Estate Planning For Your Personal Property; 4 Essential Tips
DID YOU KNOW…..
When one leaves this earth, one can’t take anything along for the next part of the journey?!
So, “things” must be dealt with. Estate planning for your favorite objects, art, collections, cars, and even the items you could care less about, must find new homes.
Sadly, estate planning of “things” is often kicked-down-the-road by many of (y)our clients and their families. Have you been on the receiving end of someone’s neglect to manage their planning? And, just how much did you enjoy dealing with THAT? All that “stuff” ends up being more work than anyone can possibly anticipate. Respectful decision-making becomes hard work; I’ve known many a loving child who ends up thinking unpleasant thoughts of the loved ones who left this muck behind. So, don’t put off your own planning any longer. Know someone who needs to do this? Be relentless and make sure to “Get ‘er done!”
Less overlooked is the estate plan which dictates non-material concerns like financial and business interests, intellectual property, and the like; but the endgame of those considerations seem much more real and material, i.e. the cash flow and material wealth which those assets generate.
One can’t divide, bestow, or deed Aunt Suzy’s memories or sense of humor, but, helping her with an estate plan for her “things” can do the next best thing; organize, protect, and distribute the object(s) which she cherished and prized. From armchairs to firearms, cars to cabochons, the challenges of estate planning are intricately tied to the logistics of tangible personal property.
For your consideration, here are some of the oft overlooked challenges which can make estate planning so dicey. A competent, professional appraisal can solve or protect your heirs from many of these issues, but cannot determine which of your grandchildren should get your vintage gold wristwatch; only you can do that!
If you can’t find it; you can’t prove that it’s in your possession. Last time we checked, you can’t give away things which aren’t yours. Keeping track of your personal property for the sake of estate planning is, in truth, an immensely difficult and tedious task. Just knowing the correct terminology, the connoisseurship terms associated with specific mediums, is a challenge in and of itself. Without those characteristics of value, you can neither describe nor value an item. An improper description not only has the potential to impact statements of value, but also statements of identification and inheritance.
Items of personal property might go missing during a move, lost in your luggage, cherry-picked by a sibling, lifted, damaged or lost. Regardless of the consideration as to whether the missing articles are covered by insurance, the potential loss of the estate’s content(s) could make your heirs and beneficiaries feel vulnerable and violated. If you create an estate plan and the items mentioned therein cannot be located years later (when the time comes), then the expense of inventorying, appraising, insuring, and including them into the estate plan will have been all for naught.
As mentioned previously; if you can’t find it; you can’t give it away. To make sure that your selected beneficiaries and heirs receive exactly what you intend, it’s imperative to keep all legal parties (attorneys, executors, maybe heirs) aware of the most current inventory of your “stuff.” Equally important is the disclosure of the location of inventoried items. For illustrative purposes, let’s say that your estate’s most valuable artwork is hanging on loan at the local history museum. If your estate accounts for the work but fails to note it’s change of location, that museum might end up keeping the piece as an unintended bequest!
A detailed, competent, professional appraisal can and will solve or protect you from all of these aforementioned un-pleasantries of estate planning; the document will include photographs, valuations, condition reports, provenance data, and location data for the selected items of an estate which meet a certain value threshold (determined by you). It will clearly tell you the identifying features of the estate’s contents, so there is no squabbling over which item is intended for whom. It will tell you where the items were last located, and in what condition, so that proper insurance liability can be claimed if the items are unexpectedly missing, or damaged by third parties. It will document the origin and provenance of the estate’s contents so that their authenticity and value is not undermined, challenged, or nullified (i.e. swindled) without due cause. It will tell you what the items are worth, so that all parties clearly understand their relationship to you (just kidding!), and the government, if necessary, taxes your estate accordingly.
AND THE BEST PART? Hiring a professional appraiser relieves the burden!
Co-authored by: Lynn Magnusson, ASA, AAA , and Kollin Handler, Communications Director