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What is an estate plan?

On Behalf of | Mar 17, 2023 | Estate Planning

When Florida residents put estate plans into place, they take steps to protect their wealth while they are still alive and ensure that their assets are distributed according to their wishes after they pass away. A properly designed estate plan can reduce or eliminate estate taxes, prevent disputes among heirs and appoint responsible individuals to make important financial and medical conditions in the event of incapacity.

Estate planning documents

An estate plan should be tailored to an individual’s needs and goals. Common estate planning documents include a last will and testament, a power of attorney, a living will or medical directive and a life insurance policy. A power of attorney designates a responsible individual to make financial decisions, and a living will or health care directive appoints a trusted person to make medical decisions or ensures that medical wishes are followed. These documents should be revisited on a regular basis and revised when situations change.

Trusts and probate

Most estates go through the probate process after an individual dies even if they have estate planning documents in place. During probate, the will is validated, the estates debts are settled and assets are distributed to heirs in accordance with the decedent’s wishes. This is a public process that can take weeks or even months to complete, which is why many Florida residents include trusts in their estate plans to avoid it. When assets are placed in trusts, they are not subject to probate because they are no longer owned by the grantor.

The benefits of an estate plan

Enjoying the peace of mind that comes with knowing that difficult matters have been attended to is the main benefit of having an estate plan. People with estate plans in place no longer have to worry about how their loved ones will be taken care of after they pass away, which means they can focus on enjoying the time they have left to the fullest.