Estate Planning with Illiquid Assets

Estate Planning With Illiquid Assets | The Pollock Firm

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One of the trickiest items that we must deal with as estate planners is to help clients transfer illiquid assets. Illiquid assets can include:

  • retirement plans
  • ownership in a family business
  • real estate
  • collectibles (such as artwork, baseball cards and comic books)
  • expensive vehicles
  • and even animals (such as thoroughbreds and show pets)

Illiquid assets are tricky to plan with because they almost always have huge built-in gains, sometimes multiple people want the same asset, the asset must often be sold to pay for taxes and they usually require special maintenance or care.  A client can face additional complications when most of a client’s wealth is tied up in a single asset and the client wants to benefit multiple heirs.

Each family requires a custom solution, but often the solution can be found in tried an true estate planning techniques, such as:

  • a life insurance trust (so that you can give the illiquid asset to one heir and cash to another heir)
  • a buy-sell agreement (for a family business)
  • a pet trust (to deal with a beloved family pet)
  • promissory notes
  • and even charitable trusts

 While we can not help you decide which of your heirs should receive your assets, a good estate planning attorney can help you make sure that they pass in a practical and tax efficient manner.

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