Estate planning is not fun to think about and can be difficult, but it is important to have an estate plan for many reasons. An estate plan gives your loved ones a strategy to implement your exact wishes, avoids having a probate judge decide how to distribute your estate, and it keeps your heirs from having a large tax burden. The Florida Office of Financial Regulation encourages Floridians spend time getting their affairs in order to ease the burden on their loved ones.
Keep these tips in mind to help you create an estate plan:
- Create a will and a living will. A will establishes your desired distribution of assets that are not already designated with a beneficiary or that are outside of a trust. Clearly describe your wishes and beneficiaries in the will, so that there are no questions about your desires. A living will, or advance directive, will provide guidance to your loved ones on any medical decisions they will be required to make in the event you are incapacitated.
- Make a list of your debts. Create a detailed list of your debts, including credit cards, auto loans and mortgages. Include the amount you owe and contact information for each company. This will allow your loved ones to make arrangements to pay the debts without incurring additional penalties or fees.
- Develop a catalog of electronic accounts and current login information. Keep all usernames and passwords for every online account you have in one place, so that your loved ones can access necessary accounts. Make sure this information is kept in a secure location.
- Keep copies of retirement accounts and insurance policies in a central location. Be sure to note any designated beneficiary on each of your accounts, including alternate beneficiaries, as this will supersede what is noted in your will. Note any transfer on death (TOD) designations on any bank or brokerage accounts, as well, for the same reason.
Once you have your estate plan in place, regularly review and update all information, including beneficiaries. Aim to review your estate plan, including your will, every few years and after every major life event, such as marriage, divorce, relocation to another state, etc.
The Florida Office of Financial Regulation offers Floridians a robust online Consumer Knowledge Center, where you can find more information on several financial topics.
