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Beyond the Bank Account: A Guide to Gifting Your Legacy
It’s a surprising truth that many people, despite building a life rich with meaning, often put off or even completely neglect creating an estate plan. If you’ve worked hard and want to ensure your loved ones are cared for after you’re gone, deciding what happens to your assets is a crucial step.
Without a clear plan, families can face unnecessary confusion, conflict, and missed opportunities. Crafting an estate plan isn’t just a practical necessity; it’s a lasting act of care that safeguards your family and honors your wishes.
Ready to secure your legacy? Here’s a look at some of the most valuable gifts you can leave your children in your will.
1. Cash
When it comes to inheritance, cash reigns supreme. Its value is clear, making it simple to divide equally among your children. Unlike physical assets that might take time to sell, cash provides immediate benefit to your heirs.
2. Roth IRA
A Roth IRA, funded with after-tax dollars, offers a significant advantage: your heirs receive the funds tax-free. They can even let the money continue to grow tax-free for up to ten years before it must be fully distributed.
3. Real Estate
While dividing real estate can be complex, it can be an excellent long-term investment to pass on, especially if it generates rental income. Rental properties can provide a steady stream of passive income, benefiting your children for years to come.
4. Annuities
Not all annuities include a death benefit, but those that do can be a valuable inheritance. Structured correctly, an annuity can ensure your children receive a monetary sum upon your passing, potentially offering tax benefits that save them money in the long run.
5. Brokerage Accounts
Investments held in brokerage accounts, such as stocks, bonds, and mutual funds, are highly appealing items to include in an inheritance. They are easily transferable and divisible, with their value readily determined by current market rates. Your heirs can choose to let these investments continue to grow or cash them out.
6. Sentimental Items
Not every valuable inheritance has a price tag. Sentimental items like photographs, letters, and scrapbooks are often irreplaceable. Consider digitizing these precious memories to share them with multiple children and preserve them for future generations.
7. Art and Antiques
Collectibles such as art and antiques can be sound long-term investments, often holding their value well and being less susceptible to market fluctuations than stocks. Remember to have these items professionally appraised and properly insured.
8. Tools
Practical and long-lasting, high-quality tools can be incredibly useful for children as they maintain their own homes. While basic items might not be necessary, larger tools like a table saw can be a worthwhile addition to your will.
9. Recipes
Family recipes are a delicious way to preserve traditions and keep your memory alive. Often at the heart of family gatherings, including them in your will ensures these culinary legacies continue for decades.
10. Furniture
Depending on their age and living situation, your children may appreciate inheriting furniture. Couches, accent pieces, or even sentimental items like a grandparent’s rocking chair can enhance their homes and hold cherished memories.
11. Businesses
While often passed down during retirement, a profitable, well-managed business can be a significant inheritance. Beyond its monetary value, it can provide a steady income stream and benefit your family for generations.
12. Life Insurance
For parents aiming to provide their children with a substantial financial foundation, life insurance is an excellent option. Payouts are generally not considered taxable income and, if beneficiaries are named, bypass probate, going directly to your children to help them build wealth quickly.
The Bottom Line
A thoughtfully constructed estate plan can alleviate financial stress for both you and your heirs. While contemplating the end of life may seem somber, taking these steps provides the peace of mind that your loved ones will be well-cared for. Consider discussing your will and estate plan with your children beforehand to prevent any confusion or disputes over your decisions.