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What are three common ways of passing down assets?

If a person in Florida wants to leave an inheritance for his or her children or other family members, that person must set up the appropriate legal documentation. However, the methods by which a person passes down their assets are not necessarily as complicated as some people might envision. So what are some common ways that people leave their assets to others?

Three common ways of leaving an inheritance are through beneficiary designations, trusts and wills. A beneficiary designation is something that many people do without even thinking of it as a means of leaving an inheritance. This method of setting up an inheritance includes listing a beneficiary for assets like life insurance policies and retirement accounts. Upon that person's death, their designees will then receive the asset.

Unlike beneficiary designations, using a trust for inheritance purposes requires a little more legal set-up work than just naming a beneficiary for the assets. Setting up a trust requires the person leaving the inheritance to deposit assets into the trust. A trustee will then oversee the assets in the trust for the beneficiaries of the assets. A trust agreement will usually stipulate how and when the beneficiaries will receive the assets from the trust.

Though beneficiary designations and trusts are both common methods of setting up an inheritance, most people are probably more familiar with wills. A will is simply a legal instrument, in which a person specifies how and to whom their assets should be distributed upon his or her death.

The basic concepts of wills, beneficiary designations and trusts are not terribly complex. On the other hand, many people in the Winter Haven area will want to use a combination of all three methods to create an inheritance plan that accounts for all of the assets in their estate.

Anyone who is thinking about setting up an inheritance plan should first talk everything through with their family members or other people who will inherit the assets. Then they can begin the process of setting up the legal documents to properly address all of their wishes for distributing their assets.

Source: Huffington Post, "How to Leave Your Children an Inheritance," Steve Cook, July 8, 2015

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