Most people fail to realize that everyone has an estate, regardless of how wealthy or not one may be. This is because an estate, simply put, is a collection of everything you own.
Your estate is likely made up of the items and property you interact with daily: your car, home, investment properties, checking and savings accounts, personal possessions, furniture, and artwork, among other things.
Regardless of its size, your estate will continue to exist after you die. Thus, it is important that you begin to consider who you would like to benefit, the manner in which items would be distributed, and the timing of such distribution.
Estate planning involves making those considerations now, so that facilitating your plan – in the event of death or incapacity – is less burdensome for you and your family. Although many people tend to initiate these plans when older, these considerations should begin today.
Why estate planning is important:
Estate planning should be done by everyone. Contrary to popular belief, it is not just for the wealthy. In fact, individuals with modest assets and their heirs will arguably benefit the most from ensuring that a solid estate plan is put in place sooner rather than later. This is because poor estate planning could impose a variety of problems for your heirs including long courtroom battles, unnecessary estate tax expenses, and lost value from your assets.
Additionally, preparing an estate plan is especially important to ensure that your assets are managed and distributed the way you would like in the event of death or incapacity.
If you were to pass away without an estate plan, any assets owned by yourself and without a beneficiary designation would be distributed and managed according to your state’s intestacy laws through a probate proceeding.
In Florida, for example, a surviving spouse may or may not be entitled to the entire intestate estate if there are surviving children of the decedent. This means that your spouse may only receive a fraction of your estate, which may not be what you desired.
Similarly, without an estate plan to reference, the Court would be forced to navigate guardianship law to appoint a guardian to manage your health and finances. This individual may be chosen by you through an estate plan executed prior to any court determining your incapacity.
To avoid having such important decisions made without your input, it is vital to create a plan that honors the decisions you would like to be made after you pass away or lack capacity to manage your affairs.
How to get started:
The first and arguably most important step you can take to create an estate plan is to create a will. A will is a document that establishes how you would like your assets to be distributed after you pass away, and who you would like to name as your personal representative or executor to carry out those desired distributions. To be implemented, the document would need to be properly executed with the proper signing formalities for admission to probate court.
Since the probate process is lengthy and complex, you may consider establishing a trust to potentially avoid probate. A trust can help establish the terms of the management and distributions of assets without involving probate court. However, it is important to keep in mind that creating a trust may require greater and more complex legal guidance than a will.
It is important to establish an estate plan sooner rather than later in life. Doing so will ensure that your assets and possessions are dealt with the way you would most prefer. Additionally, creating a solid plan that honors your wishes will grant your heirs peace of mind if you are ever unable to make decisions for yourself.
Because there are a variety of options available to plan your estate, you should consult legal counsel and other appropriate experts about your estate planning needs. Reach out to our qualified estate attorneys at Mendez and Mendez Law to discuss your situation and the ways in which we can best serve your needs.