Reasons Why You Need an Estate Plan

Are you an adult with dependents? Do you own assets? Are you worried about what will happen to your estate when you die?

If so, estate planning isn't something to think about -- it's something to do.

Estate planning is the process of legally arranging the transition of your estate to your heirs upon death. A well-laid estate plan can reduce your estate's tax burden, guarantee that your children are taken care of after you're gone, and provide peace of mind for you and your family.

Luis E. Barreto & Associates, P.A., the experts on family estate planning in Miami, offer 6 reasons why estate planning is critical to your estate and the welfare of your loved ones.

1. You Have Assets

The estate planning process generally begins when you start looking at what will happen to your estate (assets, house, car, etc.) when you die. As an adult with financial assets and children who may be depending on you, estate planning is your responsibility.

An estate plan is good for your assets because you can ensure that your estate passes to your heirs according to your wishes. You should make sure that your estate plan accounts for the likelihood of you dying young, dying old, or possibly not passing away at all!

The consequences for not estate planning are severe. Without estate planning, the state of Florida will decide how your estate gets distributed according to its rules. There's no guarantee that your assets will pass to your heirs, or that they will pass in the way you would have liked. This is why you should speak with experts like Luis E. Barreto, whose estate planning strategies in Miami are the best of the best.

2. Your Family, Friends, or Loved Ones Will Suffer Without Your Estate

Another reason to make estate planning a priority has to do with the people you leave behind. The day will come when you are not here to financially take care of your estate or loved ones. On that day, the estate plan will go into action.

Having an estate plan in place is beneficial for your loved ones because it will prevent many headaches and heartaches.

Without an estate plan, your heirs may be responsible for filing multiple tax returns, locating bank accounts and other assets, dealing with creditors who are trying to collect on debts, etc. The last thing anyone wants is for their friends and family to be burdened by stress and financial difficulty while grieving, so creating an estate plan is an excellent way to make their lives and grieving process more manageable, even after you are gone.

3. You Have Loved Ones Who Depend on You

The odds are good that you have other people besides yourself who depend on you for support, either now or in the future.

If you have children under 18 years old, estate planning is even more critical.

If you die without estate planning, the court may appoint a guardian for your children through its default provisions. You can 'opt-out' of this provision by estate planning to name guardians yourself.

Without an estate plan in place, you may not be able to ensure that they are taken care of properly when you are gone. You should make a will to determine who gets your estate and how it's managed, and you should name guardians for your children in that same will.

4. You Will Reduce Your Estate Taxes

Estate planning is also suitable for reducing estate taxes. Estate taxes are charged when the value of your estate (assets, property, cash) equals or exceeds a certain amount after you die.

For lower-income individuals, the current federal estate tax threshold in 2021 is $11.7 million. This means that other than small gifts, you can transfer up to $11.7 million in wealth before any estate taxes are applied.

Tax planning can reduce your estate's tax bill by shifting assets to the people who will receive them after your death - for example, by giving money to family members while you're still alive so they're less reliant on your estate, or by giving money to charity during your lifetime instead of in your will.

5. You Can Protect Your Loved Ones From Debts and Creditors

When you die, your estate is responsible for paying all debts. If the value of your assets doesn't cover all of your debts, creditors will come after your loved ones to get their money back.

Creditors can make a claim on your estate by going through probate, a legal process in which a court determines how your estate is to be distributed. Probate can be expensive and time-consuming, and it usually takes at least 6 months (if not longer).

Thankfully, you can use the expert advice on estate planning strategies in Miami from Luis E. Barreto & Associates, P.A. to avoid this. You can use an LLC or other legal filing to protect assets from creditors while you're alive and even after death. Creating these types of legal entities for part of your assets can give you peace of mind.

6. Your Estate Plan Can Include Special Wishes

One of the most important reasons to make an estate plan is because it gives you control over how your property and wealth will be transferred. When you make a will, trust, or other estate planning document, you can create special instructions that go beyond what would happen automatically under Florida law.

For example, you can include what you want to happen if your spouse dies first or how you want your money divided if something unexpected happens before a loved one inherits it.

Conclusion

The most important part of estate planning is deciding who will get your assets and when they will inherit them - this means naming beneficiaries for bank accounts, retirement plans, life insurance policies, and anything else you own.

Creating an estate plan is a way to provide for the people and most important causes while also keeping your loved ones from unnecessary stress when the time comes.

Contact Luis E. Barreto & Associates, P.A. for access to the best family estate planning in Miami. Call today to schedule an appointment with a qualified attorney.