Estate Planning: Streamlining the Transition
Planning the transition of your assets isn’t just about maximizing what you leave behind. It’s about making sure the help, love, and guidance you provide today can continue even when you are no longer here. A thoughtful plan looks ahead and clears obstacles just like you would if you were still present.
If your assets have to go through the court system, called probate, it creates a public record of your financial information and personal family details. Fortunately, there are ways to avoid this lengthy, expensive, and public process.
Some strategies involve working with an attorney to build the right legal documents. Others can be set up with your financial advisor to help your accounts transfer seamlessly and cost-effectively when the time comes.
There are three core elements to building a smooth transition plan:
• Asset-based strategies to avoid probate
• Wills
• Living Trusts
Minimizing Probate
Probate is the court process that authenticates a will and appoints someone to collect assets, pay debts, and distribute what’s left. It can be slow, costly, and public.
Assets like life insurance, IRAs, 401(k) plans, and annuities that allow you to name a beneficiary can pass outside of probate, helping your loved ones access them quickly.
Co-ownership, if structured properly as Joint Tenants With Rights of Survivorship (JTWROS), can also help. This applies to homes, bank accounts, brokerage accounts, cars, and more. On the death of one owner, the surviving owner assumes full control, often with just a simple affidavit and a death certificate.
This can work especially well for a family home or financial accounts. Just keep in mind that co-owners have equal rights to control the assets.
Wills and Living Trusts
A will is the most traditional estate planning tool. It lets you control how your assets are distributed and name guardians for minor children. The downside is that wills must pass through probate.
A living trust, by contrast, avoids probate. It lets you maintain control of your assets during your lifetime, while making it easier and faster for your beneficiaries to inherit after you pass. A living trust costs more to set up and must be funded with your assets, but it can offer speed, privacy, and a smoother transition.
Depending on your goals, a living trust may be the right choice, but even with a trust you will still need a simple will to cover anything left outside the trust.
The Bottom Line
You have worked hard to build a life you are proud of. Taking a little time to plan ahead ensures that your care for your loved ones continues when it matters most.
If you would like help building or reviewing your estate plan, reach out to start the conversation.
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The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
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