Estate Planning Tips To Keep Your Money With Your Loved Ones


By Kyle Rutten with Brestel Bucar

In managing your estate and keeping wealth in the family, it’s easy for things to go wrong. This is especially the case if the correct documentation is not in place or your desires are not clearly outlined in these documents. Luckily, this is avoidable so long as you give your estate plan proper attention. 

By applying these estate planning tips to your unique situation you can remove worry, gain confidence, and keep your money with your loved ones long after your death. 

Know the Difference Between a Will and a Trust 

A fair amount of people cannot easily differentiate a will from a living trust. When managing their assets, they may not have the best solution for them in place. Knowing the difference between a will and a trust allows an individual to make the best decision for their estate so that their wealth is both accessible and easily distributed based on their exact wishes. 

A will is a document that outlines what should happen with your assets after you pass. It also includes critical details such as your appointed executor, who will become the guardian of your children, how you’d like outstanding debts and taxes to be paid, and from what financial accounts both will be paid from. 

With a will in place after your death, the executor can then pay any debts or taxes that remain in your name and distribute your assets to the listed beneficiaries. 

A trust, although similar to a will, appoints a trustee to manage and distribute your property instead. Essentially, the trustee takes the place of the executor in interfacing with probate courts. This means that any property listed in a trust does not go through probate court, saving your loved one’s time and money. 

A trust is a great option if you have a sizable estate or are concerned your beneficiaries won’t be wise with their inherited money. A living trust allows you to create certain stipulations, providing you with more control over your wealth. To prevent your property from entering probate court, and to clearly define conditions as to how you’d like your assets distributed, a living trust is a better option than that of a will. 

Keep Your Designated Beneficiaries Up to Date 

A beneficiary is someone you’ve named in your will or living trust and is the recipient of certain assets after your death. Assets a beneficiary may inherit vary; a specific financial amount,

property such as your home, car, or collectibles, or the funds stored in your retirement, checking, and/or savings accounts. 

As your life moves through changes, you’ll want to make sure that your named beneficiaries are up to date and your estate documents reflect the changes that have taken place. Meaning, if you move, lose an asset that’s currently listed in your will, get divorced, or have children, your will or living trust should reflect those changes. 

Additionally, bank accounts in your name should have current transfer on deaths in order. A transfer on death names someone who can access your accounts without the intervention of the probate court. If your insurance policies, bank account TODs, and beneficiaries reflect your most current situation and loved ones, your executor or trustee will have an easier time fulfilling your requests and be saved from potential contestation. 

Gift Your Money Over Time 

Estate taxes are paid prior to the distribution of assets and these taxes can be costly, decreasing your estate value dramatically. As of 2022, the Internal Revenue Service permits an individual to gift up to $15,000 per person, per year. Gifted funds are tax free for recipients, thus, funds moved out of your estate are not subjected to any taxes. 

That all being said, the current tax exemption conditions expire in 2025. There are also scenarios where certain assets are better transferred after your death rather than before. Such assets are ones that appreciate in value; your home, stocks, etc. Thus, the taxable amount of such an asset will be adjusted upon your death. 

In order to determine which assets are best to gift while you’re alive and which to transfer after your death, speak with a tax or estate planning professional who can look into your wealth portfolio and determine gift-appropriate assets. 

Discuss Your Wealth Creation With Your Heirs 

Estate planning attorneys see a lot of families make the same financial mistakes time and time again. One of the most common mistakes seen is older generations not teaching their children or beneficiaries about how the wealth in the family was created in the first place. 

When beneficiaries do not understand what it took for their family to create wealth, and how to manage their finances wisely, their inheritance is often spent before habits can be changed or their accounts run dry. Do your heirs a favor and inform them of the actions that were taken in 

order for you to steward your assets. Such discussions allow for a transparent dialogue, where your beneficiaries can ask questions and learn from your financial accomplishments or mistakes.

These conversations not only better arm your heirs with their own ability to manage personal wealth, but their potentially naive view of money will not affect what happens to your assets after your passing. 

Work With An Estate Planning Attorney 

Because your needs and desires are specific to your given estate and designated wealth status, the tactics implemented to keep your money with your loved one’s may vary. An experienced estate planning professional can help you navigate the options available, guiding you to make the best decisions for your family and for the future generations to come.

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