The Worst Inheritance Assets to Leave Behind
By: Barry E. Haimo, Esq.
January 13, 2022
Perhaps you’ve already begun estate planning and are thoughtfully considering how you want your assets distributed after you’re gone. Or maybe you are one of the many Americans who recently received an inheritance. While an inheritance can be incredibly beneficial, there are some inheritance assets that can be more trouble than they’re worth.
These particular assets, despite the best intentions, can come with hidden costs or cause familial strife. But with the help of a seasoned estate planning attorney, you can save yourself and your loved ones the headache that comes with these troublesome assets.
The Value of Inheritance
For some beneficiaries, receiving inheritance assets can completely change their quality of life for the better. Cash and brokerage accounts will always have value, including stocks, bonds and mutual funds.
Discussing your estate with your loved ones while you are still alive can help make the entire process go more smoothly. Including a plan if there is conflict can also make the process go more smoothly. Dividing assets and discovering who got what (or didn’t!) after the fact can cause undue conflict and resentment in a family dynamic. But the worst is when you leave behind assets to your family that put financial stress on them in addition to emotional stress. To put it plainly, some assets may not be worth leaving to your loved ones.
The Worst Inheritance Assets
The following assets, while seemingly valuable, are often guilty of red tape, liabilities, upkeep, and unseen costs for your beneficiaries.
In theory, collectibles seem like an excellent inheritance asset. They have value, can be sold, and have a higher capital gains tax rate. But they can be problematic too. Depending on the items, they can be large and cumbersome to manage or store.
And most importantly, their value can sometimes be hard to assess. While some items hold their worth, others become basically worthless – no matter how much they were going for at one point.
Remember Beanie Babies? Those tiny bean-filled stuffed animals might have been worth hundreds – or even thousands – of dollars at the height of their popularity, but they certainly won’t be paying for anyone’s future college tuition now.
Vacation Homes & Timeshares
Vacation homes may seem like the perfect inheritance asset: they can be used by the whole family and enjoyed for generations. But it’s never that simple with real estate property. There can be family conflict about how time is divided at the property. Or how money is divided if it is rented or sold. Not to mention the cost of maintenance, taxes, insurance, and any remaining mortgage.
Timeshares present similar challenges. They are owned only in-part, so it’s imperative to determine if your family members want to commit to the timeshare contract after your death. If so, they can still be subject to rising costs and possible legal action if they try to break the contract.
Similar to collectibles, family heirlooms are another inheritance asset that can vary wildly in value. Perhaps Grandma’s china was always spoken of with reverence around family dinners as a cherished antique – and one worth a pretty penny. But the truth is, many heirlooms have depreciated in value in the last few decades. And fewer and fewer people are interested in purchasing antiques.
But while those dishes might not have the value you’d hoped for, they may still be a desired family item for sentimental reasons. Unfortunately, that can have its own host of problems. Such as family members feuding over certain assets, like an antique engagement ring or a favorite set of silver. If you do plan to include heirlooms in your estate assets, having a transparent discussion with family can help establish expectations early on.
Are you ready to organize your inheritance assets? Call Haimo Law today to get started on a well-executed estate plan that can give you and your family peace of mind.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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