Throughout your life, you have most likely accumulated many different types of assets. When planning your estate, it is useful to know which of those assets you should leave to your family members.
Estate planning is not just about deciding how much you want to give your heirs. It is also about how you want to give it to them. Specifically, you might need to decide whether a particular asset should be passed along “as is” or whether it would be better to dispose of a certain asset now and reposition its value for maximum benefit to your estate (and your heirs). While every situation is unique, there are some general considerations to keep in mind as Investopedia recently discussed in “Estate Planning: Which Assets Are Best to Leave Your Family.” The three most important considerations are:
- Liquidity – Generally speaking, the more liquid your assets are, the better they are for heirs to inherit. Liquid assets can be easily converted and used by heirs, and the assets do not take up physical space.
- Sentiment – Assets that might have sentimental value to your heirs should be handled carefully. If more than one person may want them after you pass away, it is often best to discuss how the assets will be handled with those people because later surprises could lead to acrimony.
- Taxes – It is important to plan how different assets will be taxed after you pass away. You will need to account for both the capital gains tax and the estate tax; thus, it is best to seek the advice of a professional about how to handle taxable assets.
If this sounds like a lot to consider, meet with an experienced estate planning attorney. He or she will help you create the right plan for your situation.
Reference: Investopedia (June 27, 2016) “Estate Planning: Which Assets Are Best to Leave Your Family”
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