Florida residents are doubtlessly familiar with the old adage that nothing is certain in the world except for death and taxes. While death may be certain, what happens to a person’s assets after he or she passes on depends on whether or not he or she made an estate plan. A basic plan usually consists of a will, living trust and power of attorney, and it should be reviewed periodically to ensure that it says what its creator intends.
Those who own homes should look into how they are titled. Some titles only list the name of the homeowner. However, a title can also be designated as a joint tenancy with right of survivorship or tenants in common. Individuals who are planning to pass assets from an IRA to an heir may want to create an inherited IRA. This allows the beneficiary to make withdrawals without paying a 10 percent penalty.
Estate and inheritance taxes could play a role in determining how a plan is written. Estate taxes are paid at the federal level, and only 0.2 percent of Americans are wealthy enough to be affected. Inheritance taxes are paid at the state level, and six states currently levy a tax on inherited property.
Estate planning may help an individual make clear his or her intentions for how assets are to be handled when he or she passes on. Writing clear and legally binding instructions may prevent family disputes or other legal challenges. Assets that are designated to be transferred at death or are held in a trust may pass without having to go through probate. This may save time and money as well as give a family a level of privacy probate doesn’t provide.