Why is estate planning an important part of planning for my retirement?
As you approach your retirement years, you will likely be inundated by financial planning. Retirement planning involves putting in place the investments and health insurance you will need to maintain your financialwellbeing during retirement. Estate planning, on the other hand, involves having a plan in place that will help your heirs to retain as much as your assets as possible upon your death. While the two concepts are different, they are also interrelated. As you get your finances in order to retire, now is the perfect time to also initiate your Florida estate plan.
Estate Planning Basics for Those Approaching Retirement
Even if you have established a perfect portfolio of investments to provide for you during your retirement, you must still plan for the possibility of your eventual mental incapacity or death. A lack of prior estate planning could leave your heirs trapped in time consuming probate proceedings or paying significant funds in taxes. As such, if you are approaching retirement and have not yet created an estate plan, now is the time.
Your basic Florida estate plan should include the following:
- Will: With a will, you can name which of your heirs should receive what assets after your death. You can also nominate a guardian for your dependent children. A will is a critical component to most estate plans, but it also has limitations. Assets distributed in a will must still go through probate.
- Power of attorney: You should prepare for the possibility that you could one day become unable to manage your own financial and personal affairs. With a power of attorney, you can name an individual who will take over decision making authority if a court declares you incompetent.
- Trust: A comprehensive trust is an effective estate planning tool for many. Assets within a trust will pass to the trustee without the need for probate or estate taxes. Trusts further give the trustor great flexibility in the distribution of assets than a will provides.
- Healthcare proxy: A healthcare proxy names a trusted family member or friend to make medical decisions on your behalf if you are unable. Without it, confusion can arise as to your treatment in a serious situation.
For help getting started with your estate plan, contact an experienced Florida estate planning attorney in your area today. It is never too early to start estate planning, but waiting too long can have serious implications for those you love.