Estate planning and probate incorporates the protection of you, your family, and your assets. The goal of estate planning is to keep you in control as much as possible by detailing your wishes and goals, planning for your incapacity, and providing for your assets to pass to your loved ones as you wish. The need for estate planning can be a very difficult subject to discuss with loved ones. The Conversation Project is an excellent source for suggestions about how to approach the topic.
Estate planning commonly includes incapacity planning, pet planning, special needs planning, legacy planning, bloodline protection planning, asset protection planning, charitable planning, remarriage protection planning, and tax planning. An additional common estate planning goal is to avoid probate. If your estate plan doesn’t avoid probate, this court supervised process is used to validate your will, pay your creditors, settle your estate, and pass assets to your loved ones either by your will’s direction, or, if you don’t have a will, by Florida state intestacy laws. Thanks to the favorable estate and gift tax rates and exemptions introduced by the American Tax Relief Act of 2012, also known as the Fiscal Cliff Deal, you still have an exceptional opportunity to preserve more of your estate wealth and reduce estate taxes.
The new tax rates and exemptions, combined with lower asset valuations so prevalent in our economy, offer significant estate planning opportunities for taxpayers. It’s important to evaluate your estate strategy and make potential updates to your plan in a timely manner, though, as further tax law changes and restrictions on certain estate planning techniques could occur in Congress. In addition to taxes, family issues, fairness, asset protection, and effective wealth transfer also factor heavily into your estate planning decisions.
Consider— What is your future estate tax liability and how it will be funded? Are you confident your estate planning goals will be accomplished with the current documents in place? Will estate taxes or inheritance taxes affect the structure of your current investments? How should a family with international connections approach estate planning? If your estate plan fails to adequately address these issues, you run the risk of missed opportunities to reduce estate tax, to avoid unintended distribution of assets, or disputes. The key is having the right estate planning strategy in place.