Estate Planning in Florida Basics: What to Expect | Crews Bank & Trust

Estate planning is a crucial step in securing your financial future and ensuring that your wishes are carried out after you pass. Whether you’re beginning to think about your legacy or need to update an existing plan, understanding the basics of estate planning is essential. In this blog post, we'll explore the foundational elements of estate planning, what to expect during the process, and how Crews Bank & Trust can assist you at every step.

UNDERSTANDING ESTATE PLANNING

What Is Estate Planning?

Estate planning involves preparing for the management and distribution of your assets in the event of your death or incapacitation. It ensures your wishes are honored, reduces potential conflicts among heirs, and can offer significant tax advantages. Estate planning is not just for the wealthy—anyone with assets, dependents, or specific wishes should consider creating an estate plan.

Common Misconceptions About Estate Planning

Myth 1: Estate planning is only for the wealthy.

Fact: Many people believe estate planning is only necessary for the wealthy or that it only involves drafting a will. However, estate planning encompasses a broad range of legal and financial strategies designed to manage your assets during your life and after your death. It includes wills, trusts, powers of attorney, healthcare directives, and more.

Myth 2: If I die intestate, or without a Will, my assets go to the State of Florida.

Fact: The State of Florida does not automatically take your assets if you die without a will. Florida's intestacy laws will determine how your assets will be distributed, putting your close relatives first. However, this does not guarantee they will be distributed the way you want them. Making a plan is important because of this.

Myth 3: A properly executed estate plan can reduce the chances of a guardianship appointment.

Fact: This one is actually true. A well-crafted estate plan, including documents like a durable power of attorney and healthcare directives, can significantly reduce the likelihood of a court-appointed guardianship. 

Myth 4: If I have a valid Revocable Living Trust, I do not need a Will.

Fact: While a revocable living trust is a powerful tool for managing your assets during your life and avoiding probate, it does not completely eliminate the need for a will. A will can be used to address any assets not transferred into the trust during your lifetime and ensure a comprehensive estate plan.

Myth 5: I need more than a Power of Attorney document to be sure my affairs are in order during life and at death.

Fact: This is also correct. While a power of attorney is crucial for allowing someone to manage your financial and legal affairs if you become incapacitated, it is just one part of a comprehensive estate plan. You also need other documents, such as a will, trust, healthcare directives, and potentially more, to ensure that all aspects of your affairs are managed according to your wishes both during your life and after your death.

WHAT IS THE GOAL OF YOUR ESTATE PLAN?

When creating an estate plan, it's essential to define your goals clearly. Understanding what you want to achieve will guide you in making the right decisions and selecting the appropriate legal tools. Here are some common goals you might consider when crafting your estate plan:

1. Avoiding Probate and Maintaining Privacy

Avoiding probate can save your loved ones time, money, and stress while maintaining privacy ensures that sensitive details about your estate remain confidential. Together, these strategies help streamline the transfer of your assets and protect your family's privacy.

• Avoid Probate: Probate is the legal process of verifying a will and distributing assets under court supervision. It can be time-consuming and costly. To bypass this process, you might consider strategies like creating a living trust, which allows your assets to pass directly to your beneficiaries without court involvement.
• Maintain Privacy: Probate proceedings are a matter of public record, which means details about your estate can become accessible to anyone. If maintaining privacy is important to you, using trusts and properly designating beneficiaries can help keep your estate settlement out of the public eye.

2. Ensuring Your Wishes Are Followed

It is the core purpose of estate planning to ensure that your wishes are respected and carried out, both during your lifetime (in case of incapacity) and after your death. Doing so ensures that your legacy is handled exactly as you intended.

• Documentation of Your Wishes: Whether you choose a will, a trust, or a combination of both, these documents allow you to control how your assets are allocated after your death. Ensuring that your assets are distributed according to your specific wishes and documented appropriately is a fundamental goal of any estate plan. 
• Plan for Potential Incapacity: Life can be unpredictable, making it crucial to plan for potential incapacity. When you appoint trusted individuals to manage your affairs and make decisions on your behalf if you become incapacitated, you protect your assets and ensure your wishes are followed even if you cannot express them.
• Asset Protection: If protecting your assets from creditors, lawsuits, or other potential threats is a priority, certain types of trusts, such as irrevocable trusts, can offer a level of protection. These trusts help preserve wealth for your beneficiaries while minimizing risk.

3. Caring for Loved Ones

It is essential to have a valid estate plan to ensure the well-being of those you care about, both financially and legally. An estate plan reduces risks and ensures your beneficiaries' well-being.

• Surviving Spouse: Ensuring that your spouse is financially secure after your passing is a common goal. Your estate plan can include provisions through trusts, life insurance, or other mechanisms to ensure they have the necessary resources to maintain their standard of living.
• Family Members with Special Needs: If you have family members with special needs, it's important to plan carefully to ensure they receive the support they need without jeopardizing their eligibility for government benefits. A special needs trust can be an effective tool for this purpose, allowing you to set aside funds specifically for their care.
• Arrangements for Pet Care: For many, pets are part of the family, and planning for their care after your death is just as important as planning for human beneficiaries. You can include provisions in your estate plan to ensure that your pets are cared for, either through a pet trust or by designating a caretaker.

It is important to define your goals to develop an estate plan that meets your needs while also providing peace of mind, knowing that your wishes will be honored and your loved ones will be cared for. 

Whether your priorities involve avoiding probate, protecting assets, or ensuring the well-being of a surviving spouse or special needs family member, your estate plan can be tailored to achieve these objectives.

KEY COMPONENTS OF AN ESTATE PLAN

Wills and Trusts

A will is a legal document that outlines how your assets should be distributed after your death. A trust, on the other hand, can manage your assets during your lifetime and distribute them afterward, potentially bypassing the probate process.

• Revocable Living Trust: This type of trust provides flexibility and control during your lifetime, allowing you to make changes as needed. Upon your death, the trust becomes irrevocable, and your assets are distributed according to your instructions without going through probate.
• Irrevocable Trust: An irrevocable trust is used to protect assets from creditors and reduce estate taxes. Once established, the terms of the trust cannot be altered without the beneficiary's consent​.

Power of Attorney

A Power of Attorney (POA) is a critical component of your estate plan, allowing someone you trust to manage your financial and legal affairs if you're unable to do so. There are different types of POA, including:

• Durable Power of Attorney: Remains effective even if you become incapacitated.
• Medical Power of Attorney: Allows someone to make healthcare decisions on your behalf if you're unable to communicate your wishes.

Healthcare Directives

Healthcare directives, such as a living will and designation of a Healthcare Surrogate, ensure that your medical wishes are followed when you cannot communicate them yourself. These documents guide your loved ones and medical professionals during critical moments, relieving your family from making difficult decisions under stressful circumstances.

Essential Estate Planning Documents

Your estate plan should include several key documents, each serving a specific role in ensuring your wishes are honored and your affairs are managed according to your preferences:

• Last Will and Testament
• Living Will
• Designation of Health Care Surrogate
• Durable Power of Attorney
• Designation of Pre-Need Guardian

These documents work together to manage your assets, healthcare, and legal affairs during your life and after your death.

STEPS TO CREATING AN ESTATE PLAN

1. Inventory of Assets

Creating an estate plan begins with an inventory of all your assets, including real estate, bank accounts, investments, insurance policies, and more. You should consider how these assets are titled (e.g., jointly owned, individually owned) and who the beneficiaries are.

• Ask Yourself: What do you own? How do you own it? What does the title say (JTWROS, JT, TBE, Tenants in Common, sole name, or trustee name)? Who are the beneficiaries both primary and contingent? This comprehensive review is crucial in ensuring that your assets are properly managed and distributed according to your wishes​.

2. Choosing Beneficiaries

Selecting beneficiaries involves careful consideration of who will receive your assets. Possible candidates may include family members, charitable organizations, or even friends. It is essential to regularly update your beneficiary designations to reflect any changes in your relationships or life circumstances.

3. Selecting a Trustee or Executor

Choosing the right trustee or executor is vital. The chosen person will manage your estate according to your wishes, so it’s important to select someone with the necessary skills, integrity, and ability to handle these responsibilities effectively. Consider their investment, legal, or business skills, and ensure they can honor your wishes.

MAINTAINING AND UPDATING YOUR ESTATE PLAN

Regular Reviews

Estate planning is not a one-time task. It’s important to regularly review and update your plan to ensure it aligns with your current wishes and circumstances. Key life events such as marriage, divorce, the birth of a child, or significant changes in financial status necessitate updates to your plan​.

Consulting Professionals

Given the complexities involved in estate planning, consulting with professionals ensures your plan is comprehensive and legally sound. The wealth management team at Crews Bank & Trust, which includes account/trust administrators, financial planners, private bankers, and portfolio/investment managers, is here to help you navigate the process and keep your plan up-to-date.

CREWS BANK & TRUST’S ESTATE PLANNING SERVICES

At Crews Bank & Trust, we manage over $700 million in assets, including IRAs, trust assets, foundations, and personal accounts. Our commitment is to act in your best interest, providing fee-only services with no commissions and ensuring that your estate plan is tailored to your needs and goals.

Crews Bank & Trust offers a range of estate planning services tailored to meet your specific needs, including:

• Probate Avoidance Planning
• Tax Reduction Examination
• Estate Plan Administration Review
• Fiduciary Investment Analysis
• Bill Pay & Tax Coordination

Our experienced team is dedicated to providing personalized service and guidance throughout your estate planning journey​.