Dividing up your assets between your heirs is often difficult -- although it's a necessary part of estate planning. However, there are additional complications involved when you start trying to divide collectible items. Whether you own a few odds and ends that have mostly sentimental value or a large collection of expensive vintage wines, leaving collectibles to your heirs requires some special planning.
Frankly, it's pretty easy to divide the money you have. Dividing "stuff" is a whole lot harder. If you think that your heirs won't possibly fight over your things -- think again. Everything from Mom's cast iron frying pans to Dad's poker chips and playing cards can become extremely important to family members when they take on new meaning after their owner is gone. There are added complications when the value of the item or items involved is substantial. Here are the things you should consider.
You can't effectively plan your estate when you don't know the value of what you have. While the ordinary mementos of your life may not have any great monetary value, you need to think about collectible items and do a little research. Things like coin collections, stamp collections, pieces of art, vintage cars, comic books, fine jewelry, and more may need to be evaluated by an expert to determine their worth.
Otherwise, it may delay the distribution of your estate as your executor figures it out. In addition, you could end up leaving something of large value to one heir -- and leaving the others less in comparison.
Another reason that you need to have special items and collections valued is the potential for estate taxes. Estate taxes on your collectibles can be hefty -- and if you don't leave an heir enough cash to cover those taxes, he or she may have to sell off whatever cherished collectible you intended to pass on just to pay the IRS.
Some of your heirs may be more sentimental than others -- which means they'll value your things over your money. It may also be a question of lifestyle. If one of your heirs lives a somewhat nomadic existence that doesn't particularly accommodate a lot of personal possessions (like a child that's focused on a military career), it may even be difficult to inherit a lot of your personal possessions.
That's actually helpful. If some of the things you are leaving behind have a significant monetary value, you can leave the items to an heir that really wants them and the equivalent monetary value to the others. That balances out your estate and keeps all of them from feeling slighted.
Often, the best thing to do regarding collectibles is to sit your heirs down well in advance and talk about not only their preferences but the value of different items -- and what that means in terms of how you will divide your liquid assets as well. That can ease misunderstandings and help keep your family from a lot of unpleasant situations later.
For more information, check out a website like https://www.linskylaw.com.