There are 3 Florida estate planning steps you can take now which are relatively simple and yet may prevent major estate planning complications.
3 Important Florida Estate Planning Steps to Take Now
The following 3 Florida estate planning steps you can take now are simple steps that can prevent some common estate planning pitfalls and are relatively simple:
Double check Your Beneficiary Designations On Insurance and Qualified Financial Accounts
Insurance products have beneficiary designations and by default, many people do not complete the designation form and/or the form designates “the estate” by default. Qualified Financial Accounts such as 401k, 403b and IRA accounts also have beneficiary designations and this same problem arises. When the “estate” becomes the designated beneficiary, this requires that the entire account go to the probate court rather than being immediately distributed to beneficiaries. A simple change in your beneficiary designation avoids this cumbersome and expensive process.
Utilize Transfer Upon Death (TOD) or Pay Upon Death (POD) options for Bank Accounts and other Non-Qualified Financial Accounts
Non-qualified accounts are accounts without unique tax treatment such as bank accounts (checking and savings), CDs, Mutual Funds and Stock Trading Accounts (not in IRAs). These accounts will be required to go to probate upon the death of the account holder unless they are joint (something that may not be wise depending upon circumstances) or the account includes a “Pay On Death” or “Transfer On Death” provision. A POD or TOD will designate a beneficiary upon the death of the account holder and most banks will provide this upon request.
Check Your Real Estate Titles and Other Vehicle Titles
Real estate assets often only include 1 person’s name on the title, and this will often require a probate of the asset in order to transfer it to beneficiaries (heirs) upon the death of the title-owner. Even husbands and wives may face “retitling” challenges if only one name is on the title. In many cases, simply adding a spouse to title or another beneficiary will simplify things dramatically. It is strongly recommended that this option be reviewed with an experienced estate-planning attorney due to the availability of numerous options for superior planning and asset protection such as the use of LLCs and the asset protection risks inherent in joint titling with non-spouses. Vehicle title issues may or may not require probate (often depending on the vehicle) yet it can still greatly simplify matter to think about the titling options prior to disability, incapacity or death.
The 3 Florida estate planning steps you can take now all assume that you already have your necessary estate planning documents. So, please do not ignore this when taking the above steps. Setting up estate documents and taking these steps are a key part of taking a proactive approach to your estate and legacy planning. However, it is also important to know that there is no “one size fits all” approach to estate planning, just as there is not just one way to optimum health. Talking with experts is always valuable because it helps you to determine what approach makes sense for you and your loved ones. To find out more about what documents and advice is needed, get our ultimate guide to Florida estate planning.
If you have other questions about the above steps, I recommend that you make this part of your regular estate planning checkup. As I discussed in a previous article, any changes should be reviewed with your Florida estate planning attorney as part of a regular Florida estate planning checkup.
These 3 Florida estate planning steps you can take now offers a simple way to help your loved ones avoid needless confusion and expense.
This is an updated version of a prior article posted on September 17, 2015.