An estate plan is not just for the wealthy. Everyone should have an effective plan. Effective estate planning must consider many things and the plan must “dovetail” together. What happens at death; burial or cremation, disposition of assets, who will be the personal representative? Is a trust needed? Tax issues should also be considered. What happens if there is a disability or other medical issue, incapacity issues, long-term care, and nursing home costs? Assets protection planning may be critical. Many rationalize that they are too young or don’t have enough money to worry about a plan. Think about the following…
Death without a will or trust: Who will inherit your assets if you have not prepared a will or trust for ultimate disposition. Without a plan, your assets will pass to your heirs according to the laws of intestate succession. Your family will (and it maybe not be the ones you desire) will receive your assets without benefit of your direction or of trust protection. You can decide who gets your assets, and when and how they receive them.
Special Needs beneficiaries. A child with special needs may risk being disqualified from receiving government benefits upon receipt of an inheritance, and may have to use his or her inheritance to pay for care. A Supplemental Needs Trust may allow the child to remain eligible for government benefits while using what you leave in a special needs trust to pay for extraordinary expenses.
Incapacity. What if you or your spouse becomes incompetent and unable to manage your own affairs? Without a plan the courts will select the person to manage your affairs. With a plan, you may pick that person with a preneed guardian declaration. A Trust or a Power Of Attorney and/or a Health Aare Surrogate Declaration may avoid a guardianship.
Minor Children. Who will care for your children if both of his or her parents die? Without a plan, a court will likely make that decision and it may involve costly litigation. You may nominate the guardian of your choice if you plan right.
Asset Control. The use of a Trust (revocable or irrevocable; or testamentary) may keep assets inside the family. Without a plan, your child’s spouse may wind up with your hard earned assets. If your child divorces after your death, half of your assets could go to your in-laws. You can establish a trust that ensures that your assets will stay in your family; passing to your grandchildren or even your great grandchildren.
Financial security. Will your spouse or other dependents be able to get by financially at your death or disability. Without a plan the income required to replace your lost earning ability can be devastating. Life insurance and disability insurance are critical to an effective plan.
Retirement accounts. If you have an IRA or similar retirement account you should plan on what happens to those assets at your death. Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes and may result in significant tax liabilities for your beneficiaries. With a plan, you can choose the best beneficiary; maybe even a trustee for your beneficiary.
Business ownership succession planning. Without a plan your business’s value may be lost to a partner or co-owner. Be sure there is some buyout agreement or other succession plan in place.
Mark E. Clements, the founding member of the firm, has over 35 years of experience in the areas of estate planning, wills and trusts, tax planning, probate and guardianship, public benefits and long term care planning. He has extensive experience in helping families plan for the long-term care for a loved one through asset protection. Mark has represented hundreds of Florida seniors in qualifying for Medicaid benefits for long-term care. Mark is certified as an Elder Law Attorney by the National Elder Law Foundation, and is an accredited VA attorney. Mark was admitted to the Florida Bar in 1979 and is a member of the Elder Law Section and the Wills, Estates, and Probate Section of the Florida Bar. He is a member of the National Academy of Elder Law Attorneys and a member of the Academy of VA Pension Planners.