Summer is here and you’re getting serious about that “to-do” list you accumulated (and ignored) when the snow was on the ground; and there it is: “GET WILLS DONE”. It is an item that has been on your to do list for months, or even years, but you just keep avoiding it. Well, let’s get to it!
Most people know that you can use a will or trust to distribute assets, select an administrator (executor) for the estate, and determine who will raise the kids and manage their inheritance. But here are two things you may not know wills can do for you:
1) Avoid Probate
Probate is the process by which the state supervises the administration of your estate. It applies to most people, is costly and time consuming. During that time, there are restrictions on your executor’s ability to make monetary distributions.
Fortunately, there is an alternative: a Revocable Trust, also known as a living or inter vivos trust. With a revocable trust, you place your assets into trust now and completely avoid probate later. Unlike other trusts, the revocable model does not affect your taxes and has very little impact on your day-to-day life.
2) Protect your kids from themselves (no matter how old they are)
Parents worry about their kids blowing through their inheritance quickly and on frivolous items. You can protect against this concern by designing your will or trust with triggers (dates or ages) for the distribution of each child’s inheritance. For example, you can designate that your kids get lump sum distributions of their share at specific ages (eg: 25, 30, 35) or for specific purposes. These restrictions are not all encompassing, as you will also appoint a trustee with authority to distribute parts of the inheritance at any time for legitimate reasons, such as summer camp, education, first house, or first (non-sports) car.
Get a big item checked off your to-do list and get that estate planning done!
For more information on Estate Planning visit our site or call us at 952.358.7400.
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