Focus on Finance

Traveling down the right path to protecting your assets with estate planning is one of the most important trips you’ll ever make in life. Not surprisingly, it can lead to a number of rewarding directions. It presents you with a plan that can eliminate any confusion among loved ones about your wishes for your assets and offer them the peace of mind they deserve. With a solid roadmap in place, it provides you with more control over your family’s financial destiny.

While estate planning may not be easy to think about, it’s something that must be taken seriously. It helps give purpose to what you’ve accomplished in life and allows you to be remembered the way you want. You’ve worked hard to accumulate your assets, so it makes sense to create an estate plan to help preserve them. If you own assets such as a car, home, mutual fund, or retirement plan, you should consider an estate plan; it’s not just for the wealthy.

There are a number of ways to leave property to those you love. The following estate planning strategies will give you a general idea of some possible solutions to your estate planning, thereby helping to ensure your assets will be available to future generations. 

• Trusts under will. Drafting a will is a simple and effective way to make sure your assets will be distributed according to your wishes. However, relying solely on a will may not be the best way to protect your family, especially if your heirs aren’t experienced in handling substantial assets. Imprudent investment decisions could jeopardize your family’s future financial security. You can guard against these risks by establishing a trust under will. With a financial institution as your trustee, you can be certain your assets will be managed according to your wishes by professionals. 
  
• Revocable living trust. Another alternative is to establish a revocable living trust. As its name implies, this type of trust is one you create during your lifetime, and you can amend or terminate it at any time, for any reason. The trust can benefit you, your spouse, or any other person you choose. Your trustee or co-trustee will manage the trust portfolio or you can retain investment control, arranging for a professional trustee to take over if there’s a future need. A revocable living trust also can be used to unify your estate plan. For example, you might make your retirement benefits or life insurance proceeds payable to the trust. Similarly, your will could provide for certain assets to pour over into your trust to be managed under its terms. 
  
• Charitable remainder trust. Say you want to donate some of your assets to charity, but you would also like to see the income from those assets go to yourself, someone in your family, or another beneficiary for a certain amount of time. A charitable remainder trust will allow you to do that. When you set up the trust, you can designate yourself or any other person to receive income from the trust for life or up to 20 years. Your designated charity will receive the remaining assets at the end of that time period. 
  
• Gifts to children and grandchildren. You can give gifts of up to $11,000-$22,000 if you and your spouse split the gift-to as many individuals as you wish without federal gift-tax consequences. Making lifetime gifts to your loved ones reduces the value of your estate-and your potential estate-tax liability.

It’s never too soon to plan for tomorrow. You’ve worked hard to accumulate your assets that can be passed on to your children and other loved ones. Don’t wait to develop an effective estate plan that will provide a solid roadmap to ensure your loved ones are provided for. Start now. TPW