3 easy strategies you can use to keep your money in the family

Estate planning is not just for the wealthy. Preserving your wealth and keeping the money in your family after your death should be part of any successful estate planning strategy. If you’re concerned about protecting your loved ones financially, there are some estate planning strategies that are important when it comes to keeping your money in the family.

  1. Will — Drawing up a will should be the first step to estate planning, but many people fail to do this. Without a will in place when you die, your estate will have to go through probate which is both time-consuming and costly for your beneficiaries, and you relinquish control over how you want your assets to be distributed.
  2. Trust — If you have a sizeable estate or are concerned about how your beneficiaries will handle your assets after your death, you can establish a trust and name a trustee to distribute your assets. A living trust serves two purposes: it makes it possible for you to pass on your assets without having to go through probate, and it allows for someone of your choosing to manage your affairs should you become incapacitated.
  3. Gift — One of the best options for making sure that your assets stay in your family is to gift it to your beneficiaries while you’re alive. The IRS allows an individual to give up to $15,000 per person per year in gifts. The benefits of giving gifts is that the money is tax-free to the donee while the gifts can bring down the taxable value of your estate.

Short term vs. long term

Employing these and other short-term strategies for conveying money and assets to your family is one of the first steps that you need to take towards developing long-term solutions for how to keep money in the family.

What you need to have in your estate plan depends upon your assets and your family situation. If you have minor children, it’s important to have a plan in place for guardianship and how your money and other assets will be handled for them. If you’re a business owner, you’ll want to have a succession plan in place. Parents of special needs children will want to consider setting up a special needs trust.

Once you’ve created your estate plan, you need to periodically review it based upon any changes that occur in your life such as marriage, divorce, or the birth of a child.

Coverage for your spouse and kids

Developing strategies to keep money in the family is important for people of all income levels, but especially so for high net-worth individuals. The goals for estate planning for high net-worth individuals are to protect inheritances for heirs and beneficiaries, minimize estate taxes, avoid probate, and ensure that a suitable trustee is appointed.

At the Law Office of David W. Foley, California Living Trusts, we specialize in setting up living trusts as part of a comprehensive estate plan. Contact our office to schedule your free in-person consultation with one of our staff.

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