When working on an Estate Plan, Six difficult assets require precise care when they are part of your holdings: Timeshares, Collectibles, Guns, a Business, Vacation, and Heirlooms. These assets may seem valuable or sentimental. However, they can become burdens rather than blessings. Here are six assets that may cause more trouble than they’re worth—and what you can do about it.
Do Kids Want the Timeshare?
You might love your vacation timeshare. However, it can become a major headache for your children. Timeshares often come with ongoing fees and difficult-to-obtain contracts. When your kids inherit your timeshare, they may be on the hook for rising costs they didn’t ask for.
To avoid this, Kiplinger advises asking your family whether they want the timeshare after you’re gone. Suppose they don’t, consider selling it now while you’re still around so it doesn’t become a financial burden to your heirs. We used to advise clients to transfer these to their revocable trusts, and now we suggest that they reverse them in many cases.
Are Your Collectibles Valuable?
Whether it’s a stamp collection or an antique piece of art, you might think your collectibles are treasures. However, they can be difficult assets for figuring out their actual value can be tricky for your heirs. Without an experienced eye, they may undervalue or even overlook essential items. Without your express instructions, they may be overlooked and even discarded.
If you own valuable collectibles, ensure that your heirs know where they are, what they’re worth, and whom to trust when it comes time to sell. Getting them appraised beforehand can save your family from confusion and arguments.
How to Handle Guns in Your Estate Plan
Guns present a unique challenge in estate planning. Different states have different rules about how firearms can be transferred after death. Sometimes, your heirs may only have a short window to handle the transfer before they get into legal trouble.
To make things easier for your family, consider talking with an estate planning attorney about the proper permits and legal steps your heirs must take. Creating a gun trust may be one option. You might also want to work with a licensed gun dealer to ensure a smooth transition.
Preparing a Business for Succession
Planning for what happens after you’re gone is essential if you own a business. Without a clear succession plan, your family could face financial struggles or legal disputes, especially if multiple heirs are involved. At death the owner will invariably take much valuable information, and preserving your knowledge is a key to easing the preservation of this difficult asset.
An excellent way to avoid these issues is to converse with an estate planning attorney about the best way to transition your business. Whether selling the company or passing it down to family, having a solid plan can keep your legacy intact. Coaching on preparing for the transfer of the business is essential, and as a bonus, it can often become more valuable for you.
Will Your Vacation Property Cause Family Fights?
A vacation property sounds like a dream come true—until siblings start fighting over who gets to use it. Disputes over maintenance, costs, and how often each person can visit can cause significant family rifts.
To prevent these conflicts, talk to your heirs now. Find out if they want the property and whether they’re willing to share the responsibilities. You can also leave instructions in your estate plan about handling the expenses or suggest selling the property if it’s too much for them to manage.
Is Physical Property Worth the Trouble?
Physical items like jewelry or family heirlooms might hold sentimental value but can cause disagreements among heirs. Who gets what? How do you fairly divide items that can’t be split evenly? These are questions that can lead to heated arguments.
One way to ease this burden is by giving away items while you’re still alive so you can see your family enjoy them. If you’re not ready to part with them, clearly outlining who gets what in your will can help reduce future disputes.
Plan Your Estate with Care
Not every asset is worth passing on to the next generation. Some can lead to more stress and financial strain than they’re worth. By carefully considering what to include in your estate plan—and what to leave out—you can help your family avoid unnecessary conflict and heartache.
If you’re unsure how to handle certain assets in your estate plan, now is the perfect time to talk to an estate planning attorney. They can help you create a plan that protects your loved ones and ensures that your legacy is a blessing, not a burden.
Contact our estate planning office today to request a consultation and learn how to create an estate plan that works for your family.
Key Takeaways
- Prevent financial burden: Leaving problematic assets, like timeshares or vacation properties, can cause unnecessary expenses for your heirs.
- Minimize family conflict: Careful planning of physical items and valuable collectibles helps reduce disputes among loved ones.
- Ensure legal compliance: Transferring assets, like guns and businesses, requires attention to legal requirements to protect your heirs.
- Avoid stress for your heirs: Streamlining your estate plan with easily managed assets, like cash, can save your family from future headaches.
- Start discussions early: Talking to your heirs now can clarify what they want and help you to adjust your plan for their benefit.
Reference: Kiplinger (Aug. 16, 2024) “Six of the Worst Assets to Inherit“
