Recently, a member of our extended family passed away. In the process, he left his heirs with problematic assets with which to deal, and in some cases, pay taxes upon.
While in some way or another, taxes are prevalent in just about every aspect of our lives, it doesn't mean that we have to put an undue tax burden upon our children when we pass away. Therefore, lately I've been thinking about things that I can do as I get older that can help my children receive our assets with lesser tax repercussions.
Call me old fashioned, but I still like cold, hard, cash. And what's easier -- at least at this point -- than to inherit cash?
As long as our kids are financially responsible, I hope that if we have anything at all to pass along to them as we enter our golden years that we can begin to convert some -- if not a large portion -- of out assets into cash. I can't imagine many easier to deal with -- not to mention exiting -- things to come across after the 'ol parents kick the bucket than a safety deposit box or two full of money in cash form. Then they can take this money tax free and do with it as they please.
Speaking of exciting, I guess about the only thing I could think of that would be more exciting than finding cash, would be finding gold and silver in a safety deposit box. Maybe a bit more stable and better fit for the long-term when compared to cash, I'm sure that our kids stumbling across a few ounces of gold or rolls of silver coins certainly wouldn't bother them.
The great thing about such assets is that the kids can then hold onto them either for themselves or their children as a hedge against things like inflation, monetary fluctuations and devaluation, and civil unrest or societal breakdown.
Depending upon the situation, a home/property can be a wonderful thing to inherit or a real burden. Currently, we don't carry a mortgage on our home. If we can keep our home well-maintained, avoid taking on any debt against our equity, and keep any liens or unpaid tax burdens off the property, our home (or any other property we hold) could be a great way to pass assets along to our kids, tax free (except maybe for the property taxes). Then they could choose to keep the property or sell it and take the proceeds.
Beyond just considering a home or land as property though, other property can be valuable forms of tax-free inheritance. Things like my baseball card collection, certain antiques, furniture, and similar items of value that we've yet to accumulate throughout the remained of our lives could be passed along to our children, hopefully without tax repercussions.
It might seem kind of silly at this point -- considering that I'm certainly no Hemingway or Dickens -- but I still find value in some of my work as a writer. And who knows, like some artists, my work might actually be worth more after I'm dead and gone.
Therefore, I want to pass along not only the rights (that I still retain) of my work to my children, but the works themselves. It wouldn't do them much good monetarily for me to pass along rights to possibly unpublished work, but not the manuscripts. And while any income they realize from the works might be taxable, the work itself -- until it starts earning revenue -- is not.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
More From This Contributor: