When creating your estate plan, the process can often be challenging, confusing and extremely time-consuming when you try to tackle the task alone. If you own a large number of valuables, figuring out how to delegate your assets properly typically requires the help of qualified legal professionals such as the attorneys at Rodier Family Law. Here, the estate planning attorneys at Rodier Family Law discuss the process of including valuables and collectibles in your estate plan, and how to ensure they are properly delegated after your passing.
Defining Collectibles and How They Affect Your Estate
According to the IRS, collectibles can be defined as any work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage, or tangible personal property deemed a “collectible” under IRC Section 408(m). While collectibles are not limited to the items above, many collectibles appreciate over time due to their intrinsic value, especially those that are limited-edition or original works of art. When creating your estate plan, it is important to note that collectibles are generally distributed in two methods, either to your designated heirs, or to a charitable organization. Furthermore, the federal tax associated with collectibles tends to be much higher than that of other capital assets, so when working on your estate plan, research the laws and regulations associated with the sale of collectibles and consider consulting a financial expert. While this may seem like a daunting task, including valuables such as those stated above in your estate can skyrocket the value and bring future benefits to your heirs.
How to Establish Proper Valuation of Your Assets
Because many collectibles have intrinsic value, it can be difficult to properly determine the worth of your collectibles when creating your estate plan. With items such as jewelry or antiques, each family member may differ in opinion on the worth of these items, which can halt the delegation of assets and create conflict among family members. To prevent these potential conflicts, consider getting appraisals of your valuables and collectibles early in the estate planning process. Additionally, see if there are local auction houses or businesses that specialize in working with collectibles to ensure fair and proper valuation. Regardless of whether or not your heirs plan to hold or sell your valuables, appraisals must be made in order to determine the value of your entire estate, and if the value of these assets reaches a certain level, tax laws require that your values must be appraised as well.
Tips to Prepare Your Valuables and Collectibles
When creating your estate plan, speaking with individuals early on that will have a role in determining the full value of your estate is vital. When incorporating your valuables into an estate plan, make sure to get each valuable appraised by a professional that you trust. Moreover, keep a record of purchase history, damages, or any other costs or improvements to your collectibles in order to streamline the valuation process. Be sure to detail the delegation of your valuables entirely in your estate plan, such as shipping costs or protective measures that your beneficiaries may have to deal with after your death. Finally, speak to your potential beneficiaries and discuss the importance of each collectible to them. Having a clear and concise plan before you pass can alleviate stress and hardship for your beneficiaries when determining how to divide your estate.
The Qualified Estate Planning Attorneys at Rodier Family Law Can Help
While the estate planning process is complex, taking the time to properly determine the value of your collectibles early in the process is important. At Rodier Family Law, our top priority is that your property will be handled in accordance with your wishes and that your assets are distributed properly. To learn more about the estate planning process and gain insight into protecting your valuables and collectibles, contact our Bel Air office today.