Coordinating Wills and Beneficiary Designations in Florida
The State of Florida has laws that govern the distribution of estate assets upon a person’s death, but the state’s way of handling those assets probably isn’t right for your particular situation. For example, if you have loved ones with special needs, or if there are heirs who can’t yet be trusted with large sums of money, or if you want to protect your loved ones from tax liabilities and still be able to receive government benefits late in life, you’ll want to craft a comprehensive estate plan.
Often in these matters, coordination is the key. For instance, if you update your will after a major life change such as a divorce or a birth in the family, but you don’t update the beneficiaries on your life insurance policy or your retirement account, then the will could be overridden by the prior beneficiary designation.
IRAs, 401(k)s, life insurance policies and other pay-upon-death accounts will need to be updated and coordinated with your will. Not updating those beneficiary designations could lead to costly troubles in probate.
Creating a trust is one way that many Florida residents choose to protect themselves and their loved ones’ financial future. But it is important to choose the right kind of trust, and to coordinate the trust’s designated beneficiaries with the heirs and beneficiaries named in other estate planning documents such as the will.
Here are some types of trusts Florida residents might want to look into:
- Irrevocable life insurance trust
- Spendthrift trust
- Supplemental needs trust
- Charitable remainder trust
To make the right decision for yourself and your family, it’s a good idea to speak with an attorney with experience in elder law, Medicaid planning and protecting estate assets.
Source: nj.com, “Biz Brain: Beneficiaries, wills and inheritances,” Karin Price Mueller, Oct. 23, 2013
