Many individuals worry about what will become of their property at their death, and the good news is that you can, by and large, control what becomes of it through estate planning. You don’t have to wait until later in life until perhaps you’ve amassed significant wealth to document your wishes for the disposition of your assets in a will or to fund trusts, for example. You can put in place an estate plan right now so that you can rest comfortably knowing everything is clearly documented or set up in alignment with your preferences.
Below are some of the steps you can take to protect your assets after your death and make sure they go where you intend.
Draft a Will
The 2023 Wills and Estate Planning Study by Caring.com shows that only 34% of Americans have taken the time to create an estate plan. While it’s most likely that those who have created at least a will, that statistic lets us know that at least 66% of Americans likely don’t have one, which is certainly concerning. Why?
A will, among other things, allows you to document what you’d like to happen with your property upon your demise, whether that’s your sentimental heirlooms that have been passed down through the generations, your car, social media accounts, cash on hand, etc. Thus, as you can likely read between the lines, having a will in place can protect your assets from ending up in someone else’s hands other than who you intended.
Fund a Trust
Some of the reasons individuals fund trusts as part of the estate planning process are minimizing their state or federal tax burden, preserving a person’s access to government benefits, protecting their assets from creditors, and exerting more customizable control over the distribution of them. There are many different types of trusts to choose from, including revocable and irrevocable ones, each with its own purposes, pros and cons, which you’ll want to discuss with a Raleigh estate planning attorney like ours at Wilson Ratledge, PLLC, to ensure they protect your assets as you intend.
Engage in Business Succession Planning
Your company’s organizational structure may play a role in dictating what happens with your business after your death and also impact taxation. As for the former, a limited liability company (LLC) or a partnership should have an operating or another type of agreement in place spelling out plans for the company after your death and to have a contingency plan in place if you become incapacitated. Engaging in business succession planning, which includes identifying and grooming a future leader for success and documenting your plans for your family to continue to benefit from this valuable asset, is a critical component of estate planning.
Consider Gifting Assets While Alive
Per the Internal Revenue Service, an individual can transfer most gifts up to $18,000 for 2024 to someone else without any taxes being incurred. This provides an opportunity for you to pass assets that your loved ones can continue to benefit from after you’re deceased while you’re still alive.
Life insurance can be a great way to mitigate the effect of income or estate taxes, or unequal distribution of assets at your death (for example, if not all of your children will participate in a family business or if certain assets will benefit only some of your beneficiaries). Our estate planning attorneys can help you use an irrevocable trust to keep life insurance proceeds from adding to your taxable estate.
Appoint a Beneficiary of Bank Accounts and Other Assets
In some cases, it may be beneficial to name someone as the person who will receive certain assets directly by beneficiary designation at your death. This option is available for many assets, like bank accounts and real estate, not just life insurance and retirement accounts. Our estate planning attorneys will help you not only draft your estate planning documents appropriately, but will also review your assets and how they are titled, and discuss opportunities outside of the documents to achieve your objectives.
How an Estate Planning Attorney Can Help You Preserve Your Assets for the Future
The fact that you’re thinking ahead about how estate planning and other proactive measures can protect your assets from taxation and creditors and avoid the often-complex and time-consuming probate process, ensures your loved ones will inherit as much of what you plan to leave them as possible themselves. This will allow them to grieve your loss and restore some semblance of normalcy to their lives without having to deal with the added burdens that often come with a close family member not having a well-thought-out estate plan in place.
Don’t delay creating an estate plan or revisiting your existing one to ensure it adequately protects your assets. Contact our Raleigh law firm, Wilson Ratledge, PLLC, for personalized guidance as to steps you can take to protect your assets after your death. Our estate planning attorneys are eager to help.