Is Inheritance Planning Equal to Apartment Construction? The Reason I Say No

When you hear the term "inheritance planning,"
what comes to mind?

I once thought that
"building an apartment" = inheritance planning
.

But now, I think differently.
That is because it is notessential "inheritance planning".

Apartment construction is not "inheritance planning" but "inheritance tax planning"

First, it is important to clearly distinguish between these two.

It is true that compared to inheriting cash or vacant land as is,
building an apartment and managing it as a rental property
may lower the inheritance tax valuation and reduce the tax burden.
This is a fact.

However, that is merely "inheritance tax planning",
not "inheritance planning".

The pitfalls of apartment construction

In the past, I seriously considered inheritance tax planning through apartment construction.
But now, I
do not recommend it at all.

There is one reason for this.
The return on risk is simply too low.

Land prices, rental demand, construction costs, management fees, aging risks...
Just because you own land does not mean that everyone will succeed
in rental management.

For a farmer who owns land to get involved with naive expectations is
a world with far too much risk.

Personally, thanks to the apartment my parents built forinheritance tax planning,
I am alreadya joint guarantor for 200 million yen in debt,
and it was clear that even if the inheritance tax was reduced slightly,
it would be "a drop in the bucket."

What I needed was not "inheritance tax planning" but "inheritance planning"

So, what is truly necessary inheritance planning?

It is"passing on assets to the next generation in harmony".
In other words,creating a system that prevents disputes and keeps the family from fighting.

This is the essence of "inheritance planning."

The difference between inheritance planning and inheritance tax planning

Inheritance planning
- Content: Wills, lifetime gifts, family trusts, promoting discussion, etc.
- Purpose: To prevent family disputes (inheritance feuds)
Inheritance tax planning
- Content: Apartment construction, use of life insurance, asset restructuring, etc.
- Purpose: To reduce the burden of inheritance tax

Both are important, butthe priority should be "inheritance planning".
Tax saving is justone meansto that end.

Summary

Building an apartment is an inheritance strategy—.
Having once believed that, this is what I think now.

Both 'protecting' assets and 'protecting' family relationships are important, but
I am convinced that the latter is far more valuable in the long run.I am convinced of this.

I encourage you all to think about an
'inheritance strategy'that suits your own situation.

Please enjoy my past articles as well.