Nearly everyone needs a will, also known as a last will and testament, to list all properties and assets and how they should be distributed postmortem. While the decisions are all yours, it’s helpful to know what personal possessions your children may or may not want to receive as part of their inheritance, as explained in the article “12 Things Your Kids Actually Might Want to Inherit” from Entrepreneur.
Making a list of things you want your children to inherit will save a lot of time, especially if you have a lot of possessions you want to give to them. You might think they want your collection of fine china and glassware, silverware and Grandma Helen’s sculptures. However, you might be wrong.
Wanting your children to have these items so they stay in the family isn’t wrong. However, it’s more than likely they’ll be donated after you die. If you want to make your children’s lives a little easier, here are twelve things they actually might want:
Cash money. Cash is the ideal asset, since it can be easily divided. Cash also provides an easy way to give your children a chance to invest in stocks or real estate or a means of starting a business.
Annuities. An inherited annuity has several advantages, including tax benefits, especially if they are non-qualified annuities paid for with after-tax dollars. By annuitizing an annuity, heirs may convert it into a steady and dependable income stream to help cover living expenses. They can choose to do this for a pre-defined period of time or for life, if the original annuity contract was created as a multi-life annuity.
Recipes. There are any number of ways to create a cookbook, from a simple bound folder to a hard-cover book likely to be shared and talked about, bringing warm memories to all.
Family Photos. Whether you take the time to organize them or not, videos and photos are your family’s history. Keep them in a water-proof bin and protect them for the future generations, until you’re ready to hand them over.
Trusts. Trusts are not just for wealthy people. Trusts are an all-purpose tool for passing assets across generations, controlling how they are used and minimizing estate tax liability. A trust is a legal entity to hold a variety of assets. A trust allows you to set down what you want done with the money, from paying for college to buying a first home. You name a trustee who is in charge of managing the trust and making sure your wishes are followed.
Furniture. Today’s young adult is more likely to want authentic furniture with family history than the latest knockdown furniture from Ikea. They also know how expensive good furniture is and may welcome saving money when furnishing their first home.
Vinyl Records. While collectors may value pristine records, the albums you listened to with scratches and skips will be prized by younger listeners. They evoke happy memories and hold sentimental value.
Life Insurance. If you want to leave money for your family but worry about the impact of taxes, life insurance is a good option. Your estate planning attorney will be able to explain who the beneficiary should be, or if you need to set up a trust to benefit your children.
Real Estate. Real estate is a strong investment with a track record of growth. Keeping a vacation home in the family for future generations requires extra planning. For many families, even a simple cabin by the lake is a touchstone of family history.
A Business. Family-owned businesses are often passed to the next generation. An established business has value up front and, if all is well with the business, provides income. A succession plan will be needed. Be realistic: if your children have never set foot in your office or expressed interest in the business, selling it may be a better move.
Investment Accounts. Stocks, bonds or other investment accounts can be gifted to children while you are living or after you die. Like cash, this asset is easily divided and relatively easy to give.
Education Funds. You can start a College Savings Account 529 for individual children when they are born or open one at any time to help with college expenses. Having financial help for college could be the difference between the burden of college loans or being able to explore different careers without the constant worry that a six-figure debt brings.
Contact us to speak with one of our estate planning attorneys and explore all of the different ways to transfer wealth to the next generation while you are living and after you pass.
Reference: Entrepreneur (Oct. 30, 2022) “12 Things Your Kids Actually Might Want to Inherit”
Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys