There comes a point in life when you should consider your future and what you will leave behind. This is especially true if you have significant assets that you plan to distribute to your loved ones. Writing a will, creating an estate plan, and designating a power of attorney are all critical steps. But there’s one more thing you should consider: an equity transfer.
An equity transfer is simply transferring ownership of assets, such as property or stocks, to another person. There are many reasons why you might want to do this. For example, you may wish to transfer ownership to a child so that they can avoid paying inheritance tax.
Or, you may want to transfer ownership to a trust so that your assets are protected in the event of your death. Here are the benefits of an equity transfer that are often overlooked and why you should consider it when planning your estate:
Benefit #1: You can avoid probate.
Probate is the legal process of distributing a person’s assets after death. If you don’t have an equity transfer in place, your assets will go through probate. This can be a lengthy and costly process, especially if you have a large estate. By transferring ownership of your assets before you die, you can avoid probate altogether.
Of course, you’ll need help from a professional to do this. An experienced attorney from any trusted conveyancing solicitor service can help you set up an equity transfer so that your assets are transferred seamlessly and without hassle. This will also mean that your loved ones won’t have to go through the stress of probate after you’re gone.
Benefit #2: You can protect your assets from creditors.
If you’re worried about your assets being seized by creditors, an equity transfer can help. You can protect your assets from creditors by transferring ownership to a trust or another person. This is because the new owner will be responsible for paying off any debts.
Of course, there are some exceptions to this rule. For example, if you transfer ownership of your home to your spouse, they may still be liable for your mortgage. However, this is usually not the case with other assets, such as stocks or investments. That’s why an equity transfer is an excellent option to consider if you want to avoid creditors from seizing your assets.
Benefit #3: You can reduce your tax liability.
Depending on the type of asset you’re transferring, you may be able to reduce your tax liability. For example, if you transfer property ownership to your spouse, you may be eligible for a capital gains tax exemption. You can also transfer ownership of a business to your children.
This can help you avoid paying inheritance tax on the business. However, be aware that there are some restrictions on this. For example, the company must be small or family-owned. But if you qualify, this can be a great way to reduce your tax liability and pass on your business to the next generation.
Benefit #4: You can control what happens to your assets after you die.
If you don’t have an equity transfer in place, your assets will be distributed according to your will. But if you want to have more control over what happens to your assets after you die, an equity transfer is a good option since you can specify exactly who you want to receive your assets.
For example, you may want to transfer ownership of your home to your children so that they can live there after you’re gone. Or, you may wish to transfer ownership of a business to a trust so that it can continue to operate after you’re gone. Doing so gives you the peace of mind of knowing that your assets will be taken care of according to your wishes.
Benefit #5: You can ensure your assets go to the right people.
If you have young children, you may want to consider an equity transfer so that your assets go to the right people. For example, you can name your children as the beneficiaries if you have a life insurance policy. This way, if something happens to you, they will receive the money from the policy.
You can also use an equity transfer to set up a trust fund for your children, which they can access when they reach a certain age. This can help you ensure that your assets go to the people you want them to, and it can also help you provide for your children if something happens to you.
As you can see, there are many benefits to an equity transfer. An equity transfer should be considered if you’re looking for ways to protect your assets and save on taxes. Talk to an experienced estate planning attorney to learn more about how an equity transfer can benefit you and your family.
