How Financial Planning Can Help Your Children Be Responsible

When it comes to passing on wealth to your children, it is imperative that you have a formal plan of action in place. Simply giving your children a large sum of money could lead to financial mishaps and be devastating. Proper financial planning, such as including a contingency in your will, helps to provide for your children long after you’re gone and can help teach them to provide for themselves.

Nothing in Life Is Free

As a parent, it is only right that you want the absolute best for your child. However, teaching them to be responsible adults is what’s best for them as well. Opening a trust fund is a great way to pass wealth onto your kids once they have reached a certain age. One of the great things about this is that you can place contingencies on it such as an age or educational requirement before they can receive the funds.

Financial Planning Is Not Just for the Wealthy

Not only can anyone put a financial plan into action, but if you are an average working citizen, then it would really behoove you to do so. Something that happens too often with middle-class and poor people is that the only thing they pass on to their family is debt. Consulting with an attorney about will writing can help you set your focus on your finances and start getting them in order while you still can.

People Appreciate What They Work For

Although you are technically passing down wealth, you can still have your children earn what they are getting with contingencies in your will. By talking with an estate planning lawyer in Las Vegas, you can learn how to include clauses so you can provide for your kids while helping them become fiscally responsible. One of the easiest ways to do this would be to only allow a small disbursement of funds at a time, which will help your children practice budgeting and possibly investing.

Should Your Children Be Your Executors? Weighing the Pros and Cons

Although naming your children as the executor of your will is a fairly common practice, you’ll want to consider all of your options before you make a final decision. An executor has several legal and financial responsibilities, so it’s natural to choose a child you know you can trust when considering possible executors. With that said, selecting a more neutral party can several advantages.

Understanding Executors’ Legal Responsibilities

Above all else, the executor of your last will and testament is responsible for making sure that your estate is divided amicably among your family members. In addition, it’s the executor’s responsibility to notify all appropriate government entities, financial institutions, and other parties that you have passed away. Furthermore, the executor is also responsible for filing your last income tax return and all estate tax forms.

Selecting Your Executor

Even if all of your children have always been very responsible, you’ll want to make sure they are comfortable handling legal and financial paperwork before you even think about naming one of them as the executor of your will. You’ll also want to consider whether being the person to file paperwork on your behalf after you have passed away would cause undue emotional stress.

Also, if you have more than one child, then picking only one to be the executor may offend the other siblings. After all, everybody in the family may end up wondering if the executor is favoring himself or herself in the distribution of your estate.

The Advantages of Choosing a Neutral Party

Since being an executor can be so emotionally draining, many people choose to appoint relatives, close friends, or a qualified attorney instead of their children. Bringing in a neutral party to distribute your estate can help put everybody named in your will at ease, and people are less likely to end up feeling slighted or conspired against. A trust administration lawyer in Las Vegas may be able to help you evaluate your options.

When to Consider Creating a Foundation With Your Estate

Creating a foundation may be an effective estate planning tool for those who want to preserve their legacy for generations to come. Family members may be able to work as employees of a private foundation, which means that they can draw a salary for as long as the organization exists. Furthermore, there are several strategies that allow you to use your foundation to minimize your estate tax bill.

How to Minimize Your Tax Bill by Creating a Foundation

Any assets that are owned by your foundation are considered to be held outside of your estate. Therefore, they won’t be included for purposes of calculating its value upon your death. Furthermore, up to 30% of the value of any property sold by this entity will be exempt from capital gains taxes.

The Potential Downfalls of Creating a Foundation

As a general rule, your private foundation is considered a separate legal entity. Therefore, you will need to keep detailed records of any donations that it made and any income that it earned throughout the year. Furthermore, there are various IRS tax reporting and accounting rules that must be respected at all times. There is a good chance that you will need to hire an accountant, an attorney and other professionals to make sure that you’re in compliance with these rules.

Financial and Other Professionals May Offer More Insight

A probate attorney in Las Vegas may be able to provide insight into whether it’s worth creating a foundation. An attorney might also be able to review your estate plan to determine if it was created properly. Other professionals such as accountants or financial planners can also help answer any estate planning questions that you might have.

Protect Your Assets With an Estate Plan

You are likely concerned about how to protect your assets during uncertain economic times. The good news is that there are several estate planning steps that you can take in an effort to protect your property from creditor claims. In addition to preserving your financial security, shielding assets from creditors means that future generations can inherit a larger share of your net worth.

How an Irrevocable Trust Can Protect Your Assets

A trust is an estate planning tool that allows you to hold assets outside of your estate. An irrevocable trust is one that is controlled by an independent trustee who has a fiduciary responsibility to the beneficiaries. Since you do not control the assets inside of an irrevocable trust, creditors are not allowed to seize them for any reason. This can be helpful in the event that you lose your job or experience a loss in income that makes it difficult to pay your bills.

An Annuity May Shield Your Money from Creditor Claims

State and federal law generally allow creditors to pursue a percentage of any annuity payments that you receive. However, these payments may receive greater protection from creditor claims if you file for bankruptcy. In most cases, you will be able to keep whatever you need to reasonably support yourself and any dependents who you are responsible for.

Talk to a Professional to Learn More

An estate planning lawyer in Las Vegas may be able to help you craft an estate plan that protects your assets during unpredictable economic times. Alternatively, you may be able to learn more about creating a stronger future for yourself and your family by talking with a wealth management professional.

How to Plan an Estate for a Terminally Ill Child

Estate planning is important for anyone who has assets. When a terminally ill child has assets under their name, parents or guardians need to include estate planning as a part of the legal activities they do on behalf of their child. Here’s how the process works for children with a terminal illness and why it’s important.

Set Up a Trust and Will

Minor children cannot directly inherit an estate. If you don’t already have one, set up a special needs trust for your terminally ill child. You’ll also need a will for distribution of personal assets of your child. A will may also include details about medical or healthcare power of attorney. If you’re not available to make those decisions at the time, this document will be used.

Choose an Executor for the Terminally Ill Child

The trust protects your child’s assets. If there are funds left in the trust after your child’s passing, the executor will be in charge of distributing them. It’s important to choose an executor you feel confident in and trust. If you don’t have a family member or friend who can do this for you, a business planning lawyer in Las Vegas may function as an executor of the will for a child with a terminal illness.

Include What the Child Wants

As early as possible in your child’s terminal illness, ask them what they want. While the subject is macabre, you might be surprised about how your child wants to be remembered or if they want anything special done in their memory. Your child’s estate planning process might include the details for a celebration of life event. A child with a terminal illness might have a friend in mind to take care of a treasured item.