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5 of the Worst Assets to Inherit

1 17 168
16.09.2021

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Over the next 30 years, Americans will transfer trillions in wealth from one generation to the next. The median inheritance in 2019 was $92,700 for someone whose parents had a college degree and $76,200 for those with parents without a college degree, according to the Federal Reserve. This is money heirs can use to boost their retirement savings, cover college expenses and build their real estate holdings.

If you’re planning to leave an inheritance to others, you’re giving them a valuable financial leg up. But you do need to be careful about what you leave behind. Some assets can cause problems, such as arguments between family members, or may have hidden costs. While you think you’re leaving something that will help, you may actually be leaving behind a headache.

You can prevent issues from happening though with thoughtful estate planning. “A lot of people leave estate planning to the last minute, or they don’t get to it,” says Neil V. Carbone, trusts and estates partner at Farrell Fritz in New York. “For family harmony and efficiency, start your planning early with an attorney or other estate plan expert. They can get to know your assets and, in doing so, identify what might be an issue.”

Carbone finds that children and other young family members are more likely to respect a parent’s wishes if they hear them in-person, even if it’s something they don’t like, versus only hearing the news in a will, when they’re also grieving. At the same time, you can start reshuffling your assets around to those that are more effective to leave.

“In my experience, the best asset to leave behind: cash,” says Michael Romero, vice president and relationship manager at Argent Financial Group, a full-service wealth and trust management firm. He says brokerage accounts are good too because they’re so easy to value and divide. Everything else gets a little more complicated.

Here are five of the worst assets to inherit and what you can do to help manage them before you are gone.

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A timeshare is a long-term contract where you agree to rent out an annual trip to a resort or vacation property. These contracts last decades, sometimes for life, and are notoriously difficult to get out of. Even if you love your timeshare, think it’s a great deal and have had plenty of amazing memories, be very cautious about leaving it to the next generation.

“If you pass away and your kids inherit the timeshare, they’ll be on the hook for the ongoing – and ever-increasing – contract costs,” says Carbone. “Some sellers even encourage buyers to put their young family members on the deed when they sign up........

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