Consider Estate Expenses When Preparing a Will

Creating an estate will is critical for those that want to plan for the future. A will is going to govern what happens to your assets when you pass away. While many people go through the process of setting up a will, most do not take into consideration estate expenses during this process. Here are a few things to consider about how estate expenses can affect your beneficiaries.

Leaving Debt

When you are coming up with your will, you need to take into consideration how your decisions are going to affect your beneficiaries. You want to do your best to leave your beneficiaries something that they will appreciate receiving. Most people enjoy getting some type of financial reward as part of an inheritance. However, in some cases people have to deal with debt whenever they receive their inheritance. Ultimately, you want to address any issues surrounding debt on the front end, so that your beneficiaries do not have to worry about this after you are gone.

Accounts

When preparing your estate, you need to think about the accounts that you have debt with. For example, many consumers have some type of credit card debt in their name. If you are married, you might want to consider transferring any balances that you have to a credit card in your name only. Many married couples tend to get joint credit card accounts. There is not anything necessarily wrong with getting a joint account, but it could end up hurting your spouse if you were to pass away. Even if your spouse never used the card, if their name is on the account, they will be left with the entire debt if you die. Instead of taking the chance of leaving a pile of credit card debt to your spouse, you should take the necessary steps to get the accounts transferred into your name.

Taxes

When you pass away, the executor of your will is going to have to worry about taxes for you. Whoever is taking care of your estate is going to have to file multiple tax returns for you. They will have to file your personal tax return, as well as a tax return for your estate. If your estate is large enough, they may have to deal with an estate tax as well. You need to consult with a tax expert in order to take the necessary steps to lower tax liability for this situation. There may be steps that you can take to provide more tax-free money for your beneficiaries upon your death.

Planning the Expenses

You should take the time to sit down with the executor of your will and talk about how everything will be paid for. For example, if you plan on a life insurance settlement paying for your mortgage balance and your credit cards, you need to alert the executor of this decision. They will need to make the necessary payments when the time comes.

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