Tax Liability Not The Only Important Thing In Estate Planning
July 5, 2013
Estate plans help make sure one is prepared in the case of one’s death. Although this is an uncomfortable topic, it is an important one to address. There are a variety of goals which people have in mind when making an estate plan in Florida or in any other state. Most people usually focus on avoiding tax liability when doing their estate planning. However, many experts believe it to be a common mistake to put too much emphasis on this aspect while ignoring other important elements of an estate plan.
Although tax liability is a legitimate concern when creating an estate plan, many experts believe it is more important to focus on making sure the right people receive an estate’s money and assets. This means ensuring the intended beneficiaries are properly assigned to receive the estate. Although most parents want to divide their assets evenly among children, some experts believe this can be problematic in the case of one child being financially irresponsible.
For instance, in the case of a family business, if one child is passionate about the business while the other child does not care about the future of the business, giving the two adult children equal portions of the business could cause the business to be mismanaged. Adult children are not identical and each adult child has different values and needs, which must be reflected in one’s estate plan. Therefore, simply dividing assets of an estate equally among the children may not be in the family’s best interests.
Along with ensuring that the proper beneficiaries receive the right assets, it is also advisable to ensure that the estate planning documents are drafted correctly. This helps to make certain that the documents are legally enforceable in Florida or in any other state. However, in order to do this, one must understand the applicable estate and probate laws.