If you’re like most of us, you hope to bless your children with a sizable inheritance. But some asset types require maintenance, an influx of cash, or a lot of space to store. If the asset you’re bequeathing is too complicated to handle or to sell, it might not be an ideal gift. A vintage piano, an antique car, or digital assets such as cryptocurrency might increase the stress of distributing your estate. A good rule of thumb is: The closer to cash the assets are, the easier they are to manage and distribute to your beneficiaries.
Top Four Assets Which May Be Difficult to Inherit
- Vacation homes, undeveloped land, and other types of real estate: Real estate property can be a desirable inheritance because it may continue to grow in value, but it can also bring a litany of headaches if it requires maintenance and improvements. Taxes, utilities, and upkeep duties can be a burden and if it is a property which is difficult to sell, that creates an additional challenge which can cause financial strain.
- Timeshares: They can be a blessing and a curse. While they allow you to vacation in dream destinations, they have ongoing costs such as annual fees, taxes, and utilities. They can also have a lot of restrictions of which you may not be aware. Timeshares can be notoriously hard to sell so you may not wish to saddle your inheritors with this duty.
- The Family Business: You may have spent a lifetime building the success of your business and feel that it is your hardest-won asset. The risk in passing it to children who don’t want it or aren’t qualified to run it is that it can decline in value rapidly. Ideally, you should make a succession plan during life by selecting the right person to take over or plan for a sale.
- Storage Units: Unless the unit is chock full of cash and gold, it will be a quite a chore to empty a storage unit and could result in unnecessary ongoing monthly payments.
Talk to your children or your inheritors to discover which assets they’d like to take on and which ones might be more of an imposition than a benefit. A qualified estate planning attorney can help you craft the best strategy for these types of disbursements.