If you are ready to start the estate planning process, you probably want to know how you can make sure that your money remains in the family and with those you love.
According to U.S. News, the best way to ensure that the money goes where you want it to, you need a solid estate plan.
Convert your retirement accounts
If you leave your 401(k) or your IRA account to your heirs, you could also leave them with a massive tax bill. However, if you gradually convert your accounts to Roth accounts, they will benefit from tax-free distributions.
Create a will or trust
Often people use wills and trusts to ensure that the money goes to their heirs. Your first step may be to write up a will. Keep in mind that with wills, your family does have to go through probate. Probate can take a long time and may cost more.
If you have a large estate, you may want to set up a trust. This is a particularly smart idea if any of your heirs have financial trouble. With a trust, you have a trustee who takes control and distributes your wealth.
Gift your wealth
A lot of people focus on how to give their heirs their inheritance after they die, rather than focusing on the present. You can also wisely gift your money or assets while you are alive. Not only do gifts provide your loved one with tax breaks, but gifts can also give you the joy of seeing your family receive the gifts.
To keep your money in the family, you need to think of your family’s needs and your current estate.