The top points to consider in planning an inheritance
Whether it is planned for after dying or during their lives, parents need to know how best to distribute assets to their children.
Anyone living in Missouri with a decent degree of assets that they wish to bestow upon their children will probably have put some thought into how the process is going to work. The question may arise as to which type of arrangement will be laid out to guarantee the best living situation for any beneficiaries. There are numerous means by which to instill benefits to a successor, including trust funds, direct gifts and a last wills and testaments. Learning some of the lesser-known options and some of the distinctions between how different estate plans work can help parents plan for their children’s most ideal future financial success.
Distinguishing wills and trusts
A trust specifically addresses the distribution of assets and can minimize estate and gift taxes. A will allows other terms to be stipulated, such as guardianship of any minors. A trust fund may describe a specific asset, such as life insurance. One important thing to know is that a will can guarantee that assets continue to be put into a trust, even after the founder of the trust fund dies before it is fully accumulated.
Ways to bestow benefits in life
Some parents who find themselves in a position to set their children up for the future want to do so in a way that still allows their kids to work and struggle in the real world, so they can be equipped to handle the unexpected challenges in life and develop a better character and work ethic. One way to do this is to take advantage of the annual federal gift exclusion that allows parents to give their kids up to $15,000 as a tax-free gift or gifts. A common application of this method it to help pay off student loans.
Another aspect to consider is that if a kid gets a huge sum of money before even coming of age, he or she won’t even know what to do with it. A good way to maximize the potential of any inheritance is to bestow smaller amounts at different age intervals or at specific milestones. Turning 20, 25, and 30 may be suitable times for one family to endow benefits, while another may prefer to make larger contributions every 8 to 10 years. Graduation from college and then from graduate school may both be good occasions for a gift.
Those living in Missouri who are trying to decide how to plan the distribution of their assets among their children may find a benefit in consulting an attorney in the local area who practices estate planning law.