No matter what your finances look like now, you’ll leave an estate behind when you die. Regardless of its size and worth, your loved ones may receive portions of that estate. And if you already have a will, a trust, or other estate planning completed, you’re already ahead in the game. But even then, some assets can still make life more difficult for your heirs. How can you avoid saddling them with unneeded burdens? Keep reading to understand the ins and outs of difficult assets – plus tips on what to do with them.
A White Elephant Inheritance
Maybe you’ve heard people speak of a “white elephant gift.” Legend has it that the expression came from an unusual practice by some Southeast Asian monarchs. Supposedly, the kings of Thailand loved to give rare albino elephants as gifts to those they disliked. Since white elephants were considered sacred in their culture, they could not be regifted or used for labor. Recipients of these elephants paid for the animals’ expensive upkeep yet saw no benefits in return.
Just as white elephants were deemed valuable but useless in practical terms, some assets you leave behind can also saddle your heirs with problems. In a September 2021 Kiplinger piece, financial expert David Rodeck lists five types of these assets:
- Timeshares
- Valuable collectibles
- Firearms
- Vacation properties
- Jewelry, antiques, and other valuables
If you plan to leave stuff like this to family members you hate, that’s one thing. Or you may not be seen as wise. Think of Wayne Campbell receiving a gun rack from his ex-girlfriend Stacy in the first “Wayne World” film. But if you want to lessen the hassles of managing your estate, you should probably think twice before bequeathing them to anyone in your will.
Why Some Types of Assets Pose Problems
Timeshares, firearms, and similar kinds of assets can come with legal and financial obligations – the type that can become albatrosses around your heirs’ necks. Timeshares are particularly tricky because they feature lengthy “right to use” contracts, as NerdWallet’s Liz Weston explains. With most containing “in perpetuity” clauses, their owners are stuck paying associated expenses for life. These include maintenance fees plus the costs of repairs and damages.
Rodeck mentions how firearms, jewelry, collectibles, and vacation properties can be problematic in an estate. Firearm laws govern possession, transport, registration, and permits, which may be difficult to navigate and even put your heirs in legal jeopardy. Vacation properties come with taxes plus maintenance, mortgage, and insurance costs that can exceed their value. Collectibles are difficult to put a price tag on and may not be worth what you’d hoped. The same goes for jewelry, antiques, and the like. And if there’s bad blood between your family members, they could feud over the objects after you die.
What To Do With “White Elephant” Assets
The primary goal of estate planning is to pass on wealth with as little hassle and expense as possible. Once you know their desires, you should arrange to easily value, transport, store, and handle these assets. For firearms, you may need to work with a gun dealer or set up a gun trust. You may consider selling other physical assets beforehand and including the cash proceeds in your estate. For property, work with professionals you trust to hash out the appropriate contracts for your heirs.
As you age, you may find out a hard truth: Your family members may not want items you treasure. That’s why communication is critical. You should first find out if your heirs actually want your jewelry, timeshare, or vintage guns. Only then can you act in their best interests. After all, the goal is to leave behind beneficial assets plus good memories – not white elephants.
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