Leaving assets to your children has long been considered a thoughtful gift but it can become a burden for recipients. AARP recently published an informative article that may have you rethinking your estate plans especially when it comes to the four assets they highlight.
(From AARP) Leaving your children an inheritance is a blessing, but it can also be a curse, particularly if the items you’re handing down require work, time, money or space. Consider complicated assets like an antique car or a digital wallet full of cryptocurrency. Sure, your kids will appreciate these assets, but if the possession you’re giving away is too complicated to comprehend or hard to value, it could cause stress.
“When it’s an asset people don’t understand, it’s very difficult,” says Jean-Luc Bourdon, founder and wealth adviser at Lucent Wealth Planning. He once had a client who inherited a unique car but didn’t know what to sell it for or whom to trust. Instead of unlocking the value, she held on to the vehicle.
Even IRAs and 401(k)s can be problematic, since they aren’t easy to transfer to the next generation or your children hold on to them for sentimental value. The same goes for expensive furniture, ceramics and collectibles that take up space or are hard to get rid of.
“The most common assets [kids don’t want] have some type of obligation attached to them to maintain value,” says Joseph McNair, a certified financial planner at WA Asset Management. “The closer to cash the assets are, the less cumbersome they are.”
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