Some Advice To Clients On Handing Down An Estate

Making plans to dispose of an estate that was built up over a lifetime is a daunting task for client and adviser both. Here are some ideas that can be brought up with a client to help them gain peace of mind with a well planned estate:

• For clients with a high net worth, particularly those with highly appreciated assets, a charitable remainder trust might be appropriate. It will guarantee a lifetime revenue stream and offer great tax rewards to boot.
• Use a fully funded life insurance trust to ensure a family business being passed down to the next generation will have the capital to cover estate tax expenses. This will protect the family from the possibility of having to make a bad long term move due to immediate concerns.
• Set conditions on how the inheritance will be spent in order to protect beneficiaries from themselves. You never know for sure how a person reacts after coming into money; even a minimal condition may keep someone from running through the inheritance.
• Use a reliable third party as trustee, particularly when many discretionary distribution will need to be made. This avoids infighting when one member of the family denies the request of another and will help keep the peace.
• Always make sure the right names are used on a document. Failing to update a beneficiaries list or misidentifying a person may lead to burdensome consequences for loved ones.

See Karen Haywood Queen, 5 Tips For Handing Down Your Wealth, Forbes, June 5, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.