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4 More Things You Need to Know About Estate Planning

4 Things You Need to Know About Estate Planning

What Is An Estate Plan?

An estate plan is a set of legal documents created by a lawyer for a client in which the individual designates who should inherit their assets, how, and when. A typical estate plan will include at least three documents. First, an advanced directive that includes a living will and a designation of health care surrogate. Second, a durable general power of attorney. Third, a will. Some individuals have two other documents as part of their state plan. First, a revocable living trust, and second a beneficiary designation.

Do I need to be wealthy to have an estate plan?

An individual does not need to be wealthy to have an estate plan. Everyone should have an estate plan because we never know when we might become incapacitated. So, it’s not just about when we die. For instance, if I became incapacitated, who would make business and financial decisions for me? Who would make medical decisions and speak to the doctors? Those are very important decisions that have nothing to do with how wealthy I am.

What is an advanced directive?

An advanced directive is a document in which an individual designates someone to make medical decisions for them if they're unable. Everyone needs an advanced directive. This includes 2 components; first a designation of a health care surrogate and second, a living will.

What is a durable power of attorney?

A durable general power of attorney is a document in which an individual designates someone to make business and financial decisions for them, everyone should have a durable general power of attorney.

Below are four more things you need to know about estate planning in Naples, Florida from top estate planning attorney James Nici.

Do I Need to Update My Estate Plan After Moving to Florida?

If you move to Naples, you should have an attorney licensed in Florida review your estate plan and update the plan if needed. Each state has its own laws relating to estate planning. When you have documents that you created to comply with the laws in another state, there is a possibility that all or parts of your estate plan are invalid. Your attorney may need to redo the entire document or add an amendment.

For example, you may need to update your personal representative (sometimes called “the executor”). Florida has a law that requires the personal representative of your estate to be either a Florida resident or related to you. If you named a friend who is not a Florida resident, they would not qualify, and the court may appoint someone you do not want. Furthermore, Florida has unique and strict homestead laws. In Florida, if you are married, you can only lead your homestead (primary residence) to your spouse. If you state otherwise in your will or trust, Florida law overrides your wishes and creates a life estate for the surviving spouse.

How Do I Establish Florida Domicile?

Being a Florida resident has unique benefits, including friendly tax and asset protection laws. For many individuals, there is a significant financial incentive to establish a Florida domicile. There is no one step to take to become a Florida resident automatically. Instead, to establish a Florida domicile, you must have the intent to make Florida your primary residence. Florida courts will consider various factors when making this determination, including:

  • Residing more than half of the year in Florida;
  • Having a Florida driver’s license;
  • Registering to vote in Florida;
  • Applying for Florida homestead property tax exemption;
  • Transferring bank accounts to Florida;
  • Use your Florida address when filing tax returns; and
  • Filing a declaration of domicile affidavit in the court that you reside.

In addition, it is important to let the state you have left know that you are no longer a resident.

Does it Matter How My Assets are Titled?

It is critical that you title your assets properly and they coordinate with your estate plan. In Florida, you can title property in your individual name, in joint names with other owners, or by contract. How you title an asset affects who controls the property, taxes, asset protection, whether the property needs to pass through probate, and who receives the property after you pass away.

Carefully drafting a will does not automatically mean that your property will be distributed in the way that you outlined. For example, one way to title property is in joint tenancy with rights of survivorship. Each party has an equal right to the property. When one owner passes away, the surviving owner automatically assumes full ownership over the property, regardless of what is written in a will. The property does not pass through probate. A downside of joint tenancy is that there is no asset protection. Creditors can seize an owner’s interest in a property during his life unless it is homesteaded. A qualified Naples estate planning attorney can ensure that your assets are titled correctly.

How Important Are My Beneficiary Designations?

Making and updating beneficiary designations is essential to estate planning in Naples. Beneficiary designations allow assets to pass directly to the named beneficiary at your death. Various assets can have beneficiary designations, including life insurance policies, annuities, retirement accounts, and investment accounts.

It is critical that your beneficiary designations are coordinated with the rest of your estate plan because they supersede the instructions in your will or trust. For example, if you leave your entire estate to your three children in your will but your life insurance policy still lists your ex-spouse as the beneficiary. The funds will go to your ex-spouse. If a beneficiary has predeceased you, the asset will pass to your estate, where it will be subject to probate. Beneficiary designations should be reviewed and updated annually and after major life events (marriage, divorce, birth, death, etc.)

Call Naples Estate Planning Lawyer James Nici

If you want to learn more about estate planning, you should contact Nici Law Firm. James R. Nici is an experienced Naples attorney with over 25 years of experience. Contact our office today at (239) 449-6150 or use our web form to set up a free consultation.

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