The best way to proceed would be to discuss everything with a licensed estate planning attorney. If you do consult with an attorney, there are some basic questions that you may want to ask, and we will provide a few of them in this post.
Should I use a will to transfer my assets?
In some cases, a last will would be sufficient, but in others, you may be better served by using a different vehicle of asset transfer. The best course of action will vary depending on the circumstances.
One thing to understand about a will is that it must be admitted to probate. The heirs to the estate do not receive their inheritances until after this process has run its course, and it can be quite time-consuming.
Plus, you are limited when it comes to the inclusion of stipulations.
Can a person who is not extremely wealthy benefit from a trust?
The answer to this question is yes. As we touched upon previously, a will must be admitted to probate.
There is a type of trust called a revocable living trust that can be used to facilitate asset transfers outside of probate. You don’t have to be wealthy to benefit from a living trust.
Are inheritances subject to taxation?
There is a federal estate tax that is applicable in every state. Every estate is not subject to the tax, because there is an exclusion. In 2014, the exclusion is $5.34 million, but it is going up to $5.43 million next year. If the value of your estate does not exceed the amount of the exclusion, you don’t have to worry about the estate tax at the present time.
On the other hand, if you are exposed, you can take steps to ease the burden.
My son is not a good money manager. Is there any way that I can make sure that he does not burn through his inheritance too quickly?
In a situation like that, you could use a spendthrift trust. You name a trustee who would handle the trust administration tasks, and your son would not be able to access the funds directly. The trustee would follow your instructions with regard to monetary distributions to your son.
This type of trust would also provide asset protection. Your son’s creditors would not be able to attach assets that are contained within the trust.
Estate Planning Consultation
We have provided a little bit of food for thought in this post. If you would like to have all of your questions answered, send us a message through this page to set up a free consultation: Grand Forks ND Estate Planning Lawyers.