Strategies and tools that previously worked to protect Florida estates from taxes may be a liability under the new rules of the SECURE Act. In addition to the raising of the estate tax exemption limit to $11.4 million, Congress has changed the rules governing IRA withdrawals. A professional in the field explained the change and how to minimize its effects with the tools of estate planning.
Trusts are a tool many individuals, known as testators, use to protect the value of their assets and for passing money and other valuable items onto their heirs. Most testators set up trusts to ensure that their assets are protected from ending up in the hands of their creditors. There are many different types of trusts. Spendthrift ones are unique in that they keep money safe from both creditors and heirs.
If you create a living trust, you still have a lot of freedom. You can typically revoke the trust or make alterations as you see fit. This could include adding more assets to the trust or removing assets as you need them.
A person who has a revocable trust as part of an overall estate plan can revoke that trust at any time. However, the process may not be a simple one. A Florida resident who decides to change an estate plan in this way may want to consult an attorney to ensure that the process is done correctly.
When people in Florida think about planning for the future, there are a number of concerns that people may have in mind. Estate planning is an important process that allows people to pass on their assets to their beneficiaries, and there are a number of key legal documents, including wills, trusts and powers of attorney, that can set the plan in process. People should be sure that they understand the contents of these documents so that they can explain them to their beneficiaries, trustees and others. While professional advice is critical to ensure that people develop a workable plan, each person should understand the costs and benefits associated with a particular estate planning strategy.
If you have recently started to research estate planning, you may have started to notice that a huge emphasis is placed on attempting to avoid probate. Probate is a court-supervised process that essentially ensures that all assets within an estate are distributed correctly. So, you would be right to question why estate planners want to avoid probate.
Tax law changes could affect the way that some people in Florida plan for the future. In 2019, the federal exemption for estate and gift taxes has reached $11.4 million per person or $22.8 million for married couples. This means that most people may not be exposed to federal estate taxes although people with substantial wealth may want to put more consideration into the planning processes. After all, these larger exemptions are scheduled to sunset in 2025 unless they are renewed by Congress. This is one reason that estate planning is almost never a final process. People can actively review their wills and other estate documents in order to make sure that they reflect current relationships and life changes as well as different tax regulations.
Some people in Florida may want to consider creating a trust as part of their estate plan. A trust can be a good way to protect assets, but people should also be aware that trusts come to an end as well. It is important to plan how this will happen to ensure that the purpose of the trust is fulfilled.
Florida residents usually put estate plans into place to reduce their tax burdens and ensure that their assets are passed to their loved ones in accordance with their wishes. This is generally done by using wills. Wills must go through the long and sometimes costly probate process before property can be distributed, but this step may be avoided by placing assets into trusts or using beneficiary designations.
Florida residents may create trusts for a variety of reasons. For instance, they may do so in an effort to protect assets or minimize an estate tax bill. While a trust may exist in perpetuity, there are ways in which such a document may terminate. For instance, the creator of the trust could specify that it expires on a certain date in the future. The trust could also expire if the money or other assets inside of it have been fully distributed.