People who own assets put considerable thought into choosing their beneficiaries. Whether it’s a spouse, child, grandchild, or other loved one, you want to be sure that your loved ones will receive what you want to leave to them after you pass away. Know that simply creating a will or trust and naming your beneficiaries is sometimes not enough. You also need to take steps to protect them from losing their inheritance to creditors, ex-spouses, or others.
Here are four tips that can help you better protect your beneficiaries in case something happens to you:
Don’t Procrastinate
Putting off your Estate planning basics is one of the worst things you can do for your beneficiaries. If you die without a will or trust, the state will decide how to distribute your assets. This could mean that your belongings could go to people you don’t want to have them.
It can also create a lot of confusion and chaos for your family. They may not know what to do with your things or how to access your accounts. If you have young children, the state will decide who will care for them.
Don’t put your loved ones in this position. Start planning your estate today, so you can be sure that your assets will go to the people you want them to.
List Your Assets, Debts, And Accounts
Before planning your estate, you need to know what you have. Make a list of all your assets, including your savings and investment accounts, real estate, vehicles, jewelry, and personal belongings. You should also list your debts, such as mortgages, loans, and credit card balances.
Once you have a complete list of your assets and debts, you can start working on distributing them according to your wishes. If you have a lot of debt, you may consider using some of your assets to pay it off. This can help reduce the money your beneficiaries will owe after you’re gone.
Write A Will Or Trust
A will is a legal document that dictates how you want to distribute your assets after you die. You can use it to name a guardian for your children, specify who should receive your belongings, and more. A trust is similar to a will but can offer more protection for your beneficiaries.
With a trust, you can specify when and how your beneficiaries will receive their inheritance. For example, you can set up a trust that will give your children access to the money when they turn 18. Or, you can create a trust to provide them with the money in installments over time. This can help ensure they don’t blow through their inheritance too quickly.
Review Your Beneficiary Designations Regularly
You may already have a few names you wish to serve as beneficiaries on your accounts. But as life goes on, things happen. People get married, divorced, have children, or pass away. Because of this, you should review your beneficiary designations at least once a year and update them as needed.
For instance, if your child gets married, you may want to add your new son-in-law or daughter-in-law instead. If you get divorced, you will need to take your ex-spouse off your accounts unless you have a specific reason not to.
If you have a grandchild, you may want to set up a trust for them and name the trust as the beneficiary of your accounts. This will help ensure that the money goes to their benefit, not their parents exploiting them.
You should also review your beneficiaries if you have any changes in your financial situation. For example, if you change employment, get married, have children, or retire. This way, you can be sure that your assets are going to the people you want and need to support. Moreover, you can consult a non-compete agreement attorney if you’re going for a new job.
Don’t forget to review beneficiaries for your 401(k)s, IRAs, life insurance policies, and other accounts. You may have different beneficiaries for each account, so it’s crucial to keep track of them.
Choosing the Right Trustee
One of the most important things you can do to protect your beneficiaries is to choose the right trustee. A trustee is the one who manages the trust after you die. You will need to name a trustee in the trust document if you have a trust.
This person will manage the trust assets and ensure they use them according to your wishes. They will also be responsible for paying any taxes due on the trust assets and filing the necessary paperwork with the court.
If possible, pick someone who lives in your state. That way, they will be familiar with state laws and able to manage the trust more quickly. It would help if you also considered choosing a professional trustee, such as a bank or financial institution. While they may charge fees for their services, they can provide additional protection for your beneficiaries.
Hire The Right Lawyer
When you’re putting together your estate plan, you need to hire the right lawyer. Find a reputable estate lawyer experienced in drafting trusts and wills. They will be able to help you create a plan that meets your specific needs and protects your beneficiaries.
An estate litigation lawyer can also help you with disputes over your will or trust after your death. They can represent your beneficiaries in court and ensure to protect their interests.
Consider using a lawyer who has already earned many notable accomplishments, such as publishing their work in a law journal or being quoted in the media. These are all signs that the lawyer is reputable and knows what they’re doing.
You should also feel comfortable with the lawyer you hire. This person will be handling sensitive information, so you must trust them. Ask about their experience, fees, and policies before hiring them.
Estate planning is crucial to ensuring that your loved ones are cared for after dying. By taking the time to create a plan and choosing the right beneficiaries, you can rest assured knowing you get to distribute your assets accordingly. Keep these tips in mind when you’re preparing your estate plan, and you’ll be on your way to protecting your beneficiaries.
