Three Options For Managing Your Money In The Afterlife
Your nest egg is the culmination of years of hard work and responsible financial moves. When you are gone, you want to make sure your wishes for your nest egg are followed. Consider one of these options to continue to support individuals and causes who are dear to you, even after your death.
1. Irrevocable Trust
An irrevocable trust is a type of permanent financial account. Once you create an irrevocable trust, you cannot modify or eliminate the trust unless you have the permission of the beneficiary. Once you move your assets into the trust, you give up ownership.
You can fund an irrevocable trust while you are alive, or you can have it funded after death as a part of your will. Multiple types of assets can be held in the trust, included life insurance policies, cash accounts, business interests, property, and investment accounts.
One benefit to irrevocable trusts is that you can attach rules concerning how the money is supposed to be used.
2. Testamentary Trust
A testamentary trust is a trust that only goes into effect after you pass away. If you wish to create a testamentary trust when you are gone, you must include guidelines for the creation in your will.
Upon your death, the trustee sees that the testamentary trust is created according to your wishes. The trustee also helps with managing the account as your assets go through the probate process. Trustees are responsible for managing the funds for the entire duration of the trust, making it essential you pick a trustee who you have absolute confidence in.
One benefit of the testamentary trust is that the costs to set it up are relatively low, making it an ideal choice for smaller amounts of money that you wish to gift to certain people or organizations after your death.
3. Payable-Upon-Death Accounts
Designating an account as a payable-on-death (POD) account is a simple way to pass that account to a certain individual after your death. While you are alive, the beneficiary of the POD account has no access to or ownership of the account.
You can change your mind about the beneficiary at any time. If desired, you can even close the account or spend the money in the account. It is free to designate an account as POD.
Upon your death, the beneficiary must bring proof of your death, such as a certified death certificate, to the financial institution to access the account.
No one likes to think about death. However, a little bit of planning now ensures that your assets go to your intended recipients after you are gone. For more information and advice, contact a trust management specialist.
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