What’s in your estate plan? Do you want to leave money to help your children pay for college? Or do you want to help your child retire comfortably? Perhaps you simply want to leave a nice windfall for those who are most important for you.
A will is a powerful tool that can help you accomplish many of your estate planning goals. If you have specific instructions on how you want to distribute your estate, you may even want to create a trust.
It’s also possibly, though, that you may want to gift some of your estate to your heirs while you’re alive. The idea of early inheritance is becoming more popular. A recent Merrill Lynch study found that 60 percent of people over the age of 50 prefer to give assets away early rather than after death.1
Obviously, a gifting strategy can have clear benefits for your heirs and loved ones. But it can also be beneficial to you and your estate. Below are a few reasons why you may want to make gifting a part of your estate strategy:
You can assist your loved ones today.
One of the most obvious benefits of early inheritance is that you get to see your legacy put to use. A traditional inheritance distributed after your death may be welcome by your heirs, but you won’t get to see how it impacts their lives.
It’s also possible that your legacy may be more urgently needed today than it will be in the future. Perhaps your grandchild is entering college and needs help paying tuition. Maybe your grown children could use the money to shore up their retirement or pay off debt. Maybe you’d just like to help them reach some big financial goals. An early inheritance can help you help your loved ones while you’re still alive.
You can simplify the distribution of your estate in the future.
When you pass away, your estate goes through probate, which is the legal process for settling any outstanding financial issues. Probate includes activities such as notifying potential heirs, paying outstanding debts, filing a final tax return and more.
Depending on the complexity of your estate, probate can be time-consuming and costly. Your estate may need to pay legal fees, administrative expenses and professionals like lawyers or accountants. The assets could be tied up for months while these issues are resolved. That could delay the distribution of your assets to heirs and ultimately reduce the amount of the inheritance.
However, you may be able to reduce the amount of assets that are tied up in probate by gifting them before you pass away. The assets are no longer part of your estate and thus aren’t subject to probate. You may want to consult with a financial professional, however, as some states look back to include recent gifts in the probate process.
Ready to see how an early inheritance could work as part of your estate plan? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you review your needs and goals and develop a strategy. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18274 - 2018/11/27
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