What are the benefits of estate planning?

In 1998, at the age of 62, Salvatore Phillip “Sonny” Bono passed away due to injuries sustained in a skiing accident. He did not leave behind a will, which caused lengthy legal proceedings as his wife, Mary Bono, and his four children from three marriages attempted to settle his estate and divide his remaining assets. It can sometimes take years of multiple court hearings to determine the proper line of inheritance when an individual passes away without a will in place.

Estate planning

Estate planning is important for many reasons, but, most importantly, it assures that your wishes are carried out if you become incapacitated or if you die. It will provide provisions to limit the stress of making tough decisions during your family’s time of grief. Such planning will also allow you to create a durable power of attorney, a person you trust to handle your affairs. You can make specific guidelines stating what your representative can and cannot do. Another option you will have is to create a medical power of attorney, which authorizes a person of your choice to make medical decisions on your behalf.

The danger of not granting power of attorney is that it leaves your loved ones unable to act until they receive a court-appointed guardian. In addition to setting up power of attorney, estate planning also includes the creation of a last will and testament, estate tax planning, as well as designating a guardian and forming a trust for your minor children.

Probate

Probate is a court process in which the deceased person’s (decedent’s) assets are identified, any remaining debts are paid, and the rest of the assets are then distributed to the decedent’s beneficiaries. Probate is necessary regardless of whether the decedent has a will. If there is no will, probate is required to make sure the decedent’s assets are transferred to those determined by Florida succession laws to be the beneficiaries. If there is a will, probate ensures that the decedent’s financial affairs are completed, such as debts being paid, before the distribution of property.

Either way, probate can be a lengthy court process. Fortunately, the difficulty of the process can be managed with proper estate planning. Having certain devices in place such as a living trust, pay on death accounts, or a life insurance policy with a named beneficiary will allow your loved ones to directly receive these assets without passing through probate.

It is important that you prepare accordingly in order to protect your assets and your family. An estate planning attorney can help you determine how best to handle your property.

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