3 Simple Solutions for Taking Care of Your Estate and Your Family

Let’s face it. Most of us own a lot of stuff and have a lot family members.  And most of us want to ensure that both are taken care of when we’re gone.  The problem is, most of us also assume the family members we leave behind will do that for us.

Don’t assume such things.  Trust me.  I’ve seen countless families tear each other apart fighting over “who gets what and why.”  But this scenario doesn’t have to happen to you or your family.

Here are 3 simple solutions for taking care of your estate and your family all at once.

1. Create A Will

This is probably the most common way to take care of your estate and your loved ones.  Plus, it all fits neatly into one document-your last will and testament.

A will is a legal document wherein you provide instruction on how you’d like your property distributed at your death.  In my humble opinion, this is a document everybody needs to have.

Here’s how it works:

  1. Think of all the property you own right now.
  2. Think of who you’d like to give that property to if you could no longer have it.
  3. In your will, you simply list the property that you own and indicate who you want to have it.

That’s it.  Pretty simple right?

The great thing about a will, and the reason it is such a popular estate planning tool, is that it doesn’t become effective until your death.  This means that while your’e still living, you’re free to do what you want with your property.  You can sell it, improve it, destroy it, give it away, etc.

2. Create A Trust

A trust is another excellent estate planning tool.  Especially for those of us who are relatively wealthy.  Let me explain a bit.

A trust is very similar to a will in that you’re providing instruction on how certain property is to be distributed.  The main difference with a trust, however, is that a trust becomes effective the moment it’s created.

Here’s how it works:

  1. Think of person you’d like to name as the beneficiary of your trust.
  2. Think of the property that you want to place in the trust for the benefit of your beneficiary.
  3. Think of a person, who you know and trust preferably, that you want to be Trustee.
  4. Give your Trustee instructions, in the trust, as to how you want him/her to manage the trust property.

Because trusts become effective upon creation, they’re excellent tools for avoiding potential federal estate taxes (again, if you’re relatively wealthy).  On that same note, however, because trusts become effective upon creation, you’ll have to give up some or all control over the property you place in trust.

Oh, and did I mention that trusts are also excellent tools for avoiding probate!!!

3. Reserve A Life Estate

Another great means of taking care of your estate and your loved ones is via the life estate.  A life estate is a type of ownership in real property (i.e., land, home, etc.) that automatically terminates upon your death.

Here’s how it works:

  1. Create a dead (either a quit-claim or a warranty).
  2. List the name(s) of the person(s) receiving the property.
  3. Reserve a life estate in the deed itself.

Transferring property via deed while reserving a life estate allows you to give property away but still be able to use the property during your life.  Upon your death, the property automatically transfers to whomever is named in the deed.  Thus, you avoid probate as to the property transferred through the deed.

Reserving a life estate is also an effective way of taking property out of the reach of creditors.

Those are just 3, very simple solutions for ensuring that your stuff and your family is taken care of after you’re gone. If you have any questions or concerns about your stuff and/or your family, drop us a comment and we’ll discuss it together.

Good Legal Health.

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