Passing along assets after death is a tricky business – and subject to error. Aside from the complexity, making a will and other plans for heirs requires periodic updates because circumstances change.

Leaving an inheritance behind can be the easiest part. Any possessions that outlive you become the inheritance of another just like that. In fact, the laws of every state provide for the “intestate succession” of assets for which there are zero post-mortem plans in place.

Then again, that is not the kind of potential mess we want to leave behind (or how we want to be remembered). As the old adage puts it, most folks do not “plan to fail, they just fail to plan.” In this sense, leaving an inheritance behind can get a bit tricky and can take some expert guidance to do it well.

This business of leaving an inheritance was taken up by Forbes recently in an article titled “How To Inherit Wealth Without Screwing Up.” (Incidentally, it is hard to inherit wealth without screwing it up, but this piece has far more to do with the ways you can leave it behind and screw it up, in spite of the title).

When it comes to inheritance planning, there is the will itself and then there is the estate plan. For all the drama (both literary and real drama) surrounding the will, it only does so much. Truly, the will only assists with the probate process, but that has nothing to do with retirement accounts that have a named beneficiary, insurance policies that have named beneficiaries, bank accounts that transfer on death, or assets held jointly with rights of survivorship. Not to mention a host of other sources of legal and fiduciary clutter.

The estate plan is the concept that pulls it all together and considers your life, your assets, and your family in a holistic way.

The key point of the article is that leaving an inheritance requires understanding and appreciating the big picture. To get it down right, for the good of your family, it helps to have competent legal counsel in your corner and after you have such a plan review it regularly (at least every two years).

Reference: Forbes (November 22, 2013) “How To Inherit Wealth Without Screwing Up”

Prenups are designed to protect assets brought into the marriage, and if you don’t have any yet, don’t feel as if you’re doing something wrong by not asking your partner for a prenup.

Prenuptial agreements – prenups – are a study in contrasts. On the one hand, you are pledging to love and care for your future spouse for life, for better or for worse, while on the other hand you are jotting out a kind of contingency plan. Face it: a prenup is not a romance enhancer.

Still, especially with blended family, a prenup can be a prudent tool to maintain peace and domestic tranquility between the respective sides of the to-be-formed family. Love may be blind, but it is best to enter the marriage with both eyes open. Not surprisingly, the use of prenups is on the rise.

For an interesting perspective on the prenup, consider a recently published article from Reuters called “Three things to consider before you ask for a pre-nup.” What exactly should you consider?

Well for starters, every prenup represents the coming together of two very different and complex financial lives, two lives of separate assets and separate liabilities. Things can get complicated quickly. A prenup, however, offers both a way of seeing difficulties and of resolving them far in advance.

Additionally, when this is your second or third marriage with children at each level, protecting the inheritance of each level of children can be helped with a prenup.  You ant a clear designation of what financial assets that you bring into the marriage so that those assets can be set aside for children of your previous marriages if you so desire.

Another interesting take-away from the article is that future inheritances ought to be addressed in the prenup, not just your current income and assets. How and when an inheritance may be received can be extremely important, especially when the inheritance may include important family assets, even ownership in a family business. Consequently, those planning for such “family assets” in their estates today already may be asking of their children to include these assets in the prenuptial agreement negotiations simply to protect the family.

There is much to consider when it comes to planning a prenup, in addition to a wedding itself. If you are needing a little more encouragement, then a Forbes article titled “Why I Decided To Get A Prenup — And So Should You” may help address some of your concerns.

Reference: Reuters (November 27, 2013) “Three things to consider before you ask for a pre-nup”

With the holiday giving season in full swing, you may be re-evaluating just how much to give to charitable causes and where to donate.

We are now in the traditionally charitably-minded time of year. Charitable giving is an important way of giving back. In addition, it can be an important way to do a little good somewhere in the world (who knows, maybe a great deal of good). That said, and even if you are ready to give back or help out, just how do you decide what to do and through whom?

For those going-to-be-givers making year-end charitable gifts, these issues are significant because they want to be wise with their gifts.

An increasingly popular metric is “effectiveness” or the ability of a charity to make a difference.  In otherwords, how effectively does your charity deal with the money that you give them.   To some, this is a technical question and involves hard data, number-crunching, and non-biased analysis. Resolving the technical is an easier matter in the digital age.

Nevertheless, measuring how a charity makes a difference is also a question of how you define “making a difference” itself. The New York Times considered this in an article titled “Making a Difference in This Season of Giving.” If you are still reading, and therefore likely “charitably inclined,” then it is worth your time to read the original article.

How do you determine the values most important to you and how do you privilege certain decisions over others?

The article jumps into the work of a philosopher, Peter Singer. The debate turns on whether one ought to give locally or to the very neediest wherever located. This is not merely an abstract matter to resolve, as there are some hard data points, principles, and even outright charitable suggestions to mull over.

Regardless whether you agree with Singer or any other thinker for that matter, this can be a very meaningful approach to the question of what, how and why to give.

Time is ticking for those year-end gifts, though. Perhaps a new perspective can help you make some decisions you have been debating all along. Now, practically-speaking, how and what to give is another important point to get nailed down. If you have your values aligned, this can be the beginning of a charitable life plan, too.

Reference: The New York Times (December 6, 2013) “Making a Difference in This Season of Giving”

For many Americans, the task of putting together an estate plan is one of those “to-do’s” that never gets done.

Tic-Toc-Tic-Toc … it is that time of year again. Yes, it is New Year’s resolution time. Is estate planning likely to be one of your “resolutions” for 2014?

We all know that an estate plan is a matter of personal choice. No one truly can plan your estate for you, at least like you would. Trouble is, you might know what needs to get done, and you might have put it on that master to-do list, but you still need to have the resolve to get it done. For many of us, estate planning is that perennial subject on the to-do list.

No surprise, but “estate planning” ranks right near the top when it comes to the most often broken New Year’s resolutions. You might say it is somewhere between learning to play the guitar and running a marathon. On the other hand, compared with many such resolutions estate planning is an entirely unique challenge.

So give this year’s resolution some substance. The failure to do so can result in financial heartbreak for your family.

For an easy introduction and some encouragement, consider some advice from a recent MarketWatch article titled “5 estate-plan strategies for boomers.”

The five strategies?

1. Create a will or trust.
2. Create a power of attorney.
3. Create a health-care power of attorney and living will.
4. Check the titling of your assets.
5. Start with your family.

In many respects, an estate plan can be rather simple. However, estate planning is much more than generating a pile-of-paper from an impersonal online service or program. Be sure to read the original article for a developed understanding of what each strategy means and what each can do for you and your loved ones.

Remember: estate planning is not a task, but an ongoing activity. Once the ink is dry, you cannot simply forget about it. Things change, whether in the law or in your family itself.

Reference: MarketWatch (November 29, 2013) “5 estate-plan strategies for boomers”

With college costs already astronomical and rising, saving for them isn’t just a year-end thing. But if those prices – … – have got you down, there are some ways to max out your savings before 2013 ends. You can stuff a lot of money into a 529 college savings plan now and then do the same thing at the beginning of 2014 – a strategy that advisers say they are seeing many wealthy clients adopt this year.

The year is almost up. Nevertheless, there is still one gifting strategy to consider. In fact, this strategy alone could give your college-bound grandkids an extra leg up on their advanced education. The timing and confluence of a number of gift tax and contribution rules may allow you to more than “fund” a 529 College Savings Plan. Did you know you can actually super-fund it?

As though just funding a 529 were not good enough, Reuters provided the skinny on super-funding recently in an article titled “Should you super-fund your 529 college savings plan?”

The short answer is “yes,” if you have the means. Under the right circumstances, it may be more than worthwhile to superfund a 529 for your loved ones. By maximizing the rules in 2013, and then doing so again right after the ball drops in Times Square in 2014, some grandparents can earmark a cool $84,000 per grandchild for college savings in the coming weeks.

So, how does this work exactly?

Every year you can transfer $14,000 to anyone free of gift taxes through the annual gift tax exclusion. However, a special twist on this rule for 529 plans permits you to make five years of annual gift exclusion transfers in a single year. Accordingly, you could contribute $14,000 in the last days of 2013, then turn around in January and contribute another $70,000 (5 x $14,000).

Remember, 529 plans vary a bit from state to state. Some states are better than others. For example, Utah 529 plans allow for the increase of the gift to $140,000.00 should the parties making the gift file as married filing jointly on their Federal Form 709.  Regardless, this super-funding strategy is not just about college planning anymore. It is a powerful wealth transfer strategy at the same time. Think of it this way: you are moving great wealth to your loved ones while you can enjoy watching them make a life from it.

Even if this super-funding strategy is too late for you to implement in 2013, the idea remains. The question then becomes whether you want to give the inheritance now or leave it after you are gone? Perhaps the answer is a little of both.

In the right financial and family circumstances, a 529 plan will make perfect sense, super-funding or otherwise.

Reference: Reuters (December 16, 2013) “Should you super-fund your 529 college savings plan?”