The whole process of considering what happens to your assets when you are gone can be an overwhelming one, but it is an important thing to make sure that your children are taken care of and that your wealth is distributed as you wish. This article will explain nine essential steps that you can take to guarantee that your assets remain with your children after your death.
Create a Will
A will forms the backbone of any estate plan. The will you write will enable you to easily indicate exactly who shall gain from your assets so that your children become primary beneficiaries of the deceased. In the absence of a will, the estate could be distributed by state laws, which might fail to honor your wishes.
Name Guardians for Children
It’s crucial to designate a guardian in your will if you have younger kids. In this way, your kids will be looked after by someone you trust after your death. Additionally, until the minors reach adulthood, this guardian will manage the assets on their behalf and distribute their shares accordingly.
Create a Trust
With a trust, you can transfer your assets to an impartial third party, who will take care of them for the good of your children. This prevents assets from being exposed to creditors, it avoids probate, and it can deliver inheritance to your children at the right moment. Trusts offer that degree of flexibility and control when you distribute your assets.
Give Assets Consciously Before Dying
If you are not fond of creating a trust fund, then you need to pass down and gift them assets during your lifetime and be certain your children will get their inheritance. The effect of this is trying to make your estate smaller and, thus, reducing taxes. Note that there is a tax liability to gift-giving; however, you are allowed to give a certain amount every year.
Family Limited Partnership
If you have substantial assets, you can create a family-limited partnership to give your children part of your wealth while you still retain control over them during your lifetime. An FLP protects taxes so that you will handle the management of the family’s assets effectively.
Minimize Probate
Probate is the legal transfer of your estate, which might be complex and costly. You can always take some steps to avoid probate for quick distribution of assets to your children. You can establish a living trust or name beneficiaries on accounts to skip this process. Consulting probate attorneys is wise since they are knowledgeable in vast areas of estate law and will ensure that the required assets move smoothly without extra time being wasted in court procedures.
Estate Tax Planning
Depending on the size, your estate may be subjected to federal and state estate taxes. The involvement of tax planning will reduce the burden on your children by having more money set aside for them. An attorney can help you with certain strategies of gifting and charitable donations that reduce the overall value of your estate to a nontaxable amount.
Correct Asset Titling
How you title assets determines how they are transferred upon your death. For instance, joint ownership may provide your co-owner not only with current rights to an asset but also with the right to have that asset bypass the probate process altogether and transfer itself to your co-owner upon your death. That is why you must title your assets in accordance with your estate plan to ensure ease of transfer of the assets to the children upon death.
Power of Attorney
Having someone with a power of attorney in your place will enable that individual to conduct financial and legal decisions on your behalf in case you become incapacitated. This would help in managing your assets, paying bills, and seeing to it that your estate would not break up for the benefit of your children.
Conclusion
Death is inevitable. However, planning for what should happen to your assets after your death requires careful planning and compliance with the law. You should make a will, establish a trust, or hire attorneys to secure the inheritance of your children. The right strategy can help you save yourself from overpaying taxes, avoid probate, and ensure that your money reaches your children exactly the way you want it to, long after you are gone.
