If you are like most families, you want to keep your wealth with your loved ones. You do not want it to disappear because of taxes or because the wrong person wasted it. To keep your money with your family, you do need to take a few important steps, explains the U.S. News.
Your heirs could have to pay federal income taxes on retirement accounts, taxes on the estate and more if you do not handle estate planning now.
Do you have a will?
Most people know the importance of a will, but only 32% of people say they have one. If you do have a will, make sure to revise it often. Big life changes can impact your estate plan. For example, grandchildren or changes in your children’s circumstances may change your will.
Do you have a trust?
Not every person has a trust, but if you have many assets or wealth, you should consider a trust where a trustee distributes your assets to your heirs. Irrevocable trusts provide tax benefits and your beneficiaries do not have to worry about estate taxes.
Do you want to gift?
If you worry about your money ending up in the wrong hands, then you may want to consider gifting. In fact, some people prefer gifting because it allows you to see your heirs’ reactions while alive. You can give people up to $15,000 per year, according to the IRS.
The tax code changes all of the time and so it is important to revisit your estate plan regularly so that your money stays where it belongs.