Baseball cards, sneakers, antiques, and stuffed animals might sell for a lot, Tobias Salinger writes in Financial-Planning.com, but those items can turn out to be an emotional drain for heirs.
Planning strategies for collectibles start with verifying the market value, which, by definition is volatile and, to a great degree, subjective, based on “what someone is willing to pay”. What’s more, in transferring collectible items – whether to a buyer or an heir – there are costs related to:marketing, packaging, shipping, and insuring collectible items. Importantly, there may be one beneficiary who shares the enthusiasm for the collectible, while others do not, and that may offer an opportunity to, through life insurance, equalize the inheritances. If the goal is to have several beneficiaries receive “equal:value” from your assets after you pass, it becomes all the more important to clarify these preferences, and then make them part of the overall estate plan.
Salinger refers to an important observation by Craig Duvarny, CFP®, an advisor who is a former owner of a baseball card business. Duvarny recommends that hobbyists give heirs a detailed explanation of the collectible assets. Often, he notes, “you’re giving it to a person who has no idea what this actually is.”
At Geyer Law, we often remind our Indiana estate planning clients that, in the estate planning process, there are certain steps that only they themselves can take care of. As the authors of The Beneficiary Book advise, it’s a good idea to inventory your physical possessions, making lists of the people you would like to end up owning each, and explaining the potential value (both sentimental and monetary) of certain possessions and collectibles.
Collections can be quite valuable, like art, coins, stamps, train sets, firearms, vintage guitar and record collections, one Wyoming attorney points out, but sometimes the value is more sentimental than monetary. Making arrangements in advance will ensure the collection is handled the way you want, and that its value is maximized.
Starting conversations with adult children early definitely smooths the transition of wealth, and at our law firm we try, wherever possible, to bring together family members of different generations to share values and information about specific assets..
– by Cara M. Chittenden, Attorney with Rebecca W. Geyer & Associates
