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Estate planning when your wealth stems from complex assets

On Behalf of | Dec 17, 2020 | Estate Planning |

It is all too easy for people with significant and diverse assets to underestimate the value of their resources and the amount of planning necessary to preserve them for the next generation. Wealth preservation planning is complex, especially if you have an appropriately diversified portfolio of investments and assets.

The more varied forms your resources take, the more planning becomes necessary to pass those resources on to others in the future. Each kind of resource may require separate consideration in your estate plan.

How you use real estate will inform how you hold it and pass it on

Did you invest in large parcels of unimproved land because you know that the property will eventually have a greater value than it does now? Do you own multiple commercial or residential properties that generate income as rental units? Do you have a ranch or farm that you want to keep in the family and pass on to the next generation?

For real estate investments, you might want to transfer ownership to a trust. That way, there is a seamless transfer of authority that won’t put those properties at risk for default or tax issues when you die.

If you have a home where dependent loved ones still live, you might arrange to have your share of the property transferred to them when you die. If you have multiple different kinds of property, you may need a combination of different tactics to address each property appropriately in your estate plan.

Investments and other accounts can go through a trust or to a person

You will have the option of setting a transfer on death designation for all major accounts, including investment accounts. If you want your spouse or child to inherit the full value of the account, you can have the balance transfer directly to that person on your death, theoretically bypassing the probate process. You could order your executor to liquidate such accounts and split them among your heirs.

Alternately, you could transfer those accounts into a trust either now or at the time of your death to allow multiple people to draw benefit from those accounts. A trust can also allow you to designate a final home for resources not used by trust beneficiaries during their lifetimes.

Businesses often require special planning

Passing the business down to your children or loved ones will require not just estate planning but also succession planning so that there is someone competent to fill your role. Everything from the nature of the business to its legal form will influence the right approach in your case.

The more varied and valuable your property is, the more important it is to get experienced help with estate planning to maximize the protections for your legacy and minimize the risks and complications for your beneficiaries and your executor.