Many people will go to an estate planning lawyer with notepad and pencil in hand expecting to be faced with a significant learning curve. However, they often discover that their particular situation is best addressed through the implementation of some rather basic and straightforward strategies. After all, the objective of estate planning is to keep things simple if possible, enabling the transference of your assets after you pass quickly, efficiently and cost effectively with minimal hassles and red tape. Below are a trio of tools that can help you do just that.
Pay on Death Accounts
One very simple and direct way to pass money along to your heirs is to open a pay on death or transfer on death account at your bank. You name a beneficiary or beneficiaries and when you pass on they assume ownership of the assets in the account. In most states you can do the same thing with brokerage accounts, getting those assets into the hands of your loved ones without having to go through the process of probate.
Another very efficient way to transfer assets without going through probate or even paying taxes on the transaction is though the giving of gifts while you are still alive. Each person is allowed to give up to $1 million in total lifetime gifts free of the gift tax, and there is also an annual exemption of $13,000 per person that does not count against your lifetime gift tax exclusion.
Life insurance is something that serves its purpose. Though it is “old school” it is now, as it has always been, an ideal income replacement vehicle. If your family depends on your earnings to maintain their quality of life, life insurance is a simple and cost effective way of making sure that they will be able to move forward comfortably if you were to pass away unexpectedly.