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What factors might influence how estate assets get divided?

When individuals in Houston are building an estate, they might not give much thought to what form that structure is taking. They might not even give much thought to the fact that an estate is being created.

You buy a home with the idea that it will be shelter for your family right now, you don't necessarily think about what the place will represent in the event you die. The same could be said for pieces of art you purchase. You typically buy such things for the pleasure they deliver today. Maybe one of your heirs will develop a sense of attachment to a particular piece. Who knows? Moreover, does anyone really think much about the tax implications down the road? Qualified estate planning, administration and probate attorneys do.

Opinions will likely differ about what form is best for a particular asset, but we feel confident many experts would agree that to make things easy for heirs, there are simple factors worth considering.

Generally speaking, answering three questions may be the easiest way to determine ease of distribution.

Can it be converted to cash simply? Assets that can be sold quickly without loss of value are considered liquid assets. A home would not necessarily fall into this category. Pieces of art, cars, furniture or other property wouldn't either. To do what's best for the family, experts advise that the more assets you can liquidate before passing, the better.

Is there likely to be any competition for items of sentimental value? If you have a vacation home, this might be an asset of contention later. Some family members might have more attachment to the place than others. To avoid potential conflicts among loved ones later, have discussions now and work out an arrangement that everyone can live with.

Are there actions I can take now that might limit the tax hit to heirs? Regular readers of this blog know we talk a lot about setting up trusts as one possible way to shield against incurring unwanted taxes. What form of trust is used can vary depending on the circumstances and methods of funding, so the way to make things easier for the family is to work out such details in a comprehensive estate plan.

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