![]() ![]() Double-check who gets what from retirement accounts. Skip the potential mess and costly legal fees by setting up a trust to disburse assets to your child's guardian for the benefit of your child.ĥ. ![]() No financial institution will release that money, and your child's guardian will have to jump through legal hoops to wrangle access to the funds to care for your child. If you name a minor as a direct beneficiary of an inheritance or a life insurance policy, you've inadvertently messed things up for him or her. Laws prohibit anyone under the age of 18 from being able to directly inherit money or assets. Don't make young children the beneficiary of any asset. If your children are older, consider asking them to share what would mean the most to them.Ĥ. Even if your children love each other to pieces now, arguments can easily arise if you don't have everything spelled out. Do your family a huge favor by being as detailed as possible. Your great-grandma's wedding ring, the heirloom armoire, that cherished first-edition book collection-all of it should be itemized in a will. If a revocable living trust protects your major assets from probate, a will is where you carefully specify how you want your noninvestment possessions to be disbursed. Keep your IRA and 401(k) accounts separate from the trust, as they're governed by special rules (I'll explain more in step 5). In addition to your home, you want to put all savings accounts and nonretirement investment accounts into your trust. You are simply the trustee of the trust while you (and your spouse, or whoever else you designate) are alive when you die, your successor trustee can take over and follow your instructions without having to go through probate. You can sell your home or refinance your mortgage. Don't worry-you are still in total control here. For example, instead of a home's title being in Jane Smith's name, it would become part of the Jane Smith Living Revocable Trust. This process isn't as difficult as it may seem: To move an asset into the trust, simply change the title from your name to the trust's name. (A Will & Trust Kit is available on, with state-specific trust forms and other estate documents use code OWN.) For added peace of mind, you can then hire a lawyer for an hour or so to review the documents and make sure they address all your needs.Ī trust is simply an empty piece of luggage. Another, far less costly, option is to fill out the forms on your own. Hiring an estate attorney to review your finances and set up a revocable living trust can cost $1,500 or more, though it can certainly be money well spent. When you die, the person you designate as your successor trustee simply takes over and follows your wishes. You can always make changes to what's in the trust and to how you'd ultimately like it managed or disbursed. This isn't a tool reserved for the very wealthy: A revocable living trust allows your heirs to avoid probate entirely and keeps you in complete control of your finances while you're alive. And setting up a smooth inheritance isn't as hard as you might think. But let's reframe this: Estate planning is an important and everlasting gift you can give your family. I realize that the very mention of estate planning can be daunting and unsettling. You can avoid bequeathing that heartache and headache to your loved ones by setting up the essential documents so that when you die, your assets go exactly where you want, as quickly as you want, with the least amount of expense. ![]() This is known as probate, and the cost of this necessary judicial step can eat up more than 5 percent of your estate's value and ensnare your heirs for a year or longer in a legal tangle. If you die with only a will in place, the courts will have to give the document a stamp of approval before divvying up your estate. ![]() intestate), the courts will follow state law to disburse your assets-no matter what you may have once promised your sister or told your spouse. If you die with no will or trust in place (a.k.a. Yet ask anyone who has dealt with the estate of a deceased family member who didn't have solid plans in place, and they'll tell you how frustrating, time consuming, and expensive it is to get everything sorted out. The fact is, most Americans don't have a will, let alone a revocable living trust. But now consider this: Do you have your estate planning in place? If not, you might want to think again. I imagine you think these are absolutely absurd questions. Have you ever wanted to make life harder than it needs to be for your family and dear friends? Wished upon them a legal labyrinth to navigate or a steep tax bill to pay? Do you dream about the day your kids will have to anxiously wait for finances to get sorted out? How to make sure your assets pass to your loved ones exactly as you want-with the fewest possible hassles, taxes, and delays ![]()
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