If you are a parent, you know how important it is to ensure your minor children are taken care of if something happens to you. Although you might have the best intentions, poor estate planning on your end can result in your loved ones losing out on the assets you left behind.
If you have minor children, you should consider using the following estate planning tools:
Revocable Living Trust: A major benefit of a revocable trust is that it can be used to avoid probate and prevent delays in the distribution of your assets.
Testamentary Trust: You can create a testamentary trust under a will. However, it does not technically exist until the creator of the will dies. After the will-maker has passed away, the testamentary trust is created through probate. This process can take months or even years to complete.
Irrevocable Life Insurance Trust: If you think your estate needs additional tax protections to cover your minor beneficiaries, you can use an irrevocable life insurance trust to eliminate the death benefit of an insurance policy from the estate. This estate planning tool can save you and your beneficiaries money on estate taxes.
Irrevocable Trust: If your primary goal is to transfer your wealth after you die, then an irrevocable “Gifting Trust” might be the right option for your estate. This type of trust is especially useful if you want to leave your minor beneficiaries annual or lump sum gifts.
