Estate planning can come with a lot of questions for Maryland residents. While some think the process ends with figuring out who gets what, there are also a lot of financial and logistical questions that need to be answered in the planning process.
Oftentimes, adult beneficiaries who are inheriting assets will have to pay some form of estate taxes or income taxes on those belongings. There are also probate court costs and timelines that people setting up their estate plan should take into consideration, to make the process as easy as possible.
What’s the best way to pass an inheritance along?
How you pass down an inheritance to your adult beneficiaries depends entirely on the circumstances of your family. Despite this, some people decide that giving adult beneficiaries their inheritance in just one lump sum is the best way to go.
While this might be the simplest option, it isn’t always the best option. Many parents might have concerns about their adult children blowing through the inheritance too quickly, or not being enough when they finally get it.
Should you use a trust fund?
Many people decide to pass inheritances down through trusts, to avoid both probate and estate taxes. But trusts can also give you more control over how the adult beneficiaries use their inheritance.
You can have a discretionary trust fund that gives certain terms and conditions to the money. For example, you can say that the money left in a trust fund should only be used for school fees.
Other trusts will allow you to pay out the money in stages, to make sure it lasts a long time. It does take some time and a lot of money to figure out what trust fund is right for you.
It might be overwhelming to answer all of these questions at once. But exploring all of these options can help make the process easier for your adult children and beneficiaries.