Use Your Power of 6 Wisely!

Learn the six ways to ensure gifts and property reach the right people.

Ignorance is bliss. 

Not when it comes to your estate planning. One of the essential items to consider when creating your estate plan is how to pass property to others. 

What is the best, most efficient way to get assets in the hands of people of your choosing?

Below you’ll see the list that gets you moving in the right direction.  Some property types are more suited to be used in a particular vehicle than another. 

Knowledge is power. 

Read on to break through the anxiety. See how each choice works within your estate plan. 

Gifting

Giving property now, today, can help to avoid some drama. Plus, you’ll have the chance to see the gift enjoyed—this the opportunity to be bold in your gifting giving. To give guidance to the giftee, you can share and guide the individual in the direction of your values. 

Are you giving cash? Show how a saving or checking account works. Have a business to convey?  A company has shown to be more successful if your heirs have an opportunity to work alongside you.  Are you gifting real estate or a family home? Owning real estate can be a huge responsibility. Maintenance, insurance, taxes - all of these things need to be managed. It makes sense to give the asset in the present(in certain situations).  Don’t restrict yourself to just family-- a gift to friends, co-workers, or even charity is fair to give. The benefit of gifting is an opportunity to share a long-term vision and witness people enjoying the gift today.

Intestacy 

When a person dies without a will, intestacy laws will be applied as their family goes through probate. Every state has default estate plans for its constituency. 

How it works - If you die with a will, your state has one for you. The state’s program may or may not align with your wishes; nevertheless, this is the default. 

Many people want to avoid the probate court, which I seek to achieve for clients.  Intestate laws were not written with today's family dynamics.  Depending on the state’s default plan, this may wish. Keep in mind that probate court can be time-consuming; heirs may not be able to receive any of your property from your estate for some time. Also, If you die intestate, you will not control which heirs will receive your property. 

Beneficiary designations

Naming your giftee outright can be done by completing the appropriate documentation depending on the asset. This option doesn’t take a lot of skill, but you have to be proactive. You can change this as often as you would like. It always a good idea to check with your advisors, accountant, financial advisor, attorney to ensure that no tax consequences will occur with this decision.

Types of assets associated with beneficiary designations are:

• Retirement accounts

• Life insurance

• Bank accounts

Jointly Owned Property

Two or more people can have ownership of real estate property.  In some cases, when one of the property owners dies, the property will pass on to the other owners equally. There is no need for probate. 

Pro tip- be cautious of naming others as joint owners. Real estate deeded jointly can be opened to the creditors or the spouse of its owners. 

Will

The brilliance of creating your will is knowing in advance a significant part of your estate plan is complete. You can make specific requests and gifts and override the state’s estate plan. Having a will does not avoid probate, but any feelings of powerlessness are lessened because your will can make the process a lot easier for your family as they navigate the probate court.   

Trusts

There are many different types of trusts, but you must fund your trust to serve its purpose. Don’t know what “funding” is? I will share it in a later post.  For now, know trusts work similar to your will, but with one fine distinction, it is private. NO PROBATE COURT! 

Pro-tip - Create a trust to disperse monies or assets over time. For example, spread $100,000 from a life insurance policy into equal installments. (i.e. age 25, 30, 35).

There you go - THE POWER OF 6. Put your clear thinking hat on and dare to move forward. 

If you enjoyed this post, I’d be very grateful if you’d help it spread by emailing it to a friend or sharing it on Facebook or Instagram.

~ Tenicia Moulden 

Moulden Law Blog is made available by the lawyer for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site, you understand that there is no attorney-client relationship between you and Moulden Law. Moulden Law should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.