Florida has relatively favorable estate tax laws compared to the rest of the country, but this does not mean that individuals should not create an estate plan. An estate plan can be used to help individuals or their heirs avoid certain other taxes, and they also dictate which assets should go to which people. Business owners in particular can benefit from an estate plan, as they can use it to spell out what they want to happen to their business if they pass away or become incapacitated.
A succession plan, which can be a document within an estate plan, will state whether a business should be maintained and who should run it if something happens to the owner. If the owner wants to get rid of the business after he or she dies, the owner can name someone to be in charge of selling the business. It is a good idea to have a discussion with whomever will be put in control of the business before creating a succession plan.
Estate planning can also include naming someone to have power of attorney over a person’s medical or financial decisions in the event that person becomes mentally incapacitated. A related document is an advance healthcare directive, which indicates the type of medical treatment a person wants to receive if he or she is, say, on life support.
The key component of an estate plan will be either a last will and testament or a living trust that lists the heirs and beneficiaries for a person’s property and assets. A will goes through probate and is overseen by a court, whereas a trust is overseen by a trustee designated by the person creating the trust (the trustor). An estate planning attorney can help clients decide which documents they should include in their estate plan.