Let’s face it, we know thinking about what happens after you die isn’t something you necessarily want to think about or talk about. With the “greatest wealth transfer in history” in our midst, it’s important to know what happens to your assets when you die and how you can properly plan for them to stay in your family and build or keep building on generational wealth for your loved ones. Don’t you want everything you’ve worked for to stay in the family? Not only making sure your money goes to them, but that transition is smooth and avoids as many taxes as possible. Here are some estate planning tips for keeping your money in your family.
Have a Current Will
One of the main protections that estate planning offers is to help your loved ones avoid the probate process after you pass. Probate is a public process that takes time and money, and ultimately can be avoided so your loved ones don’t have the extra stress during their grieving your loss. Probate can also cut into the potential inheritances you are leaving, or may appoint your assets to the wrong people. This can be avoided by having a current will. A will designates your wishes for the distribution of your assets after your death. So having an updated will with your current assets and correct beneficiaries will keep your money in the right hands.
Plan for Estate Taxes
Estate taxes can be tricky. There are many strategies to help you plan to leave as much as possible to your family while minimizing taxes. Consulting a professional to guide you through the best strategy for your situation is always best, as the laws potentially change, but creating a trust-based estate plan is one strategy to help minimize taxes and plan for a smooth transfer of assets. Another is to consider gifting parts of your wealth while you are still living. Keeping in mind the gift tax, you can plan to give your loved ones parts of their inheritance while you are still alive to help minimize the amount of taxes when your entire estate is disbursed after your death.
Double Check Your Beneficiaries
You may have set up your IRA or your life insurance policy decades ago. Do you need to update your beneficiaries? Remember that your will may not be able to invalidate your retirement account or life insurance beneficiaries, so make sure the right people are set up to inherit these. If you’ve been divorced, or have had children, or even a change of heart in who you originally chose, keeping this information updated will ensure your money is going to the right people.
These are just a few tips to help you build generational wealth and keep everything you’ve worked for in your family. If you live in Illinois or Wisconsin, we are happy to help guide you through the process and create the best plan for you and your family. Send us a message with your questions or to learn how to get started.
Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.