You have worked hard all your life, saved faithfully, and invested wisely. As a result, you have managed to accumulate a moderate to large estate that you hope will see you through your Golden Years as well as provide for loved ones after you are gone. Protecting that estate requires careful inheritance planning. The details of your inheritance planning strategies will depend, to a large extent, on whether you wish to provide for children and/or grandchildren or for no children. Only an experienced North Carolina estate planning attorney can provide you with individualized advice and guidance relating to your inheritance plan; however, it always helps to have a basic understanding of some estate planning options so that you can start thinking about to whom, and how, you wish to pass down your hard earned assets.
Who Are Your Beneficiaries?
One of the first questions you need to ask yourself is who your beneficiaries are. To some extent, this will likely depend on your age; however, not entirely. A well drafted estate plan is not a stagnant plan. Instead, it plans for the future. Therefore, even if you are relatively young and newly married, you can still think in terms of providing for children you don’t have yet. Likewise, if you are well into your working years with young children, that doesn’t mean you cannot think in terms of providing for grandchildren someday. Of course, if you do not plan to have children or you do not wish to include those you have in your estate plan, your plan will focus on other beneficiaries, such as charities, other family members, or even the family pet.
Providing for Young Children
When your children are still minors, inheritance planning is both more complicated and more important. Because minor children cannot inherit directly from your estate, you must structure your estate plan in a way that provides for them and protects their inheritance until they are old enough to receive it directly. Typically, this includes the creation of a trust. A trust allows you to appoint a Trustee who will manage the assets held by the trust until the beneficiaries are old enough to inherit them outright. In the meantime, the terms of the trust will allow for distributions that can provide for your children’s financial needs until they reach the age of majority. A trust is also a popular option for beneficiaries who are young adults because it can allow you to stagger an inheritance instead of gifting a lump sum of money that your beneficiary may not be prepared to handle well.
Providing for Older Children and Grandchildren
If you have grandchildren already, or anticipate having them in the future, you have two basic options when it comes to inheritance planning. The first is to gift everything to your children and count on them to pass on the assets to your grandchildren in their estate plan. The second is to provide directly for your grandchildren in your own estate plan. Providing for them directly eliminates the possibility of the assets being squandered or simply depleted by the time your children’s estates are probated. Again, a trust is usually the estate planning tool of choice for leaving an inheritance to grandchildren; however, you may choose to make direct gifts to your older adult children.
Inheritance Planning with No Children
Children and grandchildren are certainly not the only potential beneficiaries for your estate plan. Like many people, you may choose to give a portion, or even all, of your estate to charity, for example. Aside from giving you a feeling that you have done a good deed, charitable gifting can also come with considerable tax benefits. Moreover, if you create a charitable lead or charitable remainder trust you can combine charitable and non-charitable beneficiaries, allowing you to provide for a loved one and a cause that is important to you.
The Key to Inheritance Planning
Whether you want to provide for children, grandchildren, or completely unrelated beneficiaries, the key to creating a successful inheritance plan is to work with an experienced North Carolina estate planning attorney.
If you have additional questions about inheritance planning in the State of North Carolina contact the experienced estate planning attorneys at The Law Offices of Cheryl David by calling 336-547-9999 to schedule an appointment.