Passing down an inheritance? Here’s how to handle these 4 complicated assets — including houses and retirement funds.

Nothing in life is certain except for death and taxes, which is why comprehensive inheritance planning is critical.

After spending a lifetime accumulating wealth, investors should also have a long-term plan for their assets. Often, people opt to divide their assets among their children or grandchildren. Some also participate in planned giving by donating assets to a philanthropic cause.

In an interview with B-17, Vimala Snow, head of wealth strategy at Cresset Capital, shared four popular yet complicated assets to pass down to the next generation. Here are her best tips to make the wealth transfer process as smooth as possible.

Houses

Snow’s clients often plan to divide their assets equally among children, which sounds simple in theory.

In practice, this can be quite difficult, especially when it comes to a large asset like a home, which is many times the most valuable asset in an estate. Beneficiaries may disagree over what to do with a house — tensions can arise if one beneficiary wants to sell but another wants to keep the asset.

Make sure to discuss any areas of disagreement ahead of time. Especially in the case of a family vacation home, make sure beneficiaries are aware of the costs of maintenance, taxes, and other expenses.

A way to get around this is to split the overall estate balance equally instead of divvying up individual assets, Snow recommended.

“There can be a decision made in the future with respect to who’s actually going to get what. “Obviously, owning a third of a home is not the easiest thing to do,” Snow said.

Retirement accounts

You can pass down retirement accounts, but beware of tax implications.

Your beneficiaries won’t be able to make additional contributions to an inherited IRA, and they’re on the hook for any taxes on distributions. They’ll also have to empty the inherited IRA account within 10 years.

There are a few ways to reduce the tax impact. First, the tax rules are less strict for spouse beneficiaries — they can roll over the inherited IRA into their personal account and are exempt from the 10-year rule, meaning that they can spread out tax payments over a longer period of time. Passing down a Roth IRA also has no tax implications.

Consider donating your retirement account to charity for additional tax benefits, Snow suggested. If you donate an IRA to charity upon death, neither you nor your beneficiaries will pay income taxes on distributions of the assets, and the charitable tax deduction can be used to offset estate taxes. You can also choose to split your IRA between your beneficiaries and charities of choice.

Family businesses

Family businesses are especially challenging because owners naturally feel a sense of attachment toward an asset that they devoted much of their lives to.

However, their children might not feel the same way, according to Snow.

We’ve certainly seen adult beneficiaries who inherit those assets and who feel really unprepared to handle them,” Snow said.

If you find yourself in this situation, Snow has the following advice: Make sure your beneficiaries have the skills and desire to be involved early on.

If your beneficiaries don’t want to take on the business, you have a couple of choices. If you still want to keep the business in the family, you can consider bringing on an outside professional to outsource the business operations. You can also liquidate the business, which will convert business assets into cash quickly.

This advice is also applicable to other more complicated assets, such as a family investment vehicle, real estate, or farms.

“If you have that more complex balance sheet, making sure that your kids understand the complexity of some of these types of assets is really important,” Snow said.

Collections

Snow often encounters clients who have more unique assets, such as collections of cars, antiques, or artwork.

Similar to a family business, these assets might hold a lot of sentimental value but might not be easily passed down.

Sometimes beneficiaries will keep an item to commemorate the deceased, but Snow also sees collections being disbanded.

If the collection has a high degree of significance to you, consider donating it. Donating collections can be an effective way to circumvent capital gains and estate taxes.

“Oftentimes that’s a really nice way to give to a museum,” Snow said. Some people choose to further cement their legacy by attaching their name to their donated collections.

Communication is key

At the end of the day, having frequent and clear communication about estate planning is key, according to Snow.

“A lot of times parents think that their kids understand, but if you were to ask the kids, they would say, ‘We have no idea how Mom and Dad think about these things,'” Snow said.

Confront potential disagreements over assets like a house early on, and make sure to provide details on complex assets like a family business. Being proactive about inheritance planning can make the wealth transfer process easier for everyone involved.