[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.amorusolaw.com\/blog\/can-my-estate-plan-include-illiquid-assets-like-real-property-and-ownership-interests\/#BlogPosting","mainEntityOfPage":"https:\/\/www.amorusolaw.com\/blog\/can-my-estate-plan-include-illiquid-assets-like-real-property-and-ownership-interests\/","headline":"Can My Estate Plan Include Illiquid Assets, Like Real Property and Ownership Interests?","name":"Can My Estate Plan Include Illiquid Assets, Like Real Property and Ownership Interests?","description":"\u201cNo good estate plan can afford to ignore the other assets, the ones called \u2018illiquid.\u2019 That category includes anything that can\u2019t readily be converted to cash, in a regulated market with readily determined prices.\u201d Many people are focused on their traditional assets that generate monthly statements, like bank and investment accounts, stocks and mutual funds. […]","datePublished":"2019-12-28","dateModified":"2024-11-05","author":{"@type":"Person","@id":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/#Person","name":"Amoruso & Amoruso LLP","url":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/","identifier":5,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Amoruso & Amoruso LLP","logo":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","width":0,"height":0}},"image":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b0240a4fbbf96-scaled.jpg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b0240a4fbbf96-scaled.jpg","height":1707,"width":2560},"url":"https:\/\/www.amorusolaw.com\/blog\/can-my-estate-plan-include-illiquid-assets-like-real-property-and-ownership-interests\/","about":["Estate Planning","Family Business","Heir","Real Estate","Real Property"],"wordCount":537,"keywords":["Estate Planning","Family Business","Heir","Real Estate","Real Property"],"articleBody":"\u201cNo good estate plan can afford to ignore the other assets, the ones called \u2018illiquid.\u2019 That category includes anything that can\u2019t readily be converted to cash, in a regulated market with readily determined prices.\u201dMany people are focused on their traditional assets that generate monthly statements, like bank and investment accounts, stocks and mutual funds. However, those assets, which are called \u201cliquid\u201d because they can be readily converted to cash, are often less than half of their entire portfolio. Wilmington Biz advises readers not to ignore their illiquid accounts in the article “Don\u2019t Overlook Those Harder-To-Sell Assets When Making An Estate Plan“.First, let\u2019s see what assets fall into the illiquid category. Commonly, they include:Real estate, collectibles, artwork, cars, livestock, mineral rights and timber, as well asFinancial instruments that don\u2019t have a ready market: hedge funds, options, stock in non-public corporations and some types of debt securities.The biggest consequences of leaving these assets out of an estate plan isn\u2019t felt until after the owner dies. First, estate taxes must be paid which are levied on the value of all inheritable assets transferable to heirs. Those taxes are due in a matter of months. However, if a good chunk of those assets are illiquid, they may need to be sold in a hurry to raise the cash needed to pay the taxes or debts of the estate.That presents a real problem for heirs.Many illiquid assets can\u2019t be sold, or have to be sold below their market value, if they have to be sold within a tight nine-month window or a reasonable estate administration time frame. If the decedent owned real estate in a region were prices are in a slump, the sale price will be lower than if there were enough assets to pay the taxes and wait for prices to return to normal or even become robust.A will often divides the estate in a way that has nothing to do with the actual value of the assets. Let\u2019s say three children are left a third of an estate, two-thirds of which are real estate and one-third of which is cash or liquid assets. The real estate may need to be sold, if the heirs don\u2019t want to own an undivided interest in the real estate property together.Here\u2019s a more common situation: If the amount of cash needed to settle the estate is far less than the actual value of an illiquid asset, but the only way to get cash is to sell the asset, something that might have been hoped to be passed on to the next generation may be lost. That includes family farms, a family business or an heirloom.Careful planning with an experienced estate planning attorney well in advance can avoid this and similar situations, where illiquid assets are concerned. It may mean setting up and funding a trust or using life insurance. An estate planning lawyer will be able to guide the family through the process to protect assets, but it must be done well in advance of the person\u2019s death.Reference: Wilmington Biz (November 27, 2019) “Don\u2019t Overlook Those Harder-To-Sell Assets When Making An Estate Plan“"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog","item":"https:\/\/www.amorusolaw.com\/blog\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Can My Estate Plan Include Illiquid Assets, Like Real Property and Ownership Interests?","item":"https:\/\/www.amorusolaw.com\/blog\/can-my-estate-plan-include-illiquid-assets-like-real-property-and-ownership-interests\/#breadcrumbitem"}]}]