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 due to laziness or financial incapacity, many Americans still do not plan to protect their assets. estate. active. 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 isn’t left with anything but a lot 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 appoints 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 current financial power of attorney, 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 do so and will ensure that your living will is properly executed so that the end-of-life measures 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 important outstanding liabilities, such as your mortgage balance or car loans. Add to that all of your personal responsibilities, like 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 speak with your estate planning attorney, financial advisor, and accountant.

Step 4 – Review your payees.

Each year, you should review the beneficiary forms on file for all your bank accounts, retirement accounts, and life insurance policies. These forms will determine who inherits most of your assets. 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 predeceases you, this will allow your children to put their inheritance into an inherited IRA and spread the distributions and tax deferral over their lifetime. This could save your children thousands of dollars in tax liability.

Step 5 – Write a will or update your will.

Without a will or living trust, the assets you worked so hard to accumulate during your lifetime will be divided in whatever way 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 of an immediate family member), dividing his estate could be very difficult 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 before January 1, 2005, when Florida, like many other states, collected a separate state estate tax in addition to the federal estate tax, called “collection tax”. ” The collection tax was equal to a portion of the total federal estate tax bill. The federal estate tax is scheduled to disappear entirely in 2010, but then 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 an “uncapped” year in which The 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 combination of will and estate. escrow as soon as possible.

Step 7 – Title your assets correctly.

A married couple whose wills establish a credit protection trust to preserve the estate tax exemption of the first spouse who dies without bankrupting the surviving spouse must keep their assets titled in each spouse’s name separately or they will not qualify for bankruptcy. the benefit. . If, instead, they want their assets to be 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 can 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 ensures your desired outcome, you should contact your estate planning attorney and request a consultation.

Step 8 – Be generous.

Any individual can give up to $13,000 per year in cash, stock or other property to any other individual without worrying about gift or estate tax consequences. One person is also allowed to pay another person’s college or private school tuition, as long as the check is sent directly to the school, in addition to the $13,000 gift allowance. The same applies to 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 single lifetime gift tax exclusion. 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.