Slicing The Inheritance Pie

ASSET RICH, CASH POOR

Let's say you own a $2 million business, which you intend to pass to your daughter. But, you also have a son who isn't involved in the business and doesn't want to be a future part of it. How do you fairly treat family members who aren't involved with the business when other family successors inherit your company?

ESTATE EQUALIZATION

You could have your heir who won't be in the business inherit an equal amount of other assets and cash. What, however, do you do if your portfolio is asset-rich but cash-poor? With sufficient time and careful investing, you could sock cash into an account you will use to equalize your estate.

Or, you could buy a life insurance policy with a $2 million death benefit going to your son as beneficiary, while your daughter becomes beneficiary of your company.

Talk to you legal and tax professionals to learn how you might structure an estate equalization approach that works for every family member.