Components of an Estate Plan

It is a common misconception that having a will is enough because there is much more to having a good estate plan. An excellent estate plan will be designed to avoid probate and guardianship proceedings, save on estate taxes, protect your assets should you move into a nursing home, and it will appoint someone you trust to manage your assets should you become disabled or incapacitated.

An estate plan is the foundation for any financial plan. In order to prepare for any type of situation you will need to establish several important documents, and together these documents will make up an estate plan. By getting these documents together, they can save you and your loved ones a significant amount of time and money and they will give you peace of mind.

Living Wills

While we may plan to live a long time, one never knows when an accident or an unexpected health crisis will happen, either of which might leave one permanently incapacitated. Your living will clearly explains what you want to have happen to your body should you be kept alive on life support. If you don't think ahead and make this decision for yourself, you will leave your loved ones with making this excruciating decision for you.

The living will works with other advanced medical directives, such as medical powers of attorney, which authorizes the named party to make medical decisions for you providing you aren't capable of doing so. While married couples may need these documents less, it's still better to be on the safe side and get these documents out of the way. For a single person, having a power of attorney for your health care is absolutely necessary.

Powers of Attorney

It is a wise idea to arrange a power of attorney, this way if something happens to you and you become incapacitated, someone else can act on your behalf with regard to your financial affairs until you are restored to health. In this day and age where people are living longer but with diminishing capacity, powers of attorney are critical estate planning tools designed to facilitate the handling of your affairs by those you trust without the need for costly Court supervision. While doctors turn to spouses and family regarding medical decisions, financial institutions generally require durable powers of attorney. A durable power of attorney will allow someone you trust to make financial decisions for you and it will allow them to control your assets outside of any trusts that you created and free of any Court process such as guardianship.

Wills

In most cases a Will is a desirable tool of effective estate planning. The last will and testament appoints a personal representative or an executor to administer your estate. The will specifically controls the distribution of your tangible, intangible, and real estate assets that are not already beneficiary designated, and it outlines who will receive these items. Wills are essential for couples who have children under the age of eighteen since wills appoint a recommendation for guardianship of your children.

Wills also control the disbursement of retirement plans or assets, annuities and life insurance policies unless you arrange with the financial institutions holding these assets to designate beneficiaries upon your death.

Trusts

Unless someone plans ahead and moves ownership of their property to a living trust, even people with seemingly small estates can be subject to probate and its associated costs. If you think you don't have enough money to worry about probate, think again. Once you factor in your home, cash accounts, investment accounts, retirement plans and life insurance and add it all up, you get a substantial sum. Setting up a trust can not only help avoid the drawn out probate process and its costs, it allows for more control and protection over your heirs' inheritance. When you establish a revocable living trust which terminates when you die, the property in that trust will automatically pass to your beneficiaries, thus saving them time and money, and it avoids the need for a costly and time-consuming Court Probate. And of course, the added beauty to a Trust is that while you are alive, you and you alone own and control the Trust and all assets placed in the Trust.

Pembroke Pines Estate Planning Attorney

Drafting a sound and effective estate plan is absolutely essential for everyone. At my firm, the Law Office of Steven Friedman, I can help you gather all the necessary components of a powerful and effective estate plan. With over 40 years' experience in estate planning, probate and probate litigation, I will be able to help you create a simple and effective wealth protection and distribution plan that is tailored to your unique situation.