Considerable common sense prevails across an article recently written by a commentator on estate planning for families.
Here’s a central bottom line directed toward a planner or planning couple that is communicated in that piece: Make it easy on your loved ones.
That might sound like exceedingly simple — even painfully obvious — advice to proffer, of course, but it can be easier said than done.
Here’s one reason why: Over decades, most families tend to accumulate a lot of stuff. It is hardly a rarity for a home to be clogged with heirlooms and artifacts collected over a lifetime.
What is to be done with all those things, especially when their value is often an integrated mixture of cash equivalency and emotional attachment?
A bit of fundamental advice to planners provided by the above writer regarding how families might optimally approach estate administration matters is this: Consider things from a three-fold perspective based upon liquidity, sentiment and tax consideration.
When possible, get rid of the aforementioned stuff and replace it with cash that can be far more easily passed along to heirs. A liquid asset is often preferable to a so-called “hard asset” because the latter might have to be sold “for a discounted price in order to raise the cash needed to pay the estate tax.”
Of course, there’s that referenced sentimentality; not everything is about selling artifacts for cash. Where a thing like a family home or treasured heirloom is considered, a timely family discussion — with studied input from a proven estate planning attorney — can go far toward reducing conflict and complications.
And, as noted, tax implications relating to estate administration must always be considered. Those can be simple matters in a given case, of course, but they can also be fraught with complexity for some families.
At its core, estate administration rewards the proactive and foresighted.
“Work with an estate-planning attorney to put together a document that clearly spells out how your assets will be distributed,” says the aforementioned writer.