As you near the end of your life you might be wondering what you can do to save money on taxes and ensure that your family gets your estate without having to go through long and difficult legal processes. Many people wonder what they can do to avoid probate and instead get their money directly to their loved ones. Here are some things that you can do to avoid probate.
1. Use A Trust Rather Than A Will
When many people think of estate planning, they think about wills. You might believe that they only way to distribute your money is through a living will; however, the best way to deal with money after death is to put it in a trust. A trust is great for two reasons. The first is that you don't have to probate a trust. Rather than have a judge go through and distribute the assets and instructions of the will, a trust will only be between the beneficiaries and the executor of the trust. The second reason to use a trust is that it won't be put on public record. Anything that goes through probate will be recorded for anyone to see; thus, everyone can see how much money you had, who you gave it to and much more. A trust is more private and is more desirable for that reason.
2. Gift Your Money
Each year you can gift money to family and friends that will completely avoid taxes. The IRS has an amount allotted each year that you can give without it affecting your estate at all. Many people choose to give their estate to their family while they are living rather than waiting till after death. This way they get to see their loved ones enjoy the money, and they know that it will simplify the process after death.
3. Get A Life Insurance Policy
Life insurance is a great option for many people. Even if you have a good savings, you should still consider having a life insurance policy because it is protected so well. Life insurance will guarantee that your family gets the money and that the money won't be taxed, and it won't go through probate. Because a life insurance policy is paid on death, your family can get what they need immediately without having to worry about any legal complications.
These are just three simple ways to avoid probate. For more information, consult with a probate lawyer, such as David R Webb Attorney.
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