This is an article from the Law Offices of Cheryl David (http://www.cheryldavid.com/) in Greensboro, North Carolina, that we thought others may find helpful.
When it comes to collectibles and estate planning, there are some issues that you might need to consider that do not typically arise with other types of property. For people with collections, trying to determine what you want to happen to them in the future can be difficult. Questions of value and distribution are key, but so too are other issues, such as emotional value perceived desirability. Today we are going to take a look at some common issues surrounding collectibles and estate planning.
Collectibles and Estate Planning. Current Value and Future Value
If you use your collectibles as a part of your inheritance plan, how do you determine a value? The collectibles market can be volatile, unpredictable, and hard to evaluate for estate planning purposes. Collections built at a time when there was higher demand for the items can see their values plummet once that demand eroded. The obvious example of this phenomena is the sudden spike in interest followed by a collapse in value—known as a bubble—that happened to collectibles such as Beanie Babies and Longaberger baskets.
Other collections can increase in value. For example, in the late 1990s most manual typewriters from the 50s or 60s were almost worthless. Today, the typewriter as a collectible market seems to be growing, with colorful models fetching hundreds, sometimes thousands of dollars on sites such as Etsy and eBay.
The point is that it can be hard to determine the future value of collectibles. Determining a present value is easier, but periodically reviewing the valuations and making adjustments to your plan as necessary is a good idea.
Collectibles and Estate Planning. Inheritances and Desirability
For you, the collector, your items might represent a story, a piece of history, a personal connection to you, your family, or your experiences. You may take pride in acquiring each piece of your collection, and may feel that each is valuable, but others may not share your enthusiasm. For example, if you want to leave your collection of oil cans to your children but none of them are interested in having or keeping any part of the collection, you may need to consider other avenues, such as directing your executor to liquidate the collection and distribute the proceeds as inheritances.
Collectibles and Estate Planning. Inheritances and Sentimental Value
Regardless of the dollar value of any collection, or individual part of a collection, you may also need to consider sentimental value of the items. Even if the dollar value is low, the emotional connection members of your family might have to any piece could be substantial. Developing a plan that will distribute sentimental property fairly will go a long way in heading off any potential conflicts that might arise over the emotionally valuable items.
- Estate Planning is Essential Whether You Are Married or Not - April 25, 2018
- Income Tax Basis in Estate Planning – Part 2 - April 23, 2018
- The Downsizing Generation: How to Handle a Surplus of Stuff When a Loved One Ages - April 18, 2018