Your assets, or resources you own, include your property or tangible goods as well as money. You won’t need assets when you die, but you can control what happens to them after you are gone. Planning ahead is “estate planning.” Under state law, your assets go to your heirs unless you make other plans in writing. You can designate the distribution of your assets by will or trust, or distribute assets while you are alive.
Your will allows you to direct how you want assets distributed upon your death. You can name heirs you want to receive your money or property, and detail items you want each heir to receive. You can also distribute your assets to beneficiaries through a will. Beneficiaries don't have to be relatives; they can be unrelated individuals to whom you choose to gift some of your items. Your will does not go into effect until you die, so you retain the ownership of all of your assets until death.
You can distribute assets through a trust with a legal transfer of your assets to the trust while you're alive. You create an inter vivos, or “living,” trust to give your assets to another person. You can create a testamentary trust with a will and transfer assets only upon your death. Use of a testamentary trust is ideal for minor children or an incapacitated person, because it allows a trustee to distribute your estate to the heir or beneficiary on an “as needed” basis after your death.
Distributing your assets while you’re alive allows your heirs to enjoy the assets early. You can give $13,000 in assets to an heir or a beneficiary every year you are alive and not have to file a gift tax return. Your spouse can also give $13,000 to the same person without filing a gift tax return. You and your spouse can give to the spouse of the heir or beneficiary another $13,000 each annually, for a total of $52,000 a year. If the person receiving the gift lives in a community property state -- one that considers assets received during marriage as belonging half to each spouse -- you effectively give the assets to the heir or beneficiary and spouse together.
State succession laws give your estate to your heirs in an order established by the state. Your spouse usually inherits your estate, and all assets go to your children when your spouse dies. Louisiana law allows the spouse to retain the rights to the estate, called the usufruct, but the children are legal owners of the half of the community property belonging to the deceased person. The living spouse’s rights to this half of the property terminate upon remarriage or death. In most states, your parents inherit your estate only if you have no offspring, often called lineal descendants, or spouse. If you have no lineal descendants and your parents are deceased, your assets go to your parents’ descendants, according to succession laws in many states.
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