Business Succession PlanningEstate Planning

Estate Planning with Illiquid Assets

Estate Planning with Illiquid Assets
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 heirs 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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