Estate: Protect Your Beneficiary's Inheritance
33607
Finance > Personal Finance
Jun 23, 2007
voudrie12
Estate: Protect Your Beneficiary's Inheritance
An inheritance is the precious fruit of years of labor. It is an expression of love. Nowadays, more than ever, an inheritance is something that should be protected. All too often, inheritances are squandered or lost because of a lack of planning by those giving it. Read on to discover how to easily change that. There are many dangers that can threaten the inheritance you leave your children or heirs. The number one concern of many of the people that I talk with is that an inheritance will be lost if the beneficiary gets divorced. In today's society, the probability of that occurring is greater than ever before, regardless of religious beliefs. They dread the thought of their money being lost to a departing spouse instead of remaining with their child or grandchildren. An often overlooked danger that many people fail to recognize is the threat of loss from lawsuits or creditor's claims. We live in a very litigious society. If the person receiving your estate is in even a simple car wreck, the chances are high that they'll be sued. Heaven forbid someone should die in the accident. The estate you left is like a pot of gold just waiting to be discovered by predatory lawyers. Your heir could get into financial difficulty. A business could fail. Whether through mismanagement or unforeseen circumstances, if your heir gets into financial difficulty, creditors will go after the money inherited. Receiving your inheritance could also cause your heir to lose benefits they would otherwise be entitled to. For instance, if disabled and receiving government benefits, receiving an inheritance could cause them to lose those benefits. There are times when the government would claim those funds in repayment for benefits previously paid. A college student could lose scholarships that are based on financial need, as well. It's important to take a long-term perspective on the estate you leave behind. If handled properly, even a modest inheritance can be a legacy that will provide financial security to your loved ones for generations. Therefore, it makes sense to not have to pay Uncle Sam estate taxes every time the money passes from one generation to the next. The person receiving your inheritance may already be financially successful. If their estate isn't already large enough to trigger estate taxes when they die, the receipt of an inheritance could put them over the limit. The result is as much as 50% of the money you leave behind could go to Uncle Sam when your child passes it on to your grandchildren and when your grandchildren pass it on to your great-grandchildren. As you can see, there are many reasons that it's important to protect an inheritance. And it shouldn't be the child's responsibility to do so. Once they receive it, there are few options available to them to protect it. Instead, the parents need to take responsibility to protect what they leave behind. Traditional methods of protecting the estate you leave behind meant your heirs would lose control. An outsider would be responsible for how the money was invested and would control the distributions to your heir. These methods were cumbersome and expensive-which is why most people didn't use them and instead distributed their estate outright. The solution to these problems is a new tool called a Beneficiary Trust. This trust allows the estate you leave behind to be protected from loss due to divorce, the claims of creditors or even bankruptcy. It allows your wealth to be passed from generation to generation without losing up to 50% of it in taxes each time it is transferred. It won't affect eligibility for government benefits or scholarships. Best of all, your heir retains full control. The heir makes all the financial and investment decisions. Virtually anything that can be accomplished by the heir without this trust can be done with it. And the costs involved are small enough that it should be used even for small estates. A Beneficiary Trust is an extremely flexible vehicle, yet isn't understood by many attorneys.
Nationally-syndicated financial columnist and Certified Financial Planner Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He will answer your financial question FREE at http://www.guardingyourwealth.net
send email to voudrie12
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
A reader recently asked if his 401(k) could be rolled over, by his beneficiary, to a 'stretch' IRA after his death. Read on to discover an answer that will protect your beneficiaries from tens of thousands of dollars in unnecessary taxes and keep your gif
Category:
Providing for adequate health care is one of the top concerns for today's seniors. And yet, many find themselves coming up short when that need is for long term care. With costs skyrocketing and government purse strings tightening, planning for such care
Category:
Equity-Linked Certificates of Deposit are a safer, low-cost alternative for those who must have an Equity-Indexed Annuity type of investment. These little-known investments allow you to participate in the growth of the market index while your principal is
Category:
An inheritance is the precious fruit of years of labor. It is an expression of love. Nowadays, more than ever, an inheritance is something that should be protected. All too often, inheritances are squandered or lost because of a lack of planning by those
Category:
Variable Annuities now offer a Guaranteed Minimum Withdrawal Benefit which allows you to earn 5% or 6% even if the market drops significantly. Undoubtedly, you will be pitched a variable annuity or pressured to transfer your existing one into a new contra
Category:
You should continue to grow your nest egg even when retired--unless you've been blessed with more money than you will ever spend! Last week I discussed in detail how retirees can boost their income without taking on unnecessary risk.
Category:
Everybody wants to find the secret to investing on Wall Street. But the truth is, you don't have to be a genius to be a successful equity investor
Category:
Few topics confuse investors more than figuring out what estate-related documents they need. Living Wills, Living Trusts, and Powers of Attorney are just a few of the terms that most find hard to define, let alone understand.
Category:
I've been predicting for some time now that Equity-Indexed Annuities and the sales practices associated with them will be the Next Big Scandal of the financial services industry. And now my predictions are coming true.
Category:
If you're getting ready to retire with a large IRA rollover, or your current IRA account is nearing the end of any surrender penalties, chances are you'll be pitched this product. So this week I'm going to reveal more secrets about the truth behind the va
Category:
Clyde and Claudette's financial future is now ruined! Make sure it doesn't happen to you. These tips will help you protect yourself from the time-bomb that devastated them.
Category:
Everyone would love to retire early, but they also desire to be free from the fear of running out of money. Changing your attitude toward investing and the approach you take will help you accomplish both. Read on to see how you can retire years sooner and
Category:
Don't you just love government red tape? This time the bureaucratic process has given us a real doozy--it's called the Health Insurance Portability and Accountability Act or HIPAA for short. And the unintended affects of HIPPA could have a dramatic effect
Category:
Getting a new mortgage? Watch Out! Mortgage brokers (even at banks) get paid on commission. As interest rates rise, they must become more creative to make a living. Many are honest, but there's plenty that won't blink an eye at taking advantage of uninfor
Category:
My mother-in-law recently passed away after a long and courageous battle with cancer. Throughout her battle, our family had to deal with many emotional and legal issues. Over the next couple weeks, I'll be discussing these in more detail in the hope that
Category:
Doris from Minnesota is considering transferring her assets to her son so they won't be lost to Medicaid should she need assisted-living or nursing home care. Is that the right move? If so, what's the best way to do it? Read on to find out.
Category:
The thought that you may not need life insurance is anathema to most life insurance agents. But as a Certified Financial Planner who is also a life insurance agent, I have a different point of view. There are times when you may not need life insurance.
Category:
Equity Indexed Annuities (EIAs) have become the hot product of late. I believe you can easily find other alternatives that will bring a better return, without locking up your money or levying hefty surrender penalties.
Category:
Don't cancel your life insurance policy without reading this first! Depending on your situation, you may be losing tens of thousands of dollars if you do. If you have a life insurance policy that you no longer can afford or need, consider selling the poli
Category:
One of the biggest mistakes I frequently see investors make is needlessly losing control of their money. Any time you pay a hefty commission or face surrender penalties in order to get YOUR money you lose control.
Category:
Other links at Finance > Personal Finance
Has your identity been stolen? You're not sure? Well there are certain signs to look out for. If you have you notice any of the following, your identity may well be in danger.
Category:
The roll-out of a new microfinance institution (MFI) could see some of the most financially-excluded people in Britain gain access to low-rate loans, it has been announced.
Category:
Saving money can be a real challenge.If you push yourself with challenging goals, you can find out just how possible it is to really save a lot.
Category:
Site Sponsor
Directory Statistics
Articles: 68252
Categories: 501
Yahoo Entertainment
