We recently read a book on taxes and in it, there was some good information on Trusts, Wills, and overall Estate Planning. Being that we deal with so many homeowners and/or people with assets, we thought this info might be worth sharing. So, below is a transcript directly from this section of the book. If you have any questions related to this topic, feel free to Contact Us and we can put you in touch with one of our favorite estate planning attorneys 🙂

3 Steps to Successful Estate Planning

Source: Tax Free Wealth by Tom Wheelright, CPA – Pgs 128 – 132

1. Placing Assets in Trusts

Let’s start with making financial aspects as easy as possible. While not all countries have an inheritance tax, everyone has to deal with the other financial aspects of death. I’m not just talking about having insurance so that there’s enough money for your coffin and funeral expenses. I’m also talking about having the title of your assets taken care of before you die so that your Family doesn’t have to go through probate.

Probate is the process of changing an asset’s title (i.e. who owns it) from the person who died to that person’s heirs. Heirs are simply the people or organizations that get your assets when you die, such as your family or your favorite charity. Probate is bad for a few reasons. It’s bad because it’s public. That means that all the financial pirates out there can (and will) pounce on your spouse and your children trying to convince them to invest or spend their inheritance on scams.

Probate is to be avoided because:

  • It includes courts, judges, and lawyers
  • It’s expensive
  • It’s public

There is an easy way out of probate in most countries. Make sure all of your assets are titled to a trust. You can be the trustee (owner) of the trust, and you can even be the beneficiary (the recipient) of the trust assets while you’re alive. The trust document says what will happen to the assets when you die. It’s basically your ticket to control your assets after death. Wouldn’t it be great for your loved ones to not have any arguments over who gets what? And not to have to go through probate, keeping your family matters private? You get all this and more simply by setting up a trust that owns all of your major assets.

2. Where there’s a Will

One other document you need in order to make life easier for those who survive you is a will. Just because you have a trust doesn’t mean you can skip putting together a rock-solid will. This is particularly true if you have small children. A will allows you to appoint the person who is going to be the guardian of your children. In a will you can also be very specific about who gets which of your assets, and you can share your funeral requests. Between a will and a trust, you should have most bases covered.

Set up a Trust and a Will A Trust will:

  • Control your assets after your death
  • Avoid probate
  • Maintain privacy

A Will can:

  • Appoint a guardian for your children
  • Specify the distribution of your assets
  • Specify any other special requests

3. Avoiding the Estate Tax…”

This is only applicable to individuals with an estate value of $11.7M or greater. To learn more about how to avoid the estate tax, or if you’re interested in this section of the book, let me know and I can shoot you a pdf of the pages 🙂

If you ever have any questions, please don’t hesitate to reach out.