To be able to pass down your money to your loved ones in the future, you first must make a comprehensive plan. Costly mistakes regarding your savings can hinder the hand off of wealth, and we want to make sure that your money is well handled and cared for properly by understanding the basics of an estate planning.
A Will or a Trust?
Your estate can be comprised of two main tools: a will and a trust. A will is what that comes into effect after you pass and outlines the distribution of your property to those who you designate ahead of time. A trust is more of a living document, where beneficiaries hold property and legal titles for a trustor, and in the time of their passing, trustees can essentially assume ownership while avoiding probate. Both are valid options and have their own sets of pros and cons and should be thoroughly discussed before you make a decision on behalf of your estate.
Know the Assets that Your Will Includes
Have you considered who will inherit some of your specific assets that do not appear in your will, like life insurance, annuities, and retirement accounts? To ensure that these funds are going to who they are meant to go to, you must name a beneficiary for each of these accounts to avoid payment to your probate estate, which may result in additional income tax. When naming beneficiaries for each account you should also remain diligent in the correctness of their written names and include all signifiers like Sr. and Jr. Updating your retirement account beneficiaries should also be reconsidered in the event of marriages, divorces, or the birth of a new child or grandchild!
Communication Regarding Assets
When finalizing either your will or your trust, it is important to properly communicate with the eventual beneficiaries of your estate. Having a conversation with a younger generation about finances, investing, diversification, and rebalancing can be extremely helpful for when they come into a new source of inherited money. Explaining the decision-making process, terms, and appointed trustees behind your will or trust to your loved ones is also important to their understanding of what will happen and what to do when the time comes.
Our mission at Moore’s Wealth Management is to help you create a comprehensive and smart retirement blueprint that encourages the strategic planning of your assets. We want to help you create a financial plan, tax minimization strategy, and estate proposal that will seamlessly work together, and leave the future generations of your family with peace of mind. Click here to schedule a time to speak with us!
