To save headaches for your loved ones left behind, it’s important to have all of your “ducks in a row” when it comes to your estate.
If you want to make it a smooth process and keep your money in the family, follow these valuable tips below:
1. Give money while you’re alive.
The IRS allows an individual to give up to $14,000 in gifts per person each year. These gifts are tax-free for the recipients and can help them along as needed, rather than receiving a lump sum later in the event of your death.
2. Update your will.
Over half of all Americans do not have a will, and approximately 20% don’t even think they are necessary. Having a will in place creates a smoother transition of your estate and lessens the hassle for your loved ones.
3. Check your beneficiaries.
A will is not always enough. Many life insurance policies and retirement funds require you to name a beneficiary. Without a beneficiary, the estate goes to probate court and the judge decides who is responsible. You should always review your beneficiaries after major life changes such as divorce, births and deaths.
4. Convert traditional accounts to Roth IRAs.
You can avoid leaving your beneficiaries with a large tax bill by gradually converting your wealth to IRAs.
5. Set up a trust.
Appoint a trustee to distribute your wealth after your death.
Estate planning is an important step every American should take to help their loved ones. If you need help planning your will, consider meeting with a knowledgeable estate planning attorney.