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What are less-common reasons for estate planning?

In general, people in Florida create an estate plan for several reasons. They may want to avoid having their assets go through the probate process. They may also want to address tax issues and, naturally, see their assets passed on to their loved ones to provide their loved ones' financial future. However, there are other reasons to consider drafting estate planning documents.

One reason a person might create an estate plan is to incentivize the behavior of an heir. For example, a person could set up a trust in a manner in which the beneficiary will not receive trust assets unless he or she goes to college. But, if creating an incentive trust, it is important that the purpose of the trust is well-defined and the benchmarks for receiving the trust assets are clear and appropriate.

Another reason a person might create an estate plan, is to keep relatives or friends from simply entering the person's home after he or she dies and walking out with the estate assets. Although, it is illegal for people to simply help themselves to the deceased's property in this manner, it does happen.

However, as it is usually seen as a family affair, it is rarely reported. By having an inventory of assets in an estate plan and informing heirs of what to expect, inheritance-wise, one may be able to prevent such "inheritance hijacking."

Finally, a person may create an estate plan, or review the one they have already, if they are planning to move to another state. Different states have different laws when it comes to property ownership, particularly between married couples.

Moreover, different states have different laws on who can be the executor of an estate and different inheritance laws. It is important to understand how these laws will affect an estate plan.

As one can see, there are many reasons why one may want to create an estate plan. Of course, this list is not all exhaustive. In the end, determining what to include in an estate plan and why it is a personal matter. However, it can help to discuss an estate plan with an attorney, who can help draft the documents necessary to ensure wishes are met.

Source: Wealth Management, "The Other Reasons For Estate Planning," Janice A. Forgays, Feb. 1, 2017

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