I know I'm going to get a few calls about this one, but hear me out. We talk a lot about managing your estate and strategies for making the most of an inheritance, but what we don't often talk about is what to do with your “stuff” and the realities that surround that.
When helping people with their estate planning, we obviously cover the big issues, such as IRA or retirement plan beneficiary info, wills, trusts, power of attorney and advance directives (or POLST). We review titling of the assets in your estate with your CPA or attorney. But what we often don't talk about is what to do with all of your stuff.
The reality is that what you want to happen with your stuff is often not what your heirs want to do with it.
What about your family home?
Let's start with the big one, your house. This is the one people balk at the most, but here goes. Your kids don't want your house. I know you think they do, but they really don't. In most cases, even when they do, it would be impractical for them to buy it anyway.
How are three kids going to "share" my house? There's no way that's going to work, even though the idea of them sharing a shore house sounds nice. The reality is that they likely can't share it, and forcing them to do so will almost certainly lead to hard feelings. Somebody is going to get more use of it than the others, and that's where the problems start.
If one of them wants to buy out the others, that's fine — but what are the terms in which they can buy it? Do they get a "discount" because they are family? Doesn't that hurt the others’ value for the same reason?
Sponsored Content
What about your beach/vacation house?
Sometimes I hear that "I want them to have a place to go to in the summer." I had a situation not long ago where a client really wanted a grandchild to have the beach house. Carrying the house was actually causing financial issues for her, but she didn't want to give it up so she could pass it on. The heir lived out of state, but she really wanted them to have it. I asked if she ever discussed those wishes with her heir, and she had not, but then again, who doesn't want a house at the shore? Turns out quite a few people don't.
Finally, I suggested we call the heir and have that conversation. The heir, as I suspected, loved the idea of a house at the Jersey Shore but didn't really want it because they simply wouldn't have time to ever visit it and the long-distance upkeep, maintenance, etc. would be added stress for them.
With this new information, my client decided to let the house go, live a far more comfortable retirement and leave to her heir what they really wanted, cash.
I see this scenario time and again. Yes, your home holds a lot of sentimental value to you and your heirs, but the reality of them keeping it rarely ever works out.
Sponsored Content
What about your treasured collections?
Now for the smaller stuff. While your collection of Hummels, model trains, baseball cards, (insert collectible here) is your hobby and passion, rarely does that continue to your heirs. If they don't share your passion for those collectibles, they may be likely to sell them for less than their full value when they inherit them because they don't fully understand their true value as a collectible.
Sponsored Content
What about your china service for 24?
Lastly, your beautiful china. Understand that there are only so many sets of china that your kids or grandchildren can use. The effect of passing them on for generations has created a glut of china for younger people. Add to this the fact that younger generations simply don't use china at all compared to older generations, let alone using four to five sets of it.
If the goal is to make your estate transfer as easy as possible and with as few problems or family scuffles as possible, then addressing some of these issues now may well help to solve these problems.
Sponsored Content
The bottom line, and some practical tips
If you aren't sure how your heirs feel about inheriting your "stuff," then the easiest course of action is simply to ask them. I think you'll be surprised with the answer. Then get busy:
- Start selling. Sell items that you don’t need anymore that might have some value. EBay and Etsy are great places to start, or heck, have a garage sale.
- Donate things others could use. Goodwill and Salvation Army could do some good with your generosity, and the work you do to gather your donations and get them where they need to go is just like volunteering, which always feels good.
- Make it fun. Going through your things bit by bit can be a shared activity with your spouse or loved ones. Think about all the conversations and memories you’ll share along the way as you declutter.
- Enjoy the results. Your house will feel bigger and the weight on your shoulders will feel lighter. Your kids will thank you, too.
If you have unique family circumstances that make these topics a little more challenging, just give me a call to discuss and maybe we can help come to a solution for you.
Disclaimer
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
Sponsored Content
-
An End-of-Year Investing ChecklistDecember is a great time to get your portfolios in order. Investors can follow this checklist to assess what changes they may or may not need to make.
-
Year-End RMDs: Should You Invest, Spend or Donate Them?Here are 10 ways to use year-end RMDs strategically. The deadline for taking Required Minimum Distributions is December 31. And yes, shopping might be in order.
-
Three 'Yellowstone' Estate Planning LessonsWe can learn a lot from John Dutton's estate planning mistakes. Here are just a few that relate to families in general and family businesses in particular.
-
Claim It Early or Delay? When to Start Taking Social SecurityTiming is everything when it comes to starting Social Security. Here are the top reasons why people choose to delay or take it early, according to one expert.
-
One Simple Tip for Planning the Three Stages of RetirementDreading the idea of retirement? This planning technique for the 'go-go, slow-go and no-go years' can lessen the worry and help you save efficiently.
-
Digital Asset ETFs: A Less Risky Way to Invest in Crypto?There's a growing appetite for new ETFs that make it easier to invest in cryptocurrency, including bitcoin. But investors should still proceed with caution.
-
Do You Feel Like Somebody’s Watching You? It's Your CarWhat's worse, you gave your vehicle manufacturer permission to watch you — no matter what you're doing. What are the car companies doing with that information?
-
Three Possible Tax Impacts for Retirees Under TrumpHow might a second Trump term affect your tax bill in retirement — or the inheritance tax bill for your heirs? This pro has three predictions.
-
What to Know About Leverage and Bitcoin's Meteoric RiseLeverage in the financial world can lead to astonishing success or a crushing collapse. How are investors using leverage to invest in bitcoin?
-
How Do You Know When It's Time to Change Financial Advisers?Sometimes a breakup is for the best. Here's how to handle 'the talk' and make the switch to a new professional who's a better fit for you.
