Planning your financial estate investments should not be a last minute or rushed task, it should be something you’re mindful of from the start of your asset investing. Everyone’s financial and family situation is different, though, so your estate investments are unique to you. However, there are some general estate planning tips that you should be aware of to help keep you organized during this process.
There are certain steps you can take during your lifetime to help your children or other family members while also reducing any federal estate and gift taxes. You can use the annual gift tax exemption, which will reduce the amount of your estate extensively if you give up a certain amount each year to as many people as you can. You can also start paying for medical and educational expenses (such as tuition) directly by writing a check in order to bypass taxes. Lastly, use your annual gift tax exemption on investing in your kids’ futures, which can include starting a retirement fund or other sort of savings account.
Know Your Different Beneficiary Transfer Rules
A beneficiary is anyone in your life that you’d like to transfer your assets to once you pass. This mostly includes family members, such as spouses, siblings, children, or parents. However, there are special provisions required for each type of beneficiary that you should know before you start; for example, assets that are jointly owned between spouses require different kinds of transfers, and transferring to children from a previous marriage or minor children can get more complicated.
Consider Life Insurance
If you don’t have life insurance now, you might want to consider getting it to help in your estate plan. Your survivors will be able to arrange final expenses more efficiently, and it can even help maintain their standards of living for years to come. You can either get term coverage (insurance coverage for a specific time period) or permanent coverage. Foe estate planning purposes, life insurance will prevent your cost of living and medical expenses from having a huge impact on what you left behind.