Since Congress passed a new tax law in December, Florida residents might want to review their estate plans. The estate tax exemption for couples has doubled to $22 million, so people who previously created estate plans with an aim of avoiding taxes may no longer need those provisions. However, there are other reasons that people of all income levels should review their estate plans regularly.
An estate plan has two main functions. One is to distribute assets after death, but the other is to make plans in case an estate holder becomes incapacitated. This means a person needs powers of attorney that appoint others to make financial and medical decisions in certain circumstances. An estate holder should also review beneficiary designations to ensure that the people chosen to receive assets from retirement accounts, life insurance policies and other accounts have not changed.
People are increasingly using trusts in estate planning for a number of different reasons. Trusts can specify when and how loved ones receive assets. For example, they can be set up to care for relatives who have special needs without affecting federal assistance benefits. Trusts are also a way for people to avoid probate and pass assets directly to heirs.
Whether a person already has an existing estate plan or has completed no paperwork, an attorney may be helpful. While there are do-it-yourself estate planning templates, it’s important that the language on these documents is accurate. Another important element of creating an estate plan is communicating with loved ones. Without proper communication, some heirs may feel left out or slighted.