Florida residents who do not already have a trust fund or a will may want to start exploring their estate planning options. Estate planning can include naming a guardian to care for young children if both parents pass away, and it can also name someone to take care of a person’s financial or medical decisions if the person becomes incapacitated.
Naming a power of attorney
The designation that allows someone to make decisions on your behalf is called a power of attorney. You can give someone power of attorney over end-of-life decisions, such as whether to keep you alive if you are in a certain medical state. You could also have someone manage your finances in the event that you become mentally incapable of doing so, which can help prevent someone from taking advantage of you in a vulnerable state.
Depending on what type of estate plan you create, there can be certain tax and other cost-saving benefits for you or your heirs. Some types of trust funds can lower the taxes you pay on property while you are alive, whereas others can reduce the taxes that your beneficiaries will pay when they inherit your property. Similarly, some types of trust funds can help you avoid going through probate, which can be expensive and time consuming. Before speaking with a professional, give some thought to what your goals are in creating an estate plan.
Accounts with designated beneficiaries
If you have a 401(k) through your job, you may recall being asked to name a beneficiary to inherit your retirement account if you pass away. When someone is named as a beneficiary on certain accounts, like 401(k)s, the 401(k) beneficiary designation will trump whatever is in your will or trust. Before speaking with an estate planning attorney, you should make a list of all assets you own, debts you owe, and accounts you hold, including investment and savings accounts. By keeping your information and documents together, it can help avoid confusion when you do create a will or trust.