When it comes to Estate Planning in Florida, don’t get thrown off by the word “Estate.” It doesn’t matter if you have a house with a long driveway or if you live in a double-wide trailer. What you own, what you owe, and what you pass on to others is known as your Estate.
There should be no doubt about it! Estate planning is important because it helps you plan for the distribution of your assets and property after you pass away. For instance, Florida does not have a state estate tax. This can be a substantial advantage in preserving your estate for your beneficiaries (and perhaps the reason why many move down here to retire!). Here are some key considerations for estate planning in Florida:
What You Should Consider In Your Florida Estate Plan
Estate Inventory: Start by creating a comprehensive inventory of all assets and liabilities. For example, real estate, personal property, bank accounts, stocks, bonds, retirement accounts, and any other assets. This inventory will also come in handy for insurance purposes in the case of a hurricane (plenty of those here in the Sunshine State!), fire, or any other natural disaster.
Goals and Objectives: Identify the goals and objectives you want to achieve through estate planning. These can include ensuring the financial security of loved ones, minimizing taxes and other expenses, and supporting charitable causes.
Beneficiaries: Decide who you want to receive your assets and in what proportions. This will help you determine who should receive your assets in the event of your death.
Essential Estate Planning Documents for Florida Residents
Estate Taxes: Florida has no state estate tax, but federal taxes can still reduce your estate’s value significantly. The TCJA will expire at the end of 2025. This will revert lifetime tax exemption limits to pre-2018 levels, or about 50% of current limits. It’s time to start planning today!
Will: A Will is a legally binding document that outlines how the state will distribute your assets after your death. Consider having an attorney prepare your will to ensure proper execution and that it meets all legal requirements.
Trusts: A trust offers many benefits, including tax reduction, probate avoidance, asset protection, and customized asset distribution to your beneficiaries.
Durable Power of Attorney: A durable power of attorney allows you to appoint someone to handle your financial and legal affairs if you become unable to do so.
Health Care Directive: A health care directive, also known as a living will, outlines your wishes regarding medical treatment. It allows you to appoint a Health Care Surrogate to handle your healthcare and end-of-life decisions if you become unable to make decisions for yourself.
Life Insurance: Life insurance can provide financial security for your loved ones and help pay for expenses such as funeral costs and estate taxes.
Review and Update: You should review and update your estate plans every 3-5 years. This reflects changes in your life, such as the birth of a child, the death of a spouse, or changes in your financial situation.
Given the complexity of these matters and the specific considerations for Florida residents, consult with an estate planning attorney. An attorney can help you create an estate plan that meets YOUR specific needs and goals.
