The main goal of your estate plan is likely just to pass your wealth on to the next generation. You certainly can use it to do other things, such as making healthcare or medical decisions, but asset distribution is one of your top areas of focus.
There are many different ways to do this, some of which may be applicable in your situation, especially if you’re trying to preserve wealth. Below are three different legal tools that you can use.
Distributing assets with your will
First of all, you can choose beneficiaries in your will. You can list certain tangible or financial assets that should go to these selected beneficiaries. Your estate executor will also be chosen at this time, and it is their job to follow the instructions in the will.
Putting assets into a trust
Another option is to put the money into a trust and choose a trustee. It is this trustee who will then make distributions to the person named as the beneficiary of the trust. This can be a useful tactic if you want to choose a certain goal for that money, like paying college tuition.
Using a payable-on-death account
Finally, you can name a beneficiary directly on many types of financial accounts, such as bank accounts. If you create a payable-on-death account, the beneficiary becomes the account holder when you pass away. This is a fast and efficient way to transfer assets because it keeps them out of probate and the beneficiary has quick access to the funds.
What option is best for you? It depends on your family situation and your specific goals, but you can see why it’s so important to consider all of your options.