You've worked hard to accumulate wealth,
but to ensure that your legacy reaches your
heirs as you intend, you must make proper
arrangements. It is important to speak
with your family to ensure that they
know your wishes about how you want
your legacy to pass. These conversations
will help ensure as smooth a transition
as possible. There are four basic ways
to leave a legacy: (1) by will, (2) by trust,
(3) by beneficiary designation, and (4) by
joint ownership arrangements.
Wills: A will is the cornerstone of any
estate plan – no matter the size of your
estate and even if you have implemented
other estate planning strategies. You
can leave property by will in two ways:
making specific or general bequests.
A specific bequest directs a particular
piece of property to a particular person. A
general bequest is typically a percentage
of property or property that is left over
after all specific bequests have been
made.
Trusts: You can leave property to your
heirs using a trust. Trust property passes
directly to the beneficiaries according to
the trust terms. There are two basic types
of trusts: revocable and irrevocable.
Revocable trusts are flexible because you
can change the terms of the trust and
the property in the trust. This is a good
way to protect your property in case
you become incapacitated. Irrevocable
trusts can't be changed or ended except
by its terms, but can be useful if you want
to minimize estate taxes or protect your
property from potential creditors.
Beneficiary designations: Property that
is contractual in nature, such as life
insurance and retirement accounts,
passes to heirs by beneficiary
designation. Beneficiaries can be persons
or entities and you should name primary
and contingent beneficiaries.
Joint ownership arrangements: Two
persons can own property equally, and
at the death of one, the other becomes
the sole owner. This type of ownership
is called joint tenancy with rights
of survivorship (JTWRS). A JTWRS
arrangement between spouses is known
as tenancy by the entirety, and several
states have a form of joint ownership
known as community property.
Another type of joint ownership is called
tenancy in common where there is no
right of survivorship. Property held as
tenancy in common will not pass to a joint
owner automatically. Joint ownership
arrangements are useful and convenient
with some types of property, but may not
be desirable with all of your property.
Please feel free to contact us with any questions you have at 941-366-7222.
This material is provided for general information purposes only. Canandaigua National Trust Company of Florida is an affiliate of Canandaigua National Bank & Trust. Investments are not FDIC insured, not bank deposits, not obligations of, or guaranteed by, Canandaigua National Bank & Trust or any of its affiliates, including Canandaigua National Trust Company of Florida. Investments are subject to investment risks, including possible loss of principal amount invested. Past performance is not indicative of future investment results. Before making any investment decision, please contact your legal, tax or financial advisor. Investments and services may be offered through affiliate companies.