Do you have assets you are planning to leave to someone? Do you know how the receipt of assets or money can impact the recipient? A significant amount of dollars are poised to transfer between generations, and strategic estate planning becomes paramount. In today’s video, I’m going to describe the importance of thoughtful planning and also identify potential pitfalls when leaving certain assets behind.
- First, let’s review the importance of Estate Planning:
- The total value of an inheritance is not just a dollar figure; the nature of assets in an estate matters significantly.
- Trillions of dollars will transfer to the next generation, but not all inheritances are perceived as helpful; some can be problematic.
- Start estate planning early with an attorney to identify potential issues and ensure family harmony.
- Personal communication of wishes is crucial for family understanding and acceptance.
- So what are some of the Best Assets to Inherit?
- Cash is considered the best asset to leave behind.
- Brokerage accounts are valuable for their easy valuation and division.
- What are some of the Worst Assets to Inherit?
- Timeshares: These are long-term contracts with potential ongoing costs.
- Potentially valuable collectibles: The are risks of loss and valuation difficulties.Guns: There are complex regulations and proper permits needed for inheritance, and some may be opposed to ownership.Operating businesses: Family may not want the responsibility of taking over a company. Succession planning is essential; consider selling the business and dispersing proceeds from the sale if the family isn’t interested.Vacation properties: There is the potential for family conflicts over usage, and some may not want to take on the expenses of ownership.
- Any physical property with sentimental value: This can bring about emotional conflicts and difficulty in valuation.
- So let’s talk about tips for Avoiding Issues:
- Communicate openly about the inheritance, and discuss preferences with heirs.
- Plan for the sale of assets while alive to avoid conflicts.Consider appraisals for non-cash assets to determine fair value.
- Leave a letter of wishes to guide beneficiaries and reduce conflicts.
- What to Do if You Inherit Something Unwanted:
- Consider disclaiming the inheritance if unwanted.
- Comprehensive wills should empower executors to abandon property if necessary.
- Selling unwanted items in bulk, even at a reduced value, may be preferable to the hassle of individual sales.
Strategic estate planning goes beyond monetary considerations; it involves a careful selection of assets to ensure the seamless transfer of wealth. By addressing potential issues related to timeshares and collectibles, individuals can pave the way for a harmonious and efficient inheritance process. Initiate your planning early, consult with estate attorneys to understand the implications of each type of inheritance, and make informed decisions to safeguard your legacy. Thoughtful planning can ensure a smooth transfer of assets and minimize potential conflicts among heirs.
6 of the Worst Assets to Inherit | Kiplinger
