Almost any kind of money management requires an astute differentiation between good assets and bad assets. That requirement invariably includes estate planning, since differentiating between the kinds of assets can have a huge effect on the value of the estate. A new ranking seeks to help people who need to separate the good ones from the bad ones.
One of the most highly recommended financial assets is depleted partnerships. With these, the depreciation on the material holdings of a company you're invested in can affect the rationale or holding onto their stock. Additionally, selling that category of stock before it goes to heirs as part of your estate can result in significant tax consequences, providing another reason to hold onto it.
Tax consequences of selling too soon are also a key reason for holding onto collectibles. This category includes gold, gold bullion and artwork. Long-term gains on the sale of assets in this category can be taxed at a 28 percent rate, making it more practical to hold onto them and pass them down to heirs.
Roth accounts are also in the top four of assets to hold onto. When income tax is paid on a 401(k) or IRA and the money is converted into a Roth account, the funds are then free of any further income tax burden. This makes them an especially attractive prospect for estate planning.
Of course, individuals currently pursuing estate planning will want to look at each option carefully to see which ones are right for them. A qualified professional with experience in the ramifications of each option can be tremendously helpful in this regard.
Source: Forbes, "Estate Planning: A Ranking of Good Assets and Bad Assets" William Baldwin, Aug. 25, 2014