7 Important Estate Planning Considerations

When it comes to estate planning, it’s recommended to periodically check in to see to it that everything is up to date and the documents reflect your wishes. Keeping a vigilant eye is especially important if any circumstances have changed since you set up an estate plan.

To make sure you cross all t’s and dot every i, here are 7 important estate planning considerations you should be aware of.

Your Children Are Minors

To steer clear of any complications, you need to ensure that minors inherit assets as beneficiaries of a trust. Otherwise, the court will require the creation of a 1301 Management Trust which has many downsides. For instance, the assets in this case will be managed by a trust department of a bank and there will be many fees to factor in, including an attorney fee of up to 2% of the value of the trust. 

Fortunately, this conundrum can be easily avoided by creating a trust for the lifetime and benefit of minor children. In doing so, you can assign a trustee who can be a close family member. When the child reaches the age you choose, they automatically become a trustee of the trust created in their name.

One Of Your Children Has Special Needs

Among the 7 important estate planning considerations are any special needs children you may have. Because of their vulnerable status, their access to any government benefits such as Medicaid must be preserved. 

You can accomplish this by including a special trust in your will that contains language which forbids or limits distributions for the benefit of the child. In other words, the language in the trust should clarify which services will be covered by the distribution of your assets and which will be provided through government programs.

Your Family Is Blended

Blended families are those with at least one child that is not an adopted or a natural child of both parents. This can present a variety of complications if a married parent dies intestate (without leaving a will). In such a scenario, a child who is not adopted or natural to the deceased parent will receive half of the estate, two-thirds of the deceased property, and the majority of the real property in the name of the deceased parent. 

It’s important to account for this if you want to make certain the surviving spouse doesn’t go through financial ruin. Sadly, many blended families opt not to take proper precautions because the division of assets is a difficult subject. By involving an estate planning attorney, you can erase any turmoil and put together a solution that makes everyone involved satisfied.

A Retirement Plan Represents The Majority Of Your Estate

A retirement plan such as a 401(k) typically includes the majority of the assets in an individual’s taxable estate. The challenge here is that these assets pass to beneficiaries through a beneficiary designation, rather than being governed by revocable living trusts or wills. As a remedy of sorts, you can name the trust itself as the beneficiary. 

Naming a spouse as the primary beneficiary of your 401(k) or IRA will come with tax advantages, which is precisely why many name the trust as an alternate beneficiary.

In the event you go down this route, you must categorize it as a designated beneficiary, in which case the distributions will be made over ten years.

Non-spousal beneficiaries must withdraw distributions from the retirement plan within ten years of the death of the owner of the plan. On the other hand, beneficiaries such as surviving spouses, disabled individuals, minor children, or chronically ill individuals can withdraw inherited assets over their entire life expectancy. 

When talking about underage beneficiaries such as children, upon the death of the grantor of the trust, they are allowed to withdraw the balance contained in the retirement plan within ten years of reaching the age of majority (18 years old in Florida).

You Have A Life Insurance Policy

When talking about 7 important estate planning considerations, life insurance policies or any annuities will pass to beneficiaries through beneficiary designation upon your death (similar to a retirement plan). If you want more control over these assets, you can once again name the revocable living trust as an alternate beneficiary to your spouse or the primary beneficiary.

You Don’t Have An Executor

A key component in creating a will or a revocable living trust is naming an executor. This individual is tasked with carrying out your wishes and distributing the estate per the documents you leave behind.

These duties are not only important, but they can also be extensive and may include collecting assets, paying off any remaining debts, and ensuring heirs receive appropriate benefits. This is why it’s necessary to choose an individual who you trust and will be able to fulfill this role with utmost responsibility and dedication.

You Didn’t Get A Professional To Look Over Your Estate Planning

Lastly, if you haven’t sought out an estate planning attorney to read through your estate planning documents, you are missing out. By working with a specialist familiar with the intricacies of the law, you can further refine your estate plan and safeguard the assets you own regardless of the circumstances.

Although there is plenty of information online, most guides are too generalized and may not accurately reflect your personal financial and family situation. Even if you already have a trust or a will, it’s recommended to ask for professional assistance to verify everything is properly accounted for and that there are no mistakes that will cost the beneficiaries a lot of money upon your death.

Get in touch with the Law Offices of Mary E.King for assistance with your estate planning

With this list of 7 important estate planning considerations, you’ll be better prepared to update the current estate planning documents and discover the best way to divvy up your assets. Yet, without an attorney, your options are limited to the basic things like not assigning an underage person as a beneficiary. 

To introduce significant changes to the existing estate plan and solidify your wishes while staying legally compliant, get in touch with the attorneys at The Law Offices of Mary E. King. We have helped countless clients fulfill their state planning goals and made sure their loved ones were well taken care of after they passed away.

Give us a ring at 941-906-7585 or fill out our online contact form to schedule a free consultation where we can start working together on strengthening your estate plan.

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.