When it comes to safeguarding your legacy, nothing compares to having a comprehensive estate plan in place. As part of estate planning, you will need to decide who is going to inherit what. Generally, the surviving spouse and children are the first in line to inherit a deceased person’s assets. However, transferring assets to your children may be fraught with potential pitfalls and ramifications to avoid. While giving your assets to your children may seem like an appealing idea, it could lead to unforeseen consequences. For help with the complexities involved in transferring property during your lifetime or after your death, consider reaching out to an estate planning lawyer at Roulet Law Firm, P.A., to discuss the various options for your assets. Call our Minnetonka, Minnesota office at (763) 420-5087 or our southwest Florida office at (941) 909-4644 to schedule a meeting.
How Do You Transfer Assets Between Family Members?
There are several ways to transfer assets to your children or other family members, including:
If your children are not old or mature enough, you may be concerned about protecting your family’s wealth. You can achieve this by creating a trust and setting the conditions under which the asset will be distributed to the child instead of giving the child full access to the asset. In a common example, many trusts specify that the beneficiary will get access to funds or assets in the trust after turning 18 or graduating from college.
That being said, we usually suggest that children be at least 25 before being given complete control of assets as they are often more mature. Even better, you may want to consider utilizing a lifetime asset protection trust for them that would allow access to the funds for their health, education, maintenance and support while having the added benefits of protecting their inheritance in the event they get divorced, get sued, suffer a job loss or medical emergency.
Mistakes To Avoid When Transferring Assets to Children
Transferring assets to anyone requires careful consideration, but this is especially true if you are considering giving your assets to your children. Before leaving an inheritance to your children, consider the following four mistakes to avoid making:
An experienced estate planning lawyer from Roulet Law Firm, P.A., may be able to help develop a personalized plan tailored to your specific circumstances for a smooth transfer of wealth to the next generation.
Why Do Parents Put Assets in Their Children’s Names?
Parents often put their assets into their children’s names during their lifetime for the following three common reasons:
- Probate avoidance: Probate can be a costly and lengthy process, which is why many people go to great lengths so their families can avoid it. However, putting assets in your child’s name may not be the most effective strategy if your only goal is probate avoidance. Creating a revocable trust may be a more viable alternative because it does not require giving up control over your assets and often has better tax treatment.
What Should Be Included in an Estate Planning Binder?
Creating an estate planning binder is an often-overlooked step when setting up an estate plan. A binder is a detailed list of all the financial and personal assets a person owns and includes all the documents relevant for distributing the person’s estate, including the Last Will and Testament (will), trusts, and others. Everyone has a unique collection of assets and documents as part of their estate plan, so the contents of a binder may vary from one person to another. Some of the most critical components to include in an estate planning binder are:
Contact an Estate Planning Lawyer Today
The primary purpose of an estate planning binder is to ease the burden on family members in the event of a person’s death to ensure that nothing is overlooked or forgotten. Having a binder also helps to ensure a smooth transfer of assets with no unnecessary complications and delays. If you do not want to leave your assets to chance in terms of who gets what, it may be time to start planning your estate. To plan ahead and make informed decisions when transferring assets to children or other family members, consider calling a knowledgeable estate planning attorney at Roulet Law Firm, P.A., at our Florida office at (941) 909-4644 or our Minnetonka, Minnesota office at (763) 420-5087.
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