Leaving it all to your kids when you head to the big eternal party in the sky? 👼💸 Think again!
While it's common to add your kids to your will, experts say you should pay attention to the rules. ⚖️ In many cases, leaving money or assets directly to your children may also leave them with legal hassles and headaches.
Here’s Five Fast Facts on inheritance and how to get your affairs in order:
- 😎 Just Trust Me - One California attorney strongly recommends against leaving things for your kids when you pass away. Instead, she suggests placing your assets in a trust and making your kids beneficiaries.
- 👎🏼 Probate Problems - Unlike a standard will, a trust saves your kids from going through probate. Probate is a court-supervised process of distributing your assets after your death. This process is often expensive and very looooooong.
- 🏡 The Tax Man Cometh - The attorney also poo-poos adding your kids' names to the deed on your house. Doing so might trigger a property tax reassessment. If your property has appreciated, your property will be reassessed at that date and you may be on the hook for more property taxes.
- 🙇 Minor Issues - Think twice before adding minor children as beneficiaries. In some states, minor children aren't allowed to receive inheritance money until they turn 18. If you pass away and your beneficiaries are still minors, a court-appointed conservator would have to manage the money until they're of age. Instead, put your life insurance accounts in a living trust and name your minor children as the beneficiaries.
- 📑 Get Your Plan On - No one likes thinking about kicking the bucket, but experts recommend getting your estate plan set up ASAP. Having one in place means less stress for your loved ones in an emergency. Even though the pandemic caused an uptick in estate planning, an estimated 66% of American adults still don’t have a will.
🔥Bottom line: On a scale from one to Avril Lavigne, deciding how to handle your will and estate can feel 🎶so complicated🎶. Luckily, there are plenty of free resources out there to help you get started. Check out this article about trusts to learn more about setting one up. Worried about making a mistake on your will? Have a peek at this article.
Do you plan on leaving anything to your kids?
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