Putting your estate plan together is something that you might be tempted to avoid. Failing to get the plan together can be a huge mistake. Once you do get started with the estate plan, you must ensure that you handle it correctly.
One thing that you should avoid when you’re preparing your estate plan is titling any assets in the heir’s name right away. Once you title something in another person’s name, even your adult children, creditors can stake a claim to it to satisfy debts.
What can you do instead?
Instead of putting your heir’s name on something like the deed to your home, you can place the asset in a trust. An irrevocable trust can shield assets from creditor claims, which is beneficial in these situations. This is one option that can preserve the generational wealth that you want to pass down.
If you have assets that won’t go into an irrevocable trust, there might be other ways to handle them. Financial accounts, such as bank accounts, can be passed down using a payable-on-death designation through the financial institution.
As you’re exploring the options you have for these assets, you also need to think about the tax implications of each one. Taxes may take a major chunk of the estate so you should carefully consider the ways you can reduce the tax burden.
Making sure that your estate is handled so you can pass assets down to your heirs is crucial. Working with someone who understands your wishes and can help you to set things up accordingly can reduce your stress and ensure your loved ones are cared for.