ADVERTISING: ADVERTORIAL - The most problematic assets to leave your children and grandchildren (and what to do instead)

When Idaho families plan their estates, the conversation usually starts with what they want to leave behind. Just as important is how. Some assets, passed down without planning, cause more trouble than they're worth.

Traditional Retirement Accounts (IRAs and 401(k)s)

Under the SECURE Act, most non-spouse beneficiaries must drain an inherited IRA within ten years. If your child is in peak earning years, those forced withdrawals can land in their highest bracket, sending 30–40% to the IRS.

Instead: Consider leaving Roth accounts to heirs while spending traditional accounts in retirement, or do strategic Roth conversions now. These strategies should be discussed with your financial advisor, and your first goal should always be to do what is best for yourself in retirement, but to the extent you can, there are some strategies here that can be better or worse for your beneficiaries.

The Family Home With Multiple Heirs

Few things tear families apart faster than co-owning Mom and Dad's house. One child wants to keep it, another to sell, a third to rent it. Taxes and repairs keep coming whether heirs agree or not.

Instead: Decide during your lifetime with input from your kids about what they would or would not want. Use your will or trust to gift the home to just the one child who wants it (with others receiving equivalent value elsewhere) or use a buy-sell provision in your estate plan so one heir can purchase the others' shares at a fair price. Or simply require the house be sold and the proceeds be divided up.

Lake Cabins and Vacation Homes

Idaho’s lake and mountain properties carry decades of family memories — and produce the worst inheritance disputes I see. Heirs fight over weekend rotations, dock repairs, Airbnb rentals, and whether to sell.

Instead: Place the property in an LLC or "cabin trust" with an operating agreement covering scheduling, expense-sharing, rental policy, and a buy-out formula. Fund a maintenance reserve with life insurance or other assets so the cabin isn't a financial burden the day you're gone.

Cryptocurrency and Digital Assets

Crypto is the asset I see lost most often. Without the private key or seed phrase, even your executor can’t recover it — coins on a forgotten hardware wallet are gone forever. Idaho’s digital asset law helps fiduciaries reach online accounts only if you’ve documented access in advance.

Instead: Keep a secure, updated inventory of wallets, exchanges, and keys — stored outside your will (which becomes a public record during probate). Use beneficiary designations where exchanges allow them, and name a successor trustee who understands “cold storage”.

Income-Producing Rental Properties

A rental looks like a gift; but for the wrong heir, it's a second job. Tenant calls, repairs, vacancies, liability, and depreciation recapture all transfer with the deed. Co-ownership among heirs with different appetites for landlording breeds resentment fast.

Instead: Hold rentals in an LLC for liability protection and cleaner transfers. If only some heirs want them, equalize with other assets or use a buy-sell provision in your estate plan so one heir can purchase the others' shares at a fair price. Avoid gifting appreciated rentals to anyone while you are still alive — heirs receive a stepped-up basis at your death that can erase decades of capital gains — don’t rob them of that benefit by gifting this type of asset prior to your death unless there is a compelling reason to do so.

Timeshares

I have never met an heir grateful to inherit a timeshare. Maintenance fees outlive the owner, the resale market is worthless, and heirs are stuck with ongoing obligations.

Instead: Dispose of timeshares during your lifetime, even if it means paying the resort to take it back. Heirs can sometimes disclaim the inheritance, but it must be done quickly and correctly. Ask any estate planning attorney — timeshares are nightmares.

Cash to Beneficiaries Who Aren't Ready

A lump sum to a young adult, a child with addiction, a beneficiary in divorce, or one receiving needs-based benefits can be disastrous — inheritances are spent in months, lost to ex-spouses, or used to disqualify recipients from Medicaid.

Instead: Use a trust with appropriate standards. A spendthrift trust protects against creditors and poor judgment; a special needs trust preserves benefit eligibility; staggered distributions give beneficiaries time to mature.

Business Interests Without a Succession Plan

A family business left equally to children who don't all work in it is a recipe for litigation. Active heirs feel exploited; inactive ones feel cheated.

Instead: A buy-sell agreement funded with life insurance lets active heirs cleanly buy out the others. Operating agreements should address voting, distributions, and exits well before you pass.

The pattern across all of these is the same: outright distribution of complicated assets without a plan. Trusts, entity structures, and well-drafted beneficiary designations exist to solve that. If you aren't sure your plan handles these assets well, schedule a review.

My law firm is currently offering free telephonic, electronic, or in-person consultations concerning probating estates or creating estate planning documents.

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Robert J. Green is an Elder Law, Trust, Estate, & Guardianship Attorney and the owner of Kootenai Law Group, PLLC in Coeur d’Alene. If you have questions about estate planning, probates, wills, trusts, powers of attorney, guardianships, Medicaid planning, or VA Benefit planning, contact Kootenai Law at 208-765-6555, [email protected], or visit www.KootenaiLaw.com.

This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.