Hey, I’m Alex with the Eidelman Law Firm. Today we’re answering the question, what’s the easiest way to pass on my assets to my children?
Really, the answer is: It depends.
That’s an inside joke because that’s what lawyers always say. I have clients all the time come to me and say, you know, I’ve put my kid on my house, I’ve got my kids on my bank account. I’m ready to go. Right?
And in one sense, they’re right. And in another sense, they’ve really put themselves in danger. Because when you add your kids to your accounts, that makes your asset now their asset, and it also makes you potentially liable for stuff that they do. So if they’ve got a creditor and that creditor sues now, you could be losing up to half of the value of your house because they’re coming after that.
The next thing I have people do is say, well, I’ve got my kids transferred on death for all my assets. That takes care of everything, right?
And in a perfect world, it does transfer on death means that those assets pass automatically on your death to your children. But if one of your children has children of their own, or if they’re disabled, or something else happens along the way and life doesn’t work the way you want it to transfer on, death is inflexible. And so it doesn’t accomplish what you want when the world doesn’t work the way you want it to.
And then I have some people say, hey, I’ve got a will. I’ve got everything set up through that. I’m all taken care of. Right?
And the answer is maybe. But if you’ve got a will, the will has to go through the probate process, which can take up to six months, and 5 or 10 or $15,000.
In an ideal situation, I love to see everyone have a trust. A trust answers all of the questions that that can happen in life. What if one of my children predeceased me? What if one of my children has, an injury or an illness that makes them need Medicaid or Social Security? Maybe you’ve got a situation where you’ve had land handed down from generation to generation, and you’re finding that maybe your children aren’t as interested in the land. If you’re wanting that land to stay in the family, a trust is what you need because that’s going to be able to set up for your children and your children’s children the ability to own this land. Now, maybe that’s not the case and you’re looking to do something else. Well, a trust is flexible and can take any situation into account and get any result that you desire. It’s kind of like Baskin Robbins with their almost endless flavors. You can pick anything that you want as long as it makes sense for your specific scenario. Remember, you’re the expert on your family, and our job is to make sure that your estate plan fits what you need. Remember, no matter what you’re deciding to do with your estate plan and how you want to pass assets onto your children, make sure that plan is communicated to your children. It’s so vitally important that they understand what the plan is, so that when you pass, they’re not adding another layer of stress on top of the grief that they’re already going to be experiencing.
But I want to know what your thoughts are. Send us a comment, shoot us an email, whatever you need to do to get in touch so that we know what your questions are and allow us to answer them for you.
That’s all the time we have for today. I’m Alex with Retirement health.com and we’ll see you next time.
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