Everyone wants to protect their children. In addition to protecting them from physical and psychological harm, one of the most important ways to protect your children is to ensure their inheritance is secure. It’s critical that you take action now to ensure your children are able to access your assets when you die.
To help you take the necessary actions, we have compiled this list of 10 steps you can take today to protect your child’s inheritance. A Virginia trusts and estates lawyer can help you plan for the future. Reach out to us today to schedule a free case review with one of our Client Service Coordinators.
Create a Will for Asset Distribution
One of the most important things to do when planning for the future is to create a legal will that stipulates how you would like your assets distributed in the event of your death. If you don’t have a will, state laws will determine how your assets will be divided.
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Use Caution When Dealing With Mirror Wills
Mirror wills, commonly used by married couples, typically stipulate that assets will go to the surviving spouse upon the death of one, with the children inheriting everything after both parents have passed. Unfortunately, these wills typically fail to account for life changes between the death of one spouse and the death of the other.
For instance, if you pass away before your spouse, and they get remarried without updating their will, their new spouse will inherit all of their assets instead of your children. An experienced Virginia wills lawyer can help you ensure that the terms of your will are clear and provide protection for your children.
Choose a Life Interest Trust
You can avoid the problem of remarriage in a mirror will by investing half of your assets into a life interest trust. With this type of trust as part of your will, you can ensure your children will still have access to 50% of the estate upon the death of your surviving spouse, even if you remarry.
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A Discretionary Trust Can Help Account for Changing Circumstances
With a discretionary trust, you can assign trustees to distribute your assets to your chosen beneficiaries at their discretion. While you will designate the beneficiaries you would like included, a discretionary trust does not guarantee assets to any specific individual listed as a beneficiary.
Because of this, it’s important to choose trustees you can rely upon to distribute your assets the way you would prefer. You can leave instructions for the manner in which you would like your assets to be distributed to give your trustees an idea of how to react to changing circumstances in the lives of your beneficiaries.
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Choose a Trust With Direct Beneficiaries
You may also choose to set up a trust that passes along specific assets to specific direct beneficiaries. This can help ensure that your children have access to precise assets at a set time.
For example, your spouse may be in charge of the trust until your child turns a certain age, at which point the assets in the trust will be made available to them.
A Virginia trust lawyer can help you choose the trust that is right for you.
Leaving Gifts Upon the Death of the First Spouse
You could also choose to leave gifts upon the death of the first spouse. Leaving assets or money to your children while giving the rest of your estate to your spouse can ensure your children have access to their inheritance.
However, this means you will be leaving less to your spouse, which can create a challenging financial situation for them after your death.
Prepare to Live a Long Life
In addition to ensuring your children are able to access their inheritance upon your death, there are a variety of steps you can take to help ensure there is a sizable inheritance for them to recover. With increasing life expectancies, it is critical that you make investments with the thought that you will need money to carry you into a long life.
If you don’t prepare financially to live into your 90s or even past 100 years, you could find yourself out of money long before your death, meaning that not only will you not have any inheritance to pass down, but your children may also be having to pay some of your expenses.
Ensure You Have a Health Insurance Plan that Accounts for Rising Healthcare Costs
Another way to protect your assets and ensure you have an inheritance to leave your children is to consider rising healthcare costs. Healthcare costs in the country continue to go up, and as you grow older, your healthcare needs are likely to increase.
Securing an insurance plan that provides robust coverage can help protect your savings as you age.
Defer Income While Working
Investing in an individual retirement account (IRA) or 401(k) plan is one of the best ways to ensure you have the money you need after you retire. When you put money into one of these retirement savings accounts, you will start receiving income from the money you invested and the interest it earned after you retire.
This type of investment can help ensure you have money to last until your death and that you have assets to leave to your children.
Plan Your Estate With the Help of an Experienced Trusts and Estates Lawyer
The most important step in protecting your child’s inheritance is to hire an experienced trusts and estates lawyer today. When you hire a Virginia estate and tax planning attorney to help you plan for the future, they will ensure you fully understand your options for protecting your children’s inheritance.
Your lawyer can explain all the pros and cons of any options you choose so you can make an informed decision that aligns with your goals. Schedule a free case review to learn more about how an experienced attorney can help today.
Schedule a call with one of our client services coordinators today.
