How can I keep my money in the family after my death?

How can I keep my money in the family after my death?

| Dec 11, 2020 | Estate Planning

After your death, you have very little control over what happens with your personal assets. The only control you have is when you create an estate plan, but even then, things can go awry. 

If your main concern is keeping your money in your family, then you need to make sure you set up your estate plan in a way that prevents others from accessing your money. Specifically, according to U.S. News and World Report, you need to plan ahead for taxation. 

Consider trusts

One of the best ways to ensure money goes exactly where you want while also allowing you to have control over taxation is to create a trust. A trust gives you a lot of flexibility. You can set guidelines for asset distribution and secure your assets in a trust. 

If you choose an irrevocable trust, you may also be able to avoid estate taxes because the assets will no longer belong to you. Even a revocable trust offers some benefits as trusts are not subject to probate. 

Use Roth IRAs

Traditional IRAs have many penalties associated with them. Since laws stipulate your heirs only have 10 years to liquidate them, this sets them up for huge tax bills. 

If you convert your 401(k) or traditional IRAs to Roth IRAs, you can save them a lot of money and hassle. Roth IRAs are tax-free for your heirs. 

Give money away

Another option that can help your heirs avoid taxation is to give them the assets and money now before you die. You can also consider giving to charity, which is also a tax-free option.