Many Americans have some form of potentially valuable collection. Whether you keep old Pokemon cards for fun or invest seriously in antique artwork, it’s important to include your collection in your estate plan.
Keep Clear Records of Valuable Items
One of the most common mistakes that people make is not letting their heirs know how valuable their collections are. This is how stunning antique china and expensive old cars end up getting sold for a fraction of their value. In your estate plan, try to make a note of how much each collectible is worth. Create clear documentation so that your heirs don’t end up accidentally selling the object for far less than its fair market value.
Properly valuing items is also helpful when deciding who gets which collectible. If you know the market value of your property, you can avoid one heir ending up with all the valuable items while another heir gets nothing that is financially valuable. To keep things as fair and accurate as possible, professional appraisals are an essential part of creating an estate plan for collectibles.
Get Help From People Experienced in These Matters
Another big problem with leaving valuable collections to your family or friends is that they might not understand how to care for the items. They can end up accidentally damaging some items or passing them on to someone else for less than they are worth. If you already have connections in the local community for your collection, it is a good idea to reach out to them in advance.
The right team can help you create a plan for how to care for your collection and how to store or sell it once you pass away. By taking the time to do this, you ensure that your loved ones don’t end up overwhelmed and confused with specialty items while they’re trying to process your passing.
Update Your Documents Regularly
Collections are a little different from most other assets. Instead of having a hard value, they have a value that fluctuates based on the whims of the market. For example, the same Beanie Baby that could have sold for thousands in the 1990s might be almost worthless today.
Therefore, it’s a good idea to regularly refresh your estate plan documents. Take the time to get your collections checked and go over all your plans for your collections afterward.
Don’t Forget to Consider Taxes
To ensure that you save as much money as possible, consult with an experienced New Jersey estate planning lawyer about taxes on inherited collectibles. They can assist you with creating a plan that takes your unique situation into account. Depending on the types of collectibles you have, giving them away before your death, or selling them and leaving money to your heirs may be more affordable.
Protect Your Collectibles With a Trust
When you leave assets in a will, you are transferring ownership to your heirs and allowing them to do whatever they would like with them. This can feel stressful if your collectibles are prized possessions you deeply care for.
In these cases, leaving collectibles in a trust can provide peace of mind. Depending on the type of trust, you may be able to dictate specific terms and situations such as your child passing on artwork to your grandchild. If you have particularly large collections, trusts can even be used to launch a museum or otherwise care for the collection in perpetuity.
At the Knee Law Firm, we have experience in handling unconventional, high-end estate planning matters. You can rely on our estate planning lawyers to help you draft a custom estate plan that works for your needs. We can assist you with everything from valuing your collection to creating a trust. To learn more about our Hackensack estate planning services, call us 201-996-1200 or fill out our online contact form to schedule a consultation.