs. In as little as one office visit, a St. Petersburg estate planning lawyer can put a basic plan together. Then, working as partners, attorney and client expand that plan later. Furthermore, if a person dies intestate (without a will), government bureaucrats have total control of the estate distribution process. That’s not a pretty picture.

Determine Assets and Liabilities

A comprehensive inventory of all assets, including real estate, bank accounts, investment portfolios, retirement savings, life insurance, business interests, and personal property (e.g. jewelry and artwork), is the first step in the estate planning process.

Accounting for all outstanding debts and other liabilities is just as important. An estate administrator must settle all these accounts before assets can be distributed to heirs.

Lay Out Objectives

The estate planning process gives people the chance to outline the purpose of that estate plan. Many people want to ensure that spouses and/or children are financially secure. Other individuals want to make specific bequests to certain individuals. Still others have charitable interests they wish to support after they die.

A St. Petersburg estate planning lawyer presents multiple options in all these situations, so estate planners can pick the one that best suits them.

Draft and Execute Key Estate Planning Documents

Estate planning documents in writing and properly executed help ensure that everyone is on the same page. These documents include:

• Will: This legal document outlines general asset distribution post mortem. Wills also appoint guardians for minor children and specify funeral arrangements. For these and other reasons, wills are essential, and they must be executed properly according to local laws.
• Trust: A settlor (person who makes a trust) designates another party (trustee) to hold and manage assets for the benefit of another (beneficiary). To further streamline this process, the settlor and trustee are usually the same person. Most trusts are revocable living trusts, which allow ongoing control. Then, after the settlor’s death, RLTs avoid the probate process, ensuring a faster and more private transfer of assets.
• Durable Power of Attorney: A POA designates a trusted and qualified individual to make financial decisions on the maker’s behalf if s/he becomes incapacitated. A durable POA remains in effect even if the maker loses mental capacity.
• Healthcare Directive: Also known as a living will, this document outlines wishes regarding medical treatment if the maker is unable to communicate them. Most living wills include instructions on life support, organ donation, and other critical care decisions.
• Beneficiary Designations: Certain assets, like life insurance policies, retirement accounts, and some bank accounts, include designated beneficiaries. These designations typically override instructions in a will, so it’s essential to keep them up-to-date. More on that below.

Regarding execution, Florida laws are very specific. Do-it-yourself forms downloaded from the internet often aren’t worth the paper they’re printed on, because of a technical error during execution.

Ongoing Reviews and Updates

Life circumstances change over time, such as marriage, divorce, the birth of children, or significant changes in financial status. Only regularly reviewing and updating an estate plan ensures it reflects the maker’s current situation and wishes.

Contact a Thorough Sarasota County Lawyer

The essential estate planning process isn’t as complicated as many people believe it is. For a confidential consultation with an experienced estate planning lawyer in Sarasota, contact Drude Tomori Law. After-hours visits are available.

Source:

thinkadvisor.com/2024/04/23/only-26-of-americans-have-an-estate-plan/