Ways to preserve assets after death

Florida residents who are interested in taking care of their belongings, assets and family members after they die know that there are many options available to them. The range of estate planning tools includes wills, trusts and more. Each option has different pros and cons related to tax responsibilities, the distribution of assets, probate issues and more. People who are particularly interested in making sure any distributions to heirs are not squandered or lost unnecessarily can do so with the right planning.

Some of the potential ways that inheritances are lost include outstanding debts to creditors, lawsuit and even spouses or former spouses of heirs. Any assets held in bank accounts can be protected by either clearly identifying a beneficiary or setting the accounts up jointly with another person. Funds in these cases are immediately transferred to that person only, avoiding them from being used to pay creditors. Titles for all real property should also be held jointly for this reason. Living trusts avoid probate which also avoids assets from going to creditors instead of heirs.

Money to be distributed from life insurance policies can be vulnerable to loss if not funneled through an irrevocable life insurance trust. Similarly, retirement accounts such as IRAs should be handled through specific IRA trusts. This is because last year, the Supreme Court ruled that any money inherited from an IRA can be used to pay creditor unless it is distributed through a trust. The one exception to this is when the heir is the deceased person’s spouse.

Estate complexities can exist for modest or more extensive estates. Floridians may wish to consult with an experienced attorney to determine the best way to protect their full estate portfolio.

Source: AARP.org, “Make Your Estate Creditor Proof,” Lynnette Khalfani-Cox, July 30, 2015

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