Estate Planning Tips To Keep Your Money With Your Loved Ones
In managing your estate and keeping wealth in the family, it’s easy for things to go wrong. This is especially the case if the correct documentation is not in place or your desires are not clearly outlined in these documents. Luckily, this is avoidable so long as you give your estate plan proper attention.
By applying these estate planning tips to your unique situation you can remove worry, gain confidence, and keep your money with your loved ones long after your death.
Know the Difference Between a Will and a Trust
A fair amount of people cannot easily differentiate a will from a living trust. When managing their assets, they may not have the best solution for them in place. Knowing the difference between a will and a trust allows an individual to make the best decision for their estate so that their wealth is both accessible and easily distributed based on their exact wishes.
A will is a document that outlines what should happen with your assets after you pass. It also includes critical details such as your appointed executor, who will become the guardian of your children, how you’d like outstanding debts and taxes to be paid, and from what financial accounts both will be paid from.
With a will in place after your death, the executor can then pay any debts or taxes that remain in your name and distribute your assets to the listed beneficiaries.
A trust, although similar to a will, appoints a trustee to manage and distribute your property instead. Essentially, the trustee takes the place of the executor in interfacing with probate courts. This means that any property listed in a trust does not go through probate court, saving your loved one’s time and money.
A trust is a great option if you have a sizable estate or are concerned your beneficiaries won’t be wise with their inherited money. A living trust allows you to create certain stipulations, providing you with more control over your wealth. To prevent your property from entering probate court, and to clearly define conditions as to how you’d like your assets distributed, a living trust is a better option than that of a will.
Keep Your Designated Beneficiaries Up to Date
A beneficiary is someone you’ve named in your will or living trust and is the recipient of certain assets after your death. Assets a beneficiary may inherit vary; a specific financial amount,
property such as your home, car, or collectibles, or the funds stored in your retirement, checking, and/or savings accounts.