3 options for transferring financial assets to your heirs

On Behalf of | Oct 30, 2022 | Estate Planning |

As you set up your estate plan, your main goal may be to transfer the financial assets that you own on to the next generation. You also have to address some physical assets, such as family heirlooms or a house, but finances play a big role.

Exactly how you do this depends on your situation and your unique goals. Here are three potential options to consider.

1. Using payable on death accounts

One option is simply to make your financial accounts payable on death accounts. You can then pick a beneficiary. When you pass away, the designated beneficiary takes over the account and they immediately own all of the assets that are contained within it. Nothing else needs to happen.

2. Using a trust

Another option is to use the assets in your estate to fund a trust. This trust can then set the money aside for some sort of specific purpose. For instance, you can delay when your heir receives the money if you think they’re too young to get it right away, or you can set it aside for a specific purpose, such as paying for college tuition.

3. Using your will

Of course, you can also use your will to write out which assets are supposed to go to which people. But this is often too simplistic. For instance, your life insurance policy is going to circumvent your will, so anything relating to life insurance doesn’t have to be followed by the insurance company. A will can be a good baseline, a place to start, but you definitely want to look into more advanced financial tools.

As you do this, take the time to carefully consider all of the legal steps and the options you have.