Building your wealth takes effort, time, and patience. As you are building your wealth you need to have a plan for where it will go when you die. To make sure your wealth goes to the right people you can update your beneficiaries, create a trust for your heirs, and name an executor.
Update Your Beneficiaries
A beneficiary is the recipient of your accounts once you pass away. You can name multiple people as beneficiaries if you want to split up your wealth. Naming and updating your beneficiaries is important because it helps reduce confusion. When you pass on there will be no question who you wanted to inherit your wealth. Updating your beneficiaries will also save time because there will be a clear understanding of who needs to receive the assets. If you don’t name a beneficiary, there is a default order of who receives your wealth which is your spouse, then children, then your estate.
Create a Trust for Your Heirs
A trust can be a helpful tool to ensure your wealth goes to the right people. Your assets will go in the name of the trust and a third party will help to administer your trust when the time comes. Trusts can hold many kinds of assets such as houses, cars, or investments. A trust is helpful because it helps avoid probate court. Probate court can be a lengthy process for your heirs. Assets in a trust aren’t subject to probate.
Name an Executor
An executor is an important person because they will have access to your records and your wealth once you pass. To name an executor, you include it in your will. If you do not name an executor an estate administrator can be appointed to distribute wealth to your heirs. When naming an executor, you need to ensure they are willing. You can choose someone who you have named in your will who will be a recipient of your assets, such as a family member. Also communicate with them where your records are and what it entails.
Planning is the best way to ensure your wealth goes to the right people. It is never too early to plan, and it is always important to make it legally binding. Once you have a plan, update it frequently to ensure none of your wishes get left out.
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