There are two main concerns when people come into my office. The first—and the thing most people should be aware of and consider—is how much of your assets each of your beneficiaries will receive. How is this going to affect their circumstances? Will it change their lifestyle or does it have the potential to change their lifestyle? Are they mature enough to handle a change like that? Are the kids, grandkids, or other family members well-suited to potentially take this large sum of money? If they are, then it becomes a little bit easier, but if they aren’t, we have to discuss what we can do to protect them from themselves.
The second concern is the tax circumstances of what you’re leaving. How will it be taxed? How will that affect the taxes of the person who is actually taking the asset? This becomes especially important when clients are looking at assets that are coming through an IRA or a Roth IRA account. People tend to have a lot of concerns about how this will affect those who will inherit from their will or trust. Is a large portion of this going to be lost due to taxes? When the person takes, are they going to be able to afford to pay all the taxes that may or may not be due on this particular gift that I’m leaving for them? No one wants to set up a potential tax trap or a tax burden for their loved ones.
Is There A Way To Protect My Beneficiaries’ Inheritance From Creditors And Predators?
There is a way to protect what your beneficiaries may inherit from creditors or bad characters who might be in their life. In many cases, this comes back to utilizing a trust to protect some assets. Asset protection due to use of a trust actually comes into play in a wide variety of circumstances. Giving up a little bit of control to the assets can certainly be a way to protect those assets legally in the long term and is something to consider.
Another thing that people might want to consider is their potential of ending up in a nursing home. Many of my clients ask about what will happen if they need to qualify for Medicaid or a nursing home bed that might be provided by the government. Is that something that I can qualify for without losing all of my assets? Again, a trust can help to do that and protect your assets in a way where you might still qualify or not have your medical creditors take all of your money. Planning ahead involves looking at very specific circumstances in great detail with the help of a lawyer.
Can I Set Up My Estate Planning Documents For A Minor Beneficiary To Receive Their Inheritance Once They Become Of Legal Age?
Your estate planning documents can be set up for minor beneficiaries to receive their inheritance once they become of legal age, meaning 18 years old. Not only can we use documents to do that, but we can also potentially set it up so that they don’t receive their assets until they maybe become even older than 18, maybe 25, 30, 35, or whatever the appropriate age that the family thinks the particular person will be able to maturely handle those types of assets when they receive them.
How Often Should People Review Or Check Up On Their Estate Planning Documents?
My belief—and what the industry typically supports—is that every two to three years is a good time to do a check up on your estate planning documents. It’s also a good idea to check up after a major life change, especially after a death, the birth of a new child, a divorce, a situation where someone’s health is drastically deteriorating, or a situation where one of your children has encountered some difficulty of their own. Let’s say one of the potential beneficiaries to inherit from the estate is struggling with a drug or alcohol problem or has been convicted and is perhaps serving time in jail or prison. Any of those circumstances would warrant a more immediate second look, as would the separation of one of your beneficiaries from their current spouse or partner, or a number of other changes that may affect them as well. Outside of those factors, if no new accounts have been added or subtracted, then every two to three years is typically sufficient.
What Are The Dangers And Pitfalls Associated With Doing Your Own Estate Planning?
The biggest danger is the unknown. When you’re working on a document on your own, you have no way of knowing whether you’ve done it right and created documents that will do what you want them to do. Your family is counting on what you’ve set up to do the job that they need, when in reality, it might not be able to perform that job at all. Then you’ve left your family potentially without any legally recognized estate planning or, at a minimum, estate planning that may not do any or all of what they anticipated it would do.
Many of the pitfalls I see when people come in asking for me to look at documents are little things: not having the proper number of witnesses, not having the right notary for the documents, not having it signed in a way that is going to be recognized as legal in Florida. A bigger issue involves the language that’s in the document, the way that it’s worded. In many cases when a family brings in something that they’ve tried to craft on their own, we find that the document does not actually do what they think it’s going to do because of the wording.
For more information on Inheritance Law in the State of FL, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (813) 922-5293 today.
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