Most people don't want to think about life after they are gone no matter which stage of life they're currently experiencing. They don't want to figure out what they have and how they should divide it between those that they love. Even if you don't have much, it is very important to start getting your estate and documents in order.
Related Blog: Frequently Asked Questions About Retirement Planning
Here are some questions that you may be having as you start thinking about the future (and the future of your family).
What exactly is an estate?
Most people have a misconception of what an estate really is. An estate that requires probate administration through the court are made up of assets titled in your name individually which do not have any pay on death beneficiary designations. If you have Florida Homestead property it does not have to go through probate and be subject to creditors.
Are most Americans ready for the future?
The truth is that fifty-five percent of Americans don't have an estate plan or any legal documents. This is a frightening fact because, without the necessary legal documents, you will have no control over what happens to your assets.
So, what types of legal documents should you have?
You should have the following legal documents (or most of them). These include:
- Last Will and Testament
- Revocable Trust, if needed
- Power of Attorney
- Living Will
- Health care surrogate
- HIPPA document about privacy
How do you know if you need a trust?
Certain circumstances are going to dictate whether you may need a trust. Below are several reasons why a trust may be useful for you and your family:
- One of your heirs is not good with money. You want to make sure that the money is available to them for a long time.
- If you have children and you want to ensure that they will have funds available for their care for years to come, you may want to consider establishing a trust to ensure it is professionally administered and managed properly.
- If you have been married more than once, it is important to determine whether you want to leave assets to your current spouse for their lifetime or until they remarry with the remainder to your children from a first marriage.
- There are certain protections a trust offers in the case of a divorce. If funds are distributed outright to your children and they money is co-mingled with the “marital funds”, your child’s spouse may be entitled to these funds.
- Many people set up trusts to protect their loved ones. If you are concerned that your family or friends (or even strangers) may try to take advantage of one of your beneficiaries, a trust is good vehicle to ensure protection of the assets.
- If your children have special needs, a trust will ensure that they still get the public benefits that they deserve. If you give them money outright, they may be denied or even lose their benefits due to having too much money.
What are some other differences between a will and a trust?
Your will won't go into effect until you pass away. A trust becomes effective right away, however during your lifetime a trust is generally for your benefit only. You will need to title your assets into your trust to ensure your wishes are carried through upon your death.
Upon your death, the funds that are held in your trust or that pass from your probate estate under your will to your trust will stay in trust for your beneficiaries.
What are some things to consider with trust?
One of the most important aspects for having a trust is naming a trustee. This is important as the individual and/or corporate trustee you name will be responsible to ensure your wishes are carried out professionally and with proper management and oversight for your loved ones.
What is a living will?
A living will is different than a will because it talks about what circumstances and heroic measures you want taken if something should happen to you. You may want to think if you want to be placed on life support if the circumstances aren't looking good.
What happens if I die without any documents?
If you die without a will or trust, it is called die intestate. This means that the courts and state will determine what happens to your estate. This can be a lengthy, expensive and frustrating process to ut your loved ones through.
Why does this matter?
Though you don't want to think about your death and your family's life without you in it, you really need to. It is helpful for them to know that your wishes are carried out, without worrying if they are doing the right thing.
Haven't gotten that far? Don't hesitate to contact us today. We will be glad to sit down with you, talk about your assets, and what your next steps should be. Having peace of mind is important to us and we you to have peace of mind.