This has not been a tough year for the economy, but plenty of people still possess assets that will eventually be passed down to beneficiaries. Kentucky residents who had not previously thought about creating an estate plan may now find themselves wondering if they can secure their assets for their heirs or help their heirs avoid excessive taxation. Even if a person expects to live for decades to come, it is never too early to create a will or trust.
Wills and trusts are estate planning mechanisms by which a property owner can ensure that the right person inherits his or her assets. Without a trust or will, assets are passed down in accordance with probate law, which generally dictates that assets are inherited according to the relationship between the beneficiary and the decedent (e.g., son, daughter, brother, etc.)
What goes into a will?
Wills can include things like a residential home or a family heirloom, but they cannot go against the rules of retirement accounts. With a 401(k) or other retirement plans, a person named as a beneficiary on the plan is the person who inherits the accounts. The husbands and wives of married 401(k) holders are presumed to be the beneficiaries unless the couple agreed otherwise.
If someone wants to dictate exactly when a child or grandchild will receive an inheritance, rather than having it be upon the grantor’s death, he or she can set up a trust fund. With either a will or a trust, the grantor will have to name an executor or a trustee, respectively, to ensure that assets are distributed from the will or trust in accordance with their terms.
There is no one-size-fits-all solution for estate planning. Individuals should consult with an estate planning attorney to determine which course of action is best suited to their needs.