Let’s start with the numbers: 10 and 1,000,000,000,000. Over this decade, $1 trillion is expected to change hands through inheritance. The majority of that will end up in the hands of baby boomers. While one study found that the average inheritance was only $50,000, there will be a lot of inheritances in the $1 million-plus range.
After a loved one passes, one of the biggest hurdles families face is passing wealth onto the next generation. Unfortunately, family dynamics can spur conflict and infighting among descendants.
Is it better to transfer the title of the home to us, or to leave it as it is given her age and go through probate?
To ensure a lasting legacy, you need to get your documents in order and have a clear plan for how your wealth will transfer, avoiding taxes and inheritor pitfalls along the way.
Trusts can be useful in estate planning for passing on assets to your heirs. A grantor retained income trust (GRIT) is a specific type of trust that allows you to transfer assets, while still benefiting from the income they generate.
Your real estate holdings, life insurance, bank accounts and retirement savings won’t magically flow into your trust.
A trustee is a manager of assets in a trust. The grantor creates the trust and appoints the trustee. A trustee has a ‘fiduciary duty’ to serve the grantor and not benefit personally.
This fall, older savers who are feeling generous may want to consider using their individual retirement account to help fund their favorite charities.
Estate planning generally focuses primarily on lifetime protection and post-death distribution of assets. Special needs planning focuses primarily on the individual beneficiary’s lifestyle and care needs.
Maybe not tomorrow, but the sunset of our historically high estate tax exemptions is coming—and with the election on its way, it could be sooner than you think.
