Preserving your wealth and keeping money in your family should be part of your estate planning strategy. Fortunately, there are several ways you can create those kinds of results. That can help you provide a financial legacy for your children and other family members, along with offering you a lot of peace of mind.
Below is a list of tips to consider to help preserve your money for your future and your family.
Have an up-to-date will
Over half of Americans don't have a will, and almost 20 percent say that they don't think they need one. If you have assets, though, you should have a will. That can protect your money and other valuables from going to the wrong people or from being used up to pay for attorneys as your estate moves through probate and the courts. With a will, your loved ones will have much lower expenses to be concerned about.
Designate your beneficiaries
Even with a will, there are still assets that can fall through the cracks if you aren't careful with them. For example, life insurance and retirement funds require a beneficiary. If you don't have one listed the account will have to go through probate. Some people also have a previous spouse or other person listed who they would not want that money to go to now. Checking your beneficiaries every time there's a major change in your life is a good idea.
Make your gifts while you are still living
If you plan on giving sums of money, property, or other gifts to your loved ones, you can do some or all of that during your lifetime. That way there is less of an estate when you pass away, and that will reduce the chances that the federal government or your state government will be able to tax the amount you leave behind. Some states have lower caps on the amount that can transfer before estate tax is required.
Change your IRA
If you have a standard IRA, you may want to convert it to a Roth IRA. That way, any money left in it when you pass away will go to your heir's tax free. For people who have a lot of money in their IRA, though, making the conversion to a Roth over several years makes sense. You'll be taxed on that money when you convert it, and doing so in stages can keep you from suddenly finding yourself in a new tax bracket.