“Mom always liked you best” was Tommy Smothers’ signature line on the old Smothers Brothers Comedy Hour. But it’s not funny when ill feelings arise in real life over the distribution and settlement of a loved one’s estate. Here are some ways to save your family from the pain of conflicts over your estate and pass your wealth to them as smoothly, tax efficiently and quickly as possible.
Make Lifetime Gifts
Making gifts during your lifetime can help ensure your property goes to the person or charitable organization you want. It also gives you an opportunity to see the individual recipients enjoying that cash or property and to mentor them in managing it. If you make a significant gift to charity, you could use life insurance benefits to replace the value of that donation in your estate. This might avoid hard feelings among family members, as well as alleviate concerns you have about leaving sufficient assets to them.
Life insurance can also be used to equalize inheritances and avoid family conflict in other ways. Let’s say you plan to leave an asset that makes up a large portion of your estate, such as your home or business, to one of your two children. To even things out, simply name your other child as the primary beneficiary of a life insurance policy equal to the value of the asset passing to the first child.
Remember that life insurance proceeds are generally payable relatively quickly and income-tax free, which can provide much needed cash to settle the estate’s bills.
Address Personal Property Separately
Personal property can be a source of family conflict. Talk with your estate planning attorney about how you can leave instructions and make specific bequests in your will as to who should inherit your cherished personal items.
Schedule Regular Reviews
Because situations change, you’ll want to meet with your financial professional and estate planning attorney periodically to make sure your estate provisions and life insurance coverage are still appropriate for pursuing your goals.
Financial Advisor offers Investment Advisory Services through Eide Bailly Advisors LLC, a Registered Investment Advisor. Securities offered through United Planners Financial Services, Member of FINRA and SIPC. Eide Bailly Financial Services, LLC is the holding company for Eide Bailly Advisors, LLC. Eide Bailly Financial Services and its subsidiaries are not affiliated with United Planners.
Copyrighted property of Newkirk Products, Inc. Symmetry has been granted permission to reproduce a portion of this publication through our license agreement with Newkirk. Symmetry Partners, LLC does not provide tax or legal advice and nothing either stated or implied here should be inferred as providing such advice. The information is provided for educational purposes only.