What to consider when creating an estate plan

Whether you live in Florida or any other state, it is important to have an estate plan in place. The first steps in the estate planning process involve gathering documents and determining what your plan needs to accomplish. Lawyers can help you create a will, trust or other plan document.

The difference between revocable and irrevocable trusts

A living trust can help you plan for events that may occur during your lifetime and after you die. In most cases, you can be both the trustee and the beneficiary of a revocable trust. Assets in a trust do typically bypass probate after you die, but you don’t obtain any immediate tax benefits from a living trust.

Your children or grandchildren typically have control over assets in an irrevocable trust. While you no longer own those assets, they typically cannot be seized by creditors or claimed in a divorce settlement. Furthermore, income generated by the trust is typically taxed at a lower rate.

Proper planning could help save money

In most cases, your estate will need to pay estate taxes owed within nine months of your death. It is important to note the first $11.58 million is assets are exempt from taxation, and only 1,900 families owed any federal estate tax in 2018. Assets held in a trust are generally considered to be outside of the estate, which means that they don’t count for estate tax purposes.

The probate process can take months to years to get through, and it can cost up to 10% of an estate’s total value. Bypassing probate generally means that beneficiaries get their assets faster, and they will get more of what was left for them because there will be no need to pay probate expenses.

Regardless of where a person is in the estate planning process, it may be a good idea to go through it with the help of an attorney. Legal counsel may help create documents, help alter them or help review documents that currently exist.

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