If it’s taken you a lifetime to build up a nest egg that can help you retire comfortably and provide for the future well-being of your family, then it only follows logically that you won’t want to part with that nest egg.
Yet that’s exactly what so many Americans do when they ignore the issues of estate planning, estate taxes, and probate laws. If passing more money to your loved ones is the goal, then the course of action is obvious: it’s time for you to hunker down and learn how you can do just that. There are a number of legal systems and entities you can use to make sure your money goes to those you love – and it’s time to learn about them before it’s too late.
The Art of Wills
Drafting a last will and testament and making sure that it is properly signed, witnessed, and notarized is your first tool in making sure your family’s financial needs are taken care of. That’s because a legitimate will is the guiding point for the probate system to dole out the inheritance of your loved ones. Even if you have a will written up, you’ll want to make sure that it carries legal weight by being properly notarized. If not, you may not have the control over your assets that you thought you did.
Drafting wills is also about being clear about what property you own and where it will go. A well-written will takes care of this in succinct legal language that leaves no doubt as to where and how your assets will be passed on.
Trusts and Living Trusts
If a will is your first tool in making sure your money goes where it should, trusts and living trusts just may be your most powerful ones. That’s because trusts and living trusts are legal entities that you fund with your own money – but technically do not belong to you. Because this money does not belong to you but rather the trust, it often skirts the probate process and is not included in the overall estate taxes you may be expected to pay.
If you want to pass along a lot of money to your loved ones, you’ll want to look even deeper into establishing trusts that they can then assume control of once you’ve passed. These trusts could very well be the keys to their future financial destiny – it’s important that you use them properly.
Some people avoid estate taxes altogether by giving out some of their inheritance early on in the form of gifts – provided the gift does not reach a certain amount, then the gift will not need to be taxed. Many people also love to see their money and property enjoyed by their loved ones while they’re still around to see it, making this option an even more tantalizing one for those anxious to pass on their wealth but not especially anxious to pass on.