Creating an estate plan to reflect your vision for the future and your care for loved ones is perhaps the best legacy of all. A recent article from Kiplinger suggests six great assets to inherit and provides practical ways to make life easier for your heirs.
Start by consolidating accounts and simplifying what you can. If you have more than one checking or savings account or multiple credit cards, consider consolidating them into one of each.
If you own complicated properties, such as rental properties in multiple states or illiquid assets, and don’t simplify these assets while you are still living, your executor and heirs may find themselves devoting countless hours and expenses to corralling assets and figuring out how to distribute them.
Cash is the best asset to inherit. Heirs will know how much it’s worth and can easily divide it according to the terms in your will. They also won’t have to do much to access it, as compared to real estate, which can take months to sell and require upkeep until it’s sold. If you have cash across multiple banks, make life easier by consolidating it into a single bank. Just be sure to stay within FDIC, NCUA, and SPIC limits, keeping up to $250,000 in individual deposit accounts to protect your money.
A few accounts are almost as effective as cash inheritances. Life insurance on yourself is a great asset. When you die, the life insurance company pays your beneficiaries the death benefit in cash. This bypasses probate, so heirs don’t need to wait for your will to be approved by the court before receiving their inheritance. They will need to present a death certificate to the insurer and fill out a form. Payments are income tax-free for heirs, although the death benefit does get added to the estate’s value.
Be sure to check beneficiary designations on every account you own. It’s not uncommon for an ex-spouse to remain listed on accounts, and there’s no legal obligation to share assets.
In brokerage or investment accounts, market prices are known, and holdings can be easily divided and converted to cash. There are also tax benefits to inheriting investments. If someone bought IBM stock 20 years ago at a cost basis of about $28 per share and sold it today at about $304 per share, their taxable gain would be $276 per share. However, if the investments are held and inherited, the investment basis is adjusted to the market value as of the date of death. If heirs sell soon after death, they could realize gains on appreciated assets with little or no tax liability. This step-up in basis treatment also applies to real estate and is especially valuable if you’ve owned your home or other property for many years.
Roth IRAs are funded with after-tax dollars. Withdrawals are income tax-free, which continues when heirs receive the Roth. Traditional IRAs or 401(k)s require heirs to pay taxes on withdrawals, and accounts must be emptied ten years after your death. If you have both traditional IRAs and 401(k)s, consider spending down the traditional IRA or 401(k) to preserve the better asset for loved ones.
Finally, leaving assets in a trust fund is a seamless process in which property goes directly to the beneficiaries as directed by the trust document. If you leave property to heirs outright, it’s subject to their creditors’ claims. However, if it remains in a trust, it is protected. If you are worried about your heirs’ ability to manage a large sum, you can also create limits for how much money is distributed and when.
Mindful planning today, with the help of an experienced estate planning attorney, can ensure your heirs receive not just wealth, but peace of mind. Showing your love through advance planning is a meaningful legacy, giving loved ones the freedom to build on the foundation you created and honor your life. Beck, Lenox & Stolzer attorneys know all these answers and more. They are in a great position to help you develop an estate plan that can minimize tax liability, and maximize their inheritance. If you are a new client with this, schedule a free phone consultation today.
Reference: Kiplinger (Jan. 3, 2026) “What is a Good Inheritance? Six Great Assets to Inherit”
