As with any other major transaction, it is always recommended that you seek the advice and attention of an attorney when creating and implementing your estate plan, but whether through laziness or financial incapacity, many Americans still do not plan for the protection of their assets. estate. assets. If you can’t get an estate planning attorney to work with you on your asset protection plan, at least follow the eight steps below and make sure your family is left with nothing but a large amount of debt. As the old adage goes, if you fail to plan, you are actually planning to fail.

Step 1 – Sign a financial power of attorney.

A financial power of attorney designates an agent of your choice to handle your financial affairs in the event you become incapacitated. This person can pay his bills, file his taxes, and manage his investment, retirement, and life insurance accounts. Without a financial power of attorney in place, his family would have to get permission from the court to intervene, costing them precious time and money.

Step 2 – Appoint a health care surrogate.

A health care surrogate is basically a power of attorney for your personal welfare. The surrogate will make health care decisions for you when you are unable to and will ensure that your living will is executed correctly so that the end-of-life arrangements you choose are carried out according to your specifications. In addition to designating your health care surrogate, you must also prepare your living will.

Step 3 – Calculate your net worth.

Start by listing your largest assets and their current market value. This could include your home and any vehicles you own. Next, you’ll want to add your most liquid assets, such as checking and savings accounts, cash, certificates of deposit, or other investments, such as retirement accounts. Add to that the current market value of any personal items that may be valued at more than $500. This number represents your total assets. Now, make a separate list of any major outstanding liabilities, like your mortgage balance or car loans. Add to that all your personal responsibilities, such as credit cards, student loans, or any other debt you may have. This number represents your total liabilities. If you subtract the total liabilities from the total assets and you will have your net worth. Have this figure handy when you talk to your estate planning attorney, financial advisor, and accountant.

Step 4 – Review your payees.

Every year, you should review the beneficiary forms on file for all of your bank accounts, retirement accounts, and life insurance policies. These forms will determine who inherits the majority of your property. If your spouse is listed as a beneficiary on any of these accounts, you must include your children as contingent beneficiaries in case something happens to your spouse. If your spouse dies before you, this will allow your children to put their inheritance into an inherited IRA and spread distributions and tax deferrals throughout their lifetime. This could save your children thousands of dollars in tax liability.

Step 5 – Write a will or update the one you have.

Without a will or living trust, the assets you worked so hard for during your life to accumulate will be divided however the state you live in sees fit. If you’ve had a major life change since you wrote your will (such as marriage, divorce, birth of a child, or death in immediate family), dividing his estate could be very complicated without an updated will. To further protect your family, you should speak with your estate planning attorney about implementing various trusts and tax havens that can help preserve your wealth for future generations of your family.

Step 6 – Plan for State Estate Taxes.

Currently, Florida does not collect a state estate tax, although things were different prior to January 1, 2005, when Florida, like many other states, collected a separate state estate tax in addition to the federal estate tax, called “pickup tax”. “The collection tax equaled a portion of the total federal estate tax bill. The federal estate tax is scheduled to disappear entirely in 2010, but then the provisions of the Tax Relief and Economic Growth Reconciliation Act will expire and the estate tax, along with the collection tax, will return on January 1, 2011. In 2011, there is a possibility that your estate will be double taxed.The year 2010 will be a “no cap” year in which EGTRRA will no longer offer protection to those with a net worth of less than $1 million.With more families exposed to estate tax, it is imperative that you sit down with your estate planning attorney and discuss drafting a combined will and will. escrow as soon as possible.

Step 7 – Title your assets correctly.

A married couple whose wills establish a credit protection trust to preserve the tax exemption on the estate of the first spouse who dies without bankrupting the surviving spouse must hold their titled assets in each spouse’s name separately or they will not qualify for the benefit. . If, instead, they want their assets distributed through living trusts, they must remember to retitle their assets to the name of the trust. If you don’t title your assets correctly, you may defeat any specific intentions you have in forming your asset protection plan. If you are unsure how to title your assets in a way that will ensure your desired outcome, you should contact your estate planning attorney and request a consultation.

Step 8 – Be generous.

Any individual may give up to $13,000 per year in cash, stock or other property to any other individual without concern for gift or inheritance tax consequences. A person is also allowed to pay tuition for another person’s college or private school, as long as the check is sent directly to the school, in addition to the $13,000 gift allowance. The same is true for medical expenses, as long as the check is sent directly to the health care provider. You also have the ability to donate up to $1 million to anyone and receive a one-time gift tax exclusion for life. As the old saying goes, give and you shall receive.

While these eight steps will provide you with basic protection, for a truly comprehensive asset protection plan, contact your estate planning attorney and work together to create a plan for your future and your family’s financial future for generations to come.