Baby Boomers are nearing or at retirement, and many are starting to think about what they want to happen to their assets after they pass. For this reason, many in the Fort Worth area, including Bedford, may start to think about estate planning. However, when executing your estate plan, it is important to discuss your intentions with your adult children.
If you want your adult child to be executor of your estate
If you want your adult child to serve as trustee or executor of your estate, it is important to discuss this role with them first. Some may feel up to the task, but it is complicated, and it may be a role that your adult child does not want to be burdened with. In this situation it may be better to choose a professional such as a financial expert or attorney to fulfill this role.
Even if you do choose a professional to act as executor of your estate, it is still important that you make your adult child aware of where your assets are located, for example, the name of your bank, bills and financial accounts, as well as the location of your valuables.
Be aware of tax consequences
It is important that you educate you understand how to make a tax-free distribution from an IRA, 401(k) and other retirement accounts. Depending on the circumstances, distributions improperly made during your lifetime or after your death could have significant tax consequences that eat away at the value of the account that leaves little left to your heirs than what you would have wanted.
There are many reasons why a person may choose to give a greater inheritance to one adult child than another. For example, one child may have served as caregiver, one child may earn significantly more than another, or alternatively one child may be a spendthrift or have an addiction problem. If you plan on making unequal distributions to your adult children in your estate plan, it is important to discuss this ahead of time. They may not like it, but at least they will understand your intentions and will not face any unforeseen surprises at the time of your death.
Learn more about estate planning
It is important to have a conversation with your adult children about estate planning, so they know what to expect. This post is for educational purposes only, and does not provide legal advice. Those who want to learn more about estate planning are encouraged to visit our firm’s website for further information.