Florida residents pay attention to tax issues, and like people elsewhere, they tend to believe that tax planning is the main reason for making an estate plan. The recent Tax Cuts and Jobs Act of 2017 continued the trend in recent years to increase the exemptions available under the federal estate taxes. Most people will therefore have no federal estate tax burden going forward once the new law becomes effective. Some people believe that this fact eliminates the need for estate planning but that is simply untrue.
There have always been many other reasons for the need to prepare an estate plan. An estate plan serves some basic purposes, including providing assurances that one’s assets will be distributed as desired. It also assures that the estate will maximize the economy of its efforts and keep a lid on overall costs.
Additionally, some states impose a state inheritance tax, which can be a significant drain on the estate assets. Estate planning can step in to reduce or eliminate this expense. A legal tool called a credit shelter trust may be designed by an experienced estate planning attorney to eliminate the estate or inheritance tax. This is a complicated issue that requires consulting with the attorney to determine the need for this strategy.
In addition, the normal probate process that is triggered when a will is filed in the courthouse after the testator’s death can be costly and excessively time-consuming in many instances. The attorney can devise a living revocable trust that allows for the legal avoidance of probate. The assets can be available immediately and funds can be saved by bypassing probate.
The estate planning process in Florida provides a way to set up tools and procedures that will lessen the potential for conflicts between one’s heirs after death. Specific instructions can be established and procedures mandated that will avoid dissension. Whether by trust or will, the individual will benefit greatly by having an advance plan that will leave little guesswork for one’s chosen trustees and personal estate representatives.
Source: msn.com, “Is Estate Planning Now Dead?”, Tracy Craig, May 1, 2018