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Succession planning can be broken into manageable steps

Succession planning can involve a lot of work, and it is rarely at the top of a business leader’s to-do list. However, it can be advantageous to begin succession planning early, so there can be plenty of time to train and mentor potential successors.

To help fit succession planning into your busy schedule, consider breaking it into manageable steps. A few steps that can help you get started include setting goals, identifying important positions, gaining the support of leaders, determining where you will find successors and creating career paths through the business.

Choosing guardians is an important estate planning step

Choosing a guardian to take care of minor children is among the most difficult and important decisions made by Florida parents during the estate planning process. Neglecting to take this step leaves important decisions that parents would likely want to have control over in the hands of the court. Furthermore, it can also give rise to bitter legal disputes that drain estates and divide families.

Parents can appoint two types of guardians. Guardians of the estate have a fiduciary role and manage the assets left to a minor child on their behalf. Guardians of the person fill a traditional parent role and make sure that the needs of children, such as schooling, health care and housing, are met. Parents can choose a single person to fill both roles or select two individuals based on their abilities and skills.

Businesses can benefit from succession planning

Business owners in Florida may be particularly concerned with how their business will continue to progress after they decide to retire or move on. Succession planning can be an important part of ensuring that a company is viable for the future and not only for the present. Of course, many companies do not want to focus on succession because they are more concerned about developing their potential in the present. However, succession planning can be a part of business development, especially because training and growth in the workplace are an important part of any plan for the future.

Even business leaders who are satisfied with the performance of their management team and feel confident of their abilities to step in can benefit from thinking and planning more about succession. It is difficult for people to do the best job possible in a new role if they do not have the training that they need to excel in that capacity. Experts advise that business owners can improve their succession readiness by thinking of themselves as developers of people who continue and expand upon the company's success. Studies show that leadership is one of the most important factors to inspiring workplace engagement and improved performance.

You determine where your ashes go after cremation

Choosing what happens to your body after death is an incredibly personal decision. Whether you choose traditional burial in a cemetery or cremation, you’ve likely reached that decision on factors such as personal preference, religious belief, or cost. There’s ultimately no right or wrong answer and what matters is that you declare those wishes in your will.

If you choose the cremation route, there are a few more things you should consider. Many people who choose cremation choose a trusted person, typically the executor or administrator of their will, to care for their remains.

Titling assets a critical part of an estate plan

Almost every Florida resident can benefit from having a will, regardless of how complicated their estate is. It is also important that assets are properly titled so that they go to the intended beneficiaries. Retirement accounts, bank accounts and other assets may be transferred per the terms of a beneficiary designation or based on how they were titled. In most cases, these assets will not be included in a will.

It is important to know that a beneficiary designation will overrule any language in a will. Furthermore, it is possible for individuals to name their estates as beneficiaries to life insurance or other assets. Typically, an individual will name a beneficiary when applying for a life insurance policy or setting up a retirement account. If assets are to be held in a trust, they should be titled in the trust's name.

Family challenges in creating an estate plan

Blended families, sibling rivalry and irresponsible heirs are a few of the challenges that can make estate planning difficult for some people in Florida. Many financial professionals say that in addition to creating a clear estate plan, individuals should try to communicate with family members about the plan. This can help alleviate misunderstandings while the estate owner is still alive. Some people also write a "letter of intent" to be read after their death.

One common error is putting an adult child in charge of a trust. This can create tension with the other siblings. A better choice may be to retain a corporate trustee.

Naming IRA beneficiaries

One factor that Florida residents should consider when determining to whom to leave their IRA is whether they want the funds to remain in the family. For people who have no family or who do not want to leave the funds to relatives, a favorite charity can be selected as the beneficiary. For individuals who want to leave the money to their family, there are some additional factors they have to take into account.

Marriage is an important detail. Unless their spouse has completed a written waiver, individuals are required to list their spouse as their 401(k) beneficiary according to federal law. If they do not reside in a community property state, individuals do not have list their spouse as the beneficiary to an IRA. It may also be a requirement of the IRA custodian to submit a spousal waiver consent form if the spouse will not be listed as the primary beneficiary.

Beneficiary designations and estate planning

A frequently overlooked element of estate planning for some people in Florida might be beneficiary designations. Assets such as retirement accounts, life insurance, and corporate asset accumulation plans are passed using a beneficiary designation instead of a will or a trust. Some assets, such as a home, might involve joint or survivorship ownership.

There are a few issues that may arise as a result of neglecting these assets as part of the overall estate plan. One is that the spouse may be named as the primary beneficiary and the children as contingent beneficiaries. However, if a person is predeceased by the spouse, the assets may pass directly to the children before the person is ready for this to happen. Some people prefer for their children to reach a certain age before they receive a large lump sum.

When might a spendthrift trust be beneficial?

Loving your children does not necessarily mean you trust them with your money. Sometimes it is prudent to use appropriate estate planning tools to protect your money from being squandered and protect your children from themselves.

Adding a spendthrift provision to your trust allows you to control more details about the circumstances in which your beneficiaries will receive disbursements from the trust. For example, you can have the money disbursed in small payments over time, you can allow the trustee to disburse payments as needed to maintain your child’s lifestyle or you can require the trustee to use the money to make certain payments on your child’s behalf. There are several circumstances when this could be beneficial.

Planning for a smooth estate transition

For many people in Pennsylvania, one of the most important inspirations to develop their family wealth is the potential to leave a legacy behind to future generations. In order to make sure that this dream is realized, however, it is important to put in place a plan that makes it possible. This is especially the case for people with substantial assets that they plan to pass on. In addition to developing an initial plan, people need to be prepared to check in regularly, around every three to five years.

Over time, inconsistencies or conflicts can develop as different parts of an estate plan come together. In addition, underlying tax laws can change, making different arrangements more advantageous for everyone. There are other things to also keep in mind in order to develop a successful estate transition. One key item is to make sure that all of a person's assets are included in the distribution plan. This can be especially critical for people with international properties or other overseas investments. In some case, U.S. estate documents may not be sufficient to transfer these assets, and other steps and filings may be necessary to memorialize a person's wishes for the future.

Kramer A. Litvak, P.A.
226 East Government Street
Pensacola, FL 32502

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