So, you’ve achieved substantial wealth after working many years to build your assets, and as a hard-working person who has just retired, you may think the journey has now finished. But when it comes to passing on your assets and estate, you should be mindful of a couple of critical methods. Estate protection is the next part of your journey. So, which methods are important, and why should you protect your assets? We’ve covered the crucial information you need in this article, including why free last will and testament documents are important.
Why Protect Your Family Estate in Older Age?
The main reason you must protect your assets in older age is to protect your family’s future. Your inheritors are the ones who will receive the family estate you have worked so hard to build, and there are some circumstances in which your estate may be listed in a will that must go through a complex probate process. This is why protecting your family estate in a will is important.
Alternatively, if you don’t include your estate in a will or draft a will, you will pass away ‘intestate,’ which can lead to further complications when passing on your estate.
What is probate?
The term probate refers to a process in which a will must be validated or proven in a court of law. The process involves administering a deceased person’s estate and organizing their assets and possessions.
What does ‘intestate’ mean?
Passing away ‘intestate’ means dying without a will. If you pass away ‘intestate,’ this means there’s a chance you won’t be able to hand your estate and assets down to the people you had in mind. The law will determine who should handle your estate in situations like these. To avoid these outcomes, you have five methods to protect your family estate in old age.
5 Methods to Effortlessly Protect Your Family Estate
So, which five methods should you consider to effortlessly protect your family estate? Here are the most important ones to think about.
1. Writing a will
Ensuring you have written a will that stipulates who you want to pass your estate to is the best way to protect your estate. You can begin writing this legal document anytime and then ensure you get it notarized.
When you have written a will, keep one copy with you, safely stored, and one copy with the notary after ensuring it meets the required conditions. It’s also crucial to make frequent amendments to the will and review it regularly.
2. Avoiding federal estate tax with gifts
Unfortunately, in many situations, the value of your estate can be lower than expected due to federal estate taxes. Now, federal estate tax comes into effect if your estate value is more than $12.060 million, or $24.12 million if you’re a couple, but there is a way to avoid federal estate tax – giving gifts to your family.
Remember, you can give unlimited gifts to family members if you want to avoid federal estate tax. Make sure you continue giving gifts until your estate value is under the threshold of $12.06 million.
3. Making donations to charity
Looking for an additional method to get the federal estate tax break? One approach you may consider is making donations to charity. Ensure you create a charitable lead trust, which will mean you can transfer assets continuously to your charity, and the assets that remain when you pass away will go to your beneficiaries.
You may also find that you can mitigate capital gains tax by transferring appreciating assets to irrevocable trusts. As you gain funds from the asset, the investment will go to the irrevocable trust. This will help you avoid capital gains tax.
4. Making a wise investment
When it comes to protecting your family estate, there’s another method you may consider – making wise investments is a good option. It’s one of the best alternatives to storing your money in a savings account.
Make sure you work with an expert investor to ensure you’ve made the best investment and that your funds will keep increasing in value. This method will mean your beneficiaries can withdraw the funds intermittently or work with your expert investment advisor to maintain the investment arrangement.
5. Choosing a life insurance policy
Your next option for protecting your family estate in older age involves choosing a life insurance policy. One crucial advantage of this method is that a life insurance policy will help your loved ones pay for funeral costs.
How can you establish a life insurance policy and split your life insurance amount from your other assets? You must first select a trustee and then name the trust beneficiaries. Finally, you can establish how much each beneficiary will receive.
Effortlessly Protect Your Family Estate In Older Age
Although your journey to create a family estate is over, protecting it in your later years is still vital. The critical points you shouldn’t forget when protecting your family estate in older age are these. It’s important to ensure you have a will and continuously review it in older age to avoid any complex probate or intestate issues. Then, you can implement the other methods listed in this article to reduce tax burdens for your beneficiaries or avoid tax burdens by making investments.
Effortlessly protect your family estate in older age to make the transition easier for your inheritors and beneficiaries with our top five methods.