How To Prepare Your Estate Finances For Your Kids

When you prepare your estate finances for your kids can sometimes feel challenging. Where are you even supposed to start? Fortunately, that’s what we cover in this post. It looks at some of the methods and techniques you can use to prepare everything for your children so that when they grow up or you pass on, they have the resources they need to live fantastic lives. 

Update Your Will

The first place to start is to update your will. You want to ensure that you have instructions in place that make sense for your current financial situation (and their position). 

Updating your will is something you can learn more about from sites like http://taylorlegalnc.com/. The general idea is to plan your estate and ensure that you write the will in a way that will eliminate conflict and allow you to dictate where assets go once you’re gone. 

Set Up A Trust

At the same time, you might want to set up a trust. This is essentially a legal entity that acts in your name to carry out more complex will-related instructions once you’re gone. 

Many parents use trusts for staggered financial distributions. For example, they might disburse funds when their children are 25, 30, and 35. Doing it this way reduces the risk of mismanagement and encourages careers in the meantime. It can also bypass issues like probate, which are often time-consuming and difficult to navigate for some parties. 

Designate Beneficiary Accounts

It’s also useful to designate beneficiary accounts. These are essentially life insurance and retirement accounts that let you name the people who should benefit from them directly. 

You can do this by going through your accounts and updating the beneficiaries on each of them. Naming contingent beneficiaries can also be helpful if the primary ones become deceased before you. 

Doing this ensures that all your assets go to the people you want them to go to. Usually, that’s your kids, but it could be others. 

Organize Your Financial Documents

At the same time, you’ll want to organize your financial documents. Putting these in order is critical if you want to make everything easy to manage and comprehend. Using ring binders and document folders is only the first step. You’ll also want to write down other things like passwords and account details so children can access these more easily. 

Look At How You Can Minimize Estate Taxes

You’ll also want to look into how you can minimize estate taxes, which is something you can learn about at irs.gov/businesses. Understanding how the law works is often the first step in ensuring that you don’t pay more than you need. 

Appoint A Reliable Executor

Finally, you’ll need to appoint a reliable executor–someone you can trust to carry out your will. Usually, this involves hosting a family meeting and deciding who will take on the role. You need someone with a reasonable mind, and then you need to write various letters to ensure that the right person does the job when you’re gone.