Some of the most difficult conversations you might have with your family are about the future. This certainly applies to estate planning. Here are some difficult conversations every millennial should have with their family and their estate planner.
If your parents, grandparents, or great grandparents are in the position to pass down a property or house without a mortgage, your beneficiaries still might not be able to afford the property.
Tax Liabilities: it's important to establish with your estate planner that any properties you might pass down or receive from an inheritance are free of tax liens. Additionally, calculating potential taxes associated with the property can also be helpful. For instance, you're passing down a parcel of land with a substantial annual tax burden, you may want to create annuity to help defray the tax liabilities your beneficiaries might assume by taking ownership of the property deeded by you.
Creating a Trust
Because it's not always possible or easy to divide large assets like houses, cars, boats, or other valuable possessions, you may want to consider creating a trust to prevent creating messy entanglements.
Annuities: you can often avoid some costly inheritance taxes be deeding any annuities through a trust. Whether the trust is managed by a third-party or jointly managed by beneficiaries of the trust, creating a trust will making the inheritance process more manageable. For instance, if you're deeding a home to several beneficiaries, you can put the home into the trust while it is being sold. Once the home is sold, the proceeds can be neatly divided and distributed to your beneficiaries to make sure your inheritance wishes are honored.
It's never easy to discuss how personal possession will be dealt with after you're gone. Although the conversation might be awkward, you should make sure that your family has a clear idea about what will be done with your personal possessions.
Estate Sales: an easy way to monetize and divide personal possessions is through estate sales. You can authorize these estate sales through your will and deed the proceeds appropriately through a trust or third-party estate sale provider.
Line item bequeathments: if you'd like specific items to go to specific beneficiaries, your estate planner can create line item bequeathments. These line item arrangements can be multi-layered. For instance, if you'd like a family heirloom to be passed from one generation to the next, you can stipulate that via your line item bequeathments.
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