How To Split Your Estate Fairly Between Your Beneficiaries
There is a lot of disagreement between family members.If you want to divide your estate equally, it might not be the best solution.Estimating your estate's value is the first thing you should do.Some beneficiaries should inherit more than others.If you gave more financial assistance to one person while you were alive, you might want to leave that person an equal amount.
Step 1: Pick out your assets.
You need to know what's in your estate to divide it fairly.Take a look at which of the following assets you own.This includes your home, secondary residences, plots of land, and more.It is part of your estate if you own it.Business interests are important.It is possible that you are the owner or partner of a business.If you can transfer your business interest after death, you should find your operating documents.There is personal property.Your personal effects include furniture, clothing, jewelry, books, guns, computers, etc.There is intellectual property.Creative works are assets if they are owned by you.If you wrote a novel, you own the rights.Without your name on it, you can own trusts and other property.
Step 2: A list of financial assets can be created.
You probably have more than one financial account, which is part of your estate.The following are life insurance policies.There are retirement accounts such as IRAs, and employer-sponsored plans.Investment accounts include broker accounts and mutual funds.Checking, savings, money markets, and CDs are included in the bank accounts.Money due to you.You might have taken out a loan.Whoever owes you money will have to pay your estate.As part of your estate, you can count this amount.
Step 3: Find assets that will not pass through the courts.
If you don't have a will, you might already have an estate plan.Life insurance and retirement accounts are not distributed through probate.This person will inherit from you if you name a beneficiary on the policy.There is a survivorship feature on any account or property.You might have a bank account with the right of survivorship.The account passes automatically to your spouse when you die.Real estate can be owned in this way.If you want to change the beneficiary designation on your life insurance policy or maintain the right of survivorship, you should consider creating an estate plan.
Step 4: You should get a copy of your divorce decree.
If you divorced, the judge divided your property.A judge might have given you half of your retirement account.Before you divide your estate, you need to know this.If you don't have a copy of the divorce decree, ask your divorce attorney.To get a copy of your divorce decree, you might need to go to the court clerk.To see what you no longer own, read the decree.
Step 5: Have the property looked at.
You have to know the current value of your assets.Cash and investments are easy to use.Other assets will need to be assessed.You can find a qualified person.A qualified appraiser should be a member of at least one of the national associations.Records about the asset's value should be kept.Some assets will change in value over time and may need to be re-appraised.
Step 6: Define what it means to be fair.
If you have three children, you might want each one to get a third of your estate.Depending on your circumstances, you could define fair differently.If one of your beneficiaries is disabled, they may need more resources to take care of themselves.You might want to establish a trust for their care.One beneficiary might be your spouse, who you want to give a larger portion of your estate to than you give to your children.Your step-children could be some of your beneficiaries.They will most likely inherit from their biological parents.You might want to leave them less than you leave to your biological children.You might have given someone a gift during your life.It is possible that you provided the down payment for a child's home.A beneficiary might have helped grow a family business.It's a good idea to leave the business to your other children.One of your beneficiaries could waste money if they have a gambling or substance abuse addiction.A trust can help ensure that they don't spend the money unless they meet certain conditions.
Step 7: If necessary, divide your estate equally.
Take the value of your estate and divide it by it's worth.It is easy if you have mostly cash in your estate.Most of your wealth is tied up in land, homes and vehicles.You can divide assets based on their value.You could have two children.Your major assets are a home worth $200,000, a summer home $100,000, and a retirement account $100,000.The other assets can be left to the second child.This results in the same distribution.You should tell your executor to divide assets equally.You are kicking the can down the road and leaving it to your heirs to divide the property.If you want your beneficiaries to get the same amount of money, you should instruct your executor to sell everything.Life insurance policies, retirement accounts, and investment accounts are some of the assets that won't pass through the courts.You have to change the beneficiary designation so that things are the same.In community property states like California or Nevada, your spouse may still get aPayout even if they were not your beneficiary.
Step 8: If your heirs want sentimental gifts, ask them.
A doll house might not have much monetary value.If you don't give it to her, she will resent you, and it could be your youngest daughter's favorite toy.If you want to head off disagreements after your death, ask your beneficiaries what they want.A separate memorandum can be used to identify who gets what property in your will.Mention the memorandum in your will or trust.It is easy to give sentimental objects away if they are not worth much.Problems can arise if the sentimental gift is valuable.Think twice before giving a child a summer camp because they always loved it near the lake.The other beneficiaries may resent this major gift.
Step 9: A lawyer can help you create an estate plan.
Unless your estate is very simple, you will benefit from an estate planning attorney's advice.They can help you decide how to divide your estate.Referred by your local or state bar association.Call the lawyer and schedule a consultation after you have a name.How much will the consultation cost?The lawyer will probably send a form for you to fill out.The lawyer needs this information to help them figure out how to divide the assets.Make sure to fill out the form completely.
Step 10: Use appropriate testamentary vehicles to leave assets.
A will or living trust can leave your assets to your beneficiaries.They may not be appropriate in some situations.Appropriate vehicles are part of an estate plan.If other options are appropriate, a lawyer can help you identify them.If you have a disabled heir, you should use a special needs trust.If you do that, your heir will still be eligible for government disability benefits.You might want to create a QTIP trust if you have children from a first marriage.Your surviving spouse can live in property and get income from assets while living, but the assets are passed on to your children after your spouse's death.
Step 11: The effect of taxes should not be forgotten.
If you want to make an equal distribution of your estate, you should consider the effects of taxes.Discuss the effect of taxes with your attorney.You might have given money to a child.There will be tax consequences if you treat it as a loan.Your heirs may have to pay inheritance taxes.You may be able to reduce the tax burden on your estate if you put your money into trusts.
Step 12: Your estate plan needs to be updated frequently.
30 years before you die, you might draft a will.You will need to update the plan in the interim.You should meet with your estate planning attorney at least once a month.You can ask your attorney if you need to change your designation.If you are trying to divide your estate equally, you should update your plan.The value of your investments can go up or down.You may have sold an asset that you intended to give to a beneficiary.You may need to revise your estate plan in these situations.If tax laws change, you should update your estate plan as well.
Step 13: It's a good idea to set expectations in advance.
It is possible that your beneficiaries will get an equal share of your estate.If you are giving shares that are not equal, you should explain why.If you want to talk about how you are leaving assets, have a meeting and write a letter to your beneficiaries.Blindside someone after death is the worst thing you can do.Some of your heirs are expecting to inherit a certain amount of money.They might be making decisions based on those expectations.It is necessary to let them know the truth before you die.Inform them if they aren't getting as much as they expected.
Step 14: The estate needs to be divided equally.
There is no need to divide the estate equally.Your children might judge how much you love them based on how you leave them.If you want to reduce conflicts between children, you should divide the estate equally.If a child tells you it's okay to give another child more, don't listen.They may be hiding something.Write out explanations and justifications for your gifts if you're worried about fighting or resentment.Messages should be left explaining why each person is receiving a gift.
Step 15: You should choose your trustees wisely.
Your executor is responsible for administering your estate after your death.The assets will be distributed according to your trust.You should choose someone you can trust.Ask your lawyer something.It's a good idea to avoid naming a beneficiary.Your other beneficiaries might think you are giving preferential treatment.Instead, you could name a trust company.