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You are here: Home / Archives for Claire Hunsaker

How to Transfer Assets to Children Before Death

May 19, 2022 by Claire Hunsaker Leave a Comment

If you are a parent, you already know it’s important to plan for your children in case something happens to you. One way to do this is by transferring assets to them before you die and in your estate planning. This can be done in a number of ways, and each has its benefits. In this blog post, we will discuss the different options available to you and how each can help protect your children’s future.

Remember: Generational Wealth building isn’t just for parents: grandparents, aunties, and uncles can change the shape of the entire next generation.

Work with A Family Law Attorney and a Tax Planner

family law attorney

There are many different ways to transfer assets to your children, and almost all of them require a lawyer and have tax implications. It is important to consult with an attorney as well as a tax planner, both to choose the transfer structure that is right for you and also to ensure that the documents are compliant with Federal and State property and tax law.

Draw Up a Will

One way to transfer assets to your children before death is through a will. A will is a legal document that outlines how you would like your assets to be distributed after you die. A will doesn’t actually transfer ownership of your assets until after you die, but it can be used to specify exactly who should receive what.

If you have a will, it is important to keep it up-to-date as your life and circumstances change. You should also review it regularly with a family law attorney to make sure it still meets your needs.

One important note: a will is great for establishing your wishes for the distribution of your assets are followed, but it will not keep your estate out of probate. Probate is the legal process of distributing a person’s assets after they die, via the courts in your state. It can be time-consuming and expensive, if you have substantial or complex assets, so many people choose a trust.

Create and Move Assets Into A Trust

will and trust documents

A trust is an arrangement in which one person (the trustee) holds and manages property for another person (the beneficiary). It’s a critical part of estate planning. Transferring assets into a trust can help avoid probate because the trustee can distribute the assets according to your wishes without having to go through the court system.

Moving assets into a trust that can be managed by a trustee will give your children access to the assets when they reach a certain age while ensuring that the assets are managed responsibly.

One common type of trust is a living trust, which is created during your lifetime. You can name yourself the trustee, which gives you control over the assets during your lifetime. Then, when you die, the trust remains in force and the beneficiary can receive the assets without having to go through probate. You can even trigger the execution of your trust before you pass away.

This is a good option if you want to maintain control over the assets during your lifetime, but also want to avoid probate.

Name Beneficiaries on Financial Accounts and Insurance Policies

name beneficiaries

Most financial accounts and life insurance policies allow you to name a beneficiary. This means that the account or policy will be transferred to the named beneficiary upon your death, without having to go through probate. Having updated beneficiaries is the cheapest and easiest way to transfer assets such as retirement accounts, bank accounts, and life insurance policies.

It is important to review your beneficiaries regularly and update them as needed, especially after major life events such as marriage, divorce, birth, or death. This can be especially important for single parents and blended families.

Transfer Assets During Your Lifetime

Another way to transfer assets to your children before death is through a gift or by selling the asset to them for less than its fair market value.

The upside of this option is that you are still around to help them manage the asset. The downside is that lifetime transfers have serious tax implications that vary depending on the value of the asset and your state’s laws.

Gift Assets to Your Children

You can give $16,000 per year, per child (or any other recipient) without needing to file any tax forms or pay any tax. If you are married, you and your spouse can each give $16,000, for a total of $30,000 per child. More importantly, the current (2022) Federal gift tax lifetime limit is $12.06 million per person, and you can also double it if married. While it would require you to file a form, gifts of any size can be given to your children without owing any gift tax, as long as the total amount gifted during your lifetime does not exceed the $12.06 million limit.

Sell Assets to Your Children for Less Than Their Fair Market Value

sell assets to children

You can also sell assets to your children for less than their fair market value. This is The most advanced move, absolutely requires a competent lawyer and tax planner, and is generally most appropriate for family businesses. Generally, this involves a contract in which you sell the asset to your children for an agreed-upon price that is less than the fair market value.

There are a few different ways to transfer assets to your children before death. The most common ways are through a trust, naming beneficiaries on financial accounts and insurance policies, or transferring the assets during your lifetime.

Each method has its benefits and drawbacks, so it is important to discuss your options with a family law attorney and tax professional to choose the option that best suits your family.

Claire Hunsaker

Claire Hunsaker, ChFC®, is a Chartered Financial Consultant featured in American Express, Forbes, Parents, Real Simple, and Insider. She offers free financial planning for single women through AskFlossie, where she is CEO. Claire holds an MBA from Stanford and is an IRS-certified Tax Preparer. She has 20 years of business and leadership experience and approaches money topics with real talk and real humor.

Filed Under: business planning, Estate Planning, kids and money, Personal Finance, Planning, Tax Planning

Eight Ways To Counter Inflation

May 4, 2022 by Claire Hunsaker Leave a Comment

Counter Inflation

While it’s a problem that has been around for centuries, there are ways to counter inflation. It can be difficult to fight against, but with the right tools and strategies, you can overcome it. In this blog post, we will discuss nine ways that you can counter inflation and protect your hard-earned money. Keep reading to learn more!

What Is Inflation and How Does It Affect Your Money?

Inflation is the sustained increase in the prices of goods and services. This means that, over time, your money will buy less and less. Inflation can be caused by a variety of factors, including economic growth, supply and demand imbalances, and central bank policies.

People experience inflation at the gas pump, at the grocery store, and when they pay their utility bills.

Inflation is often described as a “hidden tax” because it erodes the purchasing power of your money. For a lot of people, inflation is confusing especially since we haven’t had a lot of it in the last 30 years.

The History of Inflation

In 1921, the U.S. Bureau of Labor Statistics (BLS) began publishing a national consumer price index (CPI), including estimates of the CPI back to 1913. This uses real information about what families spent money on (and how much they spent) across different geographies in the United States. Today, the data focuses on urban consumers.

In the United States, inflation has averaged about 2.36% per year from 2000 to 2020. Pretty close to the Federal Reserve target of 2%.

However, there have been high inflation spikes in the past. After World War II, when price controls were removed, the G.I.s came home and increased consumer demand, spiking prices up over 20%. The Korean war sent inflation to nearly 10%. And the Oil shocks of the ’70s sent prices up nearly 15% in two major spikes.

Today, many people are experiencing high inflation for the first time.

How Can You Protect Your Money From Inflation?

There are a few things that you can do to help protect your money from inflation.

  • Real estate is a great hedge against inflation. When prices go up, the value of real estate usually goes up as well. This is because people still need a place to live, and they will pay more for housing when the cost of other goods and services rises.
  • Invest in assets that will increase in value as inflation rises. This includes things like stocks, real estate, and precious metals.
  • Another way to protect against inflation is to ensure your income is protected if you currently depend on it, through disability insurance. This is especially true for single-income households.
  • You can also hedge against inflation by investing in Treasury Inflation-Protected Securities (TIPS). These are bonds issued by the government that provide you with protection against inflation. Series I bonds allow investors to ride inflation. These bonds are marked to inflation, and issued by the U.S. government. They provide investors with a stream of income that increases along with inflation. They can be purchased through Treasury Direct and have some penalties if you sell them early.

Ways To Counter Inflation Strategically

Inflation can be a scary thing, but there are ways that you can protect your money from it.

First, try to reduce the variable interest rate debt that you have. This is not the time to pay down low fixed interest rate mortgages. Instead, focus on reducing the balance of any credit card debt or adjustable-rate loans that you have.

Second, reduce spending on high inflation items. Gas, for instance, is up 40% in 2022. Similarly, home furnishings and appliances are up over 10%. Rethinking how you spend on high-impact items can help reduce the overall impact of inflation on your budget.

Third, don’t forget to include and possibly increase inflation in your financial planning. When you are estimating how much money you will need in retirement, be sure to use an inflation-adjusted number, and review that number annually.

Finally, try to stay informed about what is happening with inflation. This will help you make the best decisions for your money.

Final Thoughts

Inflation can rattle even the most steely investor, but there are ways that you can protect your money. A time of high inflation is a time to be conservative and watchful.

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Claire Hunsaker

Claire Hunsaker, ChFC®, is a Chartered Financial Consultant featured in American Express, Forbes, Parents, Real Simple, and Insider. She offers free financial planning for single women through AskFlossie, where she is CEO. Claire holds an MBA from Stanford and is an IRS-certified Tax Preparer. She has 20 years of business and leadership experience and approaches money topics with real talk and real humor.

Filed Under: Personal Finance Tagged With: Inflation

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