If you are looking to pass your assets to your children, there are some excellent ways to start planning right now so that you can ensure your children won’t have any problems when you are gone. Even better, you can ensure that the assets you pass on are used properly and to your liking, if that is important to you. While everyone wants to live until their children are old enough and mature enough to responsibly handle their money, that isn’t always the case. Sometimes, estate planning means helping children grow up and get established.
The truth is that there isn’t a “one size fits all” solution to passing assets on to your children. Some people choose to establish trusts, whereas others just give more substantial sums of money or expensive items away now.
The answers to these questions depend on a variety of factors that you may want to consider. It can include whether you are married, how old your children are, the value of your estate, and whether or not you want to control how your assets will be used.
Regardless, what are the best ways to pass your assets to your children? Here are some of the best options:
Give Financial Gifts While You’re Living
If you talk to your accountant and you have enough money to live out the rest of your life and can still give financial gifts while you are living, you may want to consider it. Not only will it help them to save a bit of money on taxes, but it also allows you to see your money being used and enjoyed by your children. This is a luxury denied to many, and if possible, it is something to consider.
In particular, it is certainly something to consider for those who do not expect to use up their own money. You will want to do some planning and ensure that you have more than enough funds left over in case something goes wrong with your home, health, or business. Keep in mind that there are rules and regulations about giving financial gifts. You can only give a certain amount of money before it does have to be taxed.
Put The Money Into Trusts
A trust is a fund that is managed by a trustee for the benefit of a particular beneficiary. The most common trust is established for children who have parents that pass away before they turn 18. These trusts are then used to pay for a child’s expenses until they turn 18, at which time they will gain control. You can also establish some other precedent for which the child will gain full control of their money, such as graduating college or reaching a certain age.
Trusts can be extremely beneficial if you want to manage tax implications and if you have a large estate. They can also be established for a loved one who has a disability. These trusts require care and consideration so that they do not interfere with or compromise governmental assistance.
Talk To An Estate Planning Professional
Many people aren’t comfortable talking to an estate planning professional because they think it is a somber occasion that means they are near the end of their lives. However, for anyone that has a business, children, or loved ones that care about them, estate planning is necessary. You will be able to save the people in your life a lot of stress and confusion after you have passed. In fact, you may be able to quell fights that so often break up families and businesses.
It is never too early to start estate planning, even if you don’t have a great deal of money in your savings. Make sure you work with a professional that has your best interests in mind and can work with you to not only protect you while you are alive but to help preserve your legacy once you have passed.
To get started, schedule an appointment today.