Fixed assets such as houses, land, and buildings are often considered symbols of financial stability. They carry high value, have clear ownership status, and are an important part of building family wealth. Ironically, however, these very assets are often the ones that trigger conflicts and prolonged disputes when it comes to inheritance.
Many families become entangled in problems not because of a lack of assets, but because of insufficient cash to manage the inheritance administration process, from determining the beneficiaries/heirs and handling taxes to covering the costs of ownership transfer. Without proper planning from the testator, this process can become both a financial and emotional burden for the family. Therefore, understanding and implementing smart inheritance planning strategies is essential to ensure that the inheritance brings peace of mind rather than new problems to the family.
The Threat Behind Fixed Assets: High Value but Illiquid
A common situation is that a family appears prosperous with many assets, but is actually cash-poor because almost all of its wealth is illiquid, even though all inheritance administration costs must be paid in cash.
When urgent financial needs arise, beneficiaries/heirs often have no choice but to sell assets in a hurry (panic selling). As a result, assets are sold below market value and the wealth that should have been inherited is drastically reduced.
The situation becomes even more complicated if the deceased leaves behind debts that must be paid off immediately. Fixed assets cannot be used right away because the process of selling them and completing the legal requirements takes a long time. This often triggers internal conflicts among beneficiaries/heirs. In fact, inheritance should be a source of comfort and continuity for the family.
Prioritize Estate Planning Early
Estate planning is often considered relevant only when someone reaches old age or has accumulated significant assets. However, this process should ideally begin as early as possible, when financial conditions are stable and health is still good. At this stage of life, people usually have the mental clarity to make decisions while preparing for old age and retirement with greater peace of mind.
Planning your inheritance early gives you time to develop a well-thought-out strategy and ensure sufficient liquidity for your beneficiaries or heirs. This helps minimize potential conflicts and financial burdens arising from the inheritance administration process. In short, it is important to ensure that the financial legacy you have built becomes a solution for your family, not an additional problem.
Here are the important benefits of early estate planning:
1. Clearer and Legally Stronger Inheritance Decisions
You can determine the distribution of your estate fairly, clearly, and officially while you are still in good health. Decisions made under these conditions are more difficult to contest and provide stronger legal certainty for your family.
2. Eliminates Uncertainty for Beneficiaries/Heirs
When all beneficiaries or heirs understand their respective rights from the beginning, there is no room for misunderstandings or disputes regarding the testator’s wishes.
3. Saves on Estate Administration Costs and Taxes
Proper planning helps minimize additional expenses such as legal fees, notary fees, and attorney fees. This allows beneficiaries or heirs to receive their full inheritance without unnecessary extra costs.
4. Accelerates Access to and Disbursement of Inheritance
With the right strategy, such as having part of the inheritance in the form of cash or insurance, beneficiaries or heirs can receive funds more quickly without going through a lengthy and time-consuming bureaucratic process.
To prevent families from being burdened by financial pressures during times of grief, estate planning requires a source of cash that can be used immediately without the need to sell assets. Life Insurance is an effective solution because it provides a Sum Assured that can be quickly liquidated to maintain the family's financial stability.
The Sum Assured can be used to cover living expenses, education costs, and household needs during the estate administration process. These funds also help pay off the deceased’s financial obligations, taxes, and legal fees so that the heirs do not need to spend additional money.
With sufficient liquidity available, families do not have to rush to sell assets and risk potential losses. Life Insurance provides certainty and peace of mind by ensuring that inheritance plans run smoothly and the value of assets is preserved. Inheritance planning is not only about distributing assets but also about protecting families from uncertainty.
For inheritance consultations, you can contact a BCA Life Financial Advisor at the nearest BCA branch office.