How To Structure Your Estate So Your Heirs Avoid A Financial Headache

Authored by Javier Simon via The Epoch Times (emphasis ours), Andrey_Popov/Shutterstock When you leave this earth, you want to make sure your loved ones are taken care of and that you leave behind a cherished legacy. But without a plan, you can leave your family with some serious headaches . That’s why it’s important to take some steps today to make sure this doesn’t happen. Let’s take a look at some options. Andrey_Popov/Shutterstock Consider a Living Trust Without a proper plan dictating how you’d like your assets distributed after your passing, your estate-that is, everything you own-would need to go through a court process known as probate to determine who gets what. This can take months and even years. And with it can come hefty court fees and other expenses. Plus, it’s all public record. But you can bypass this with a revocable living trust. As a trust grantor or creator, you can transfer various types of assets into a trust, such as cash, real estate, and investments. In the trust document, you can clearly outline how you’d want your assets distributed and under what terms. As trustee, you can also manage the assets in your lifetime or appoint someone else. In addition, you can appoint a successor trustee to manage and distribute assets based on your direction. A living trust doesn’t go through probate. And because it removes assets from your estate, it can potentially shield you from the estate tax. Update Beneficiaries Certain accounts such as retirement plans can allow for beneficiaries that you may list when you open the account. This holds a lot of weight. In fact, it overrides wills. But as time passes, your intentions may change. Maybe you set your spouse as a beneficiary, but a divorce may have you thinking you’d want to change beneficiaries to someone else, such as your child. But if you don’t act fast, the initial beneficiary designation stays. So you may want to review beneficiary designations periodically to make sure they still align with your wishes. Set Up a Durable Power of Attorney Nobody likes to think about it, but anyone can become incapacitated at some point in their lives. This is why it’s important to establish a durable power of attorney . This individual, also called an agent, can step in to legally handle your financial matters should you become mentally incapable to do so. This agent also can oversee assets that don’t typically fit into a trust such as retirement plans. In the durable power of attorney document, you should clearly outline your agent’s responsibilities, powers, and limitations. But, overall, you’d have someone competent to continue managing your finances for the benefit of your loved ones. Write a Will Although a trust can open the door to a smooth distribution of your assets and avoid probate, a will can still come in handy. More importantly, it allows you to designate legal guardians for any minor children. It also can provide guidance for personal items or assets...

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