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Estate Planning Considerations: The Value of Family Heirlooms
Published Date : May 11, 2015
We’ve all heard the horror stories of siblings who are no longer speaking to each other after settling their parents’ estate. The feeling that one child got more than their fair share of assets can serve as “the last straw” in the ultimate game of sibling rivalry. Perhaps you’ve even experienced this painful break-up in your own family. In an effort to prevent this from happening to your own children, you’ve likely taken these logical steps: completed your estate planning, established a trust and re-titled all assets putting them in the name of your trust to fund it. Most importantly, you feel you’ve made sure that each child will receive an equal distribution of assets from the estate. So what else is there for you to do? If you haven’t considered the division of your personal effects —like the pocket watch you inherited from your great granddad — you may have forgotten about some of the most valuable items in your estate and who will receive them. Any idea how much your toy train collection is worth? It might be time to find out. And while your family heirlooms may not be significantly valuable in the monetary sense, they can carry great sentimental value. Giving some thought to how these will be divided later, documenting it, and discussing that with your kids now is an important step in the estate planning process.
Perhaps you feel as though you’ve already handled the division of specific items by simply walking through your house with your kids and asking them to, “Tell me what you want when I’m gone.” The problem is, without written documentation of this assignment, there could easily be a, “Mom promised her engagement ring to me!” moment in the future when two siblings both have a strong preference for the same item. While the bulk of your tangible personal property has likely been allocated to your trust with a blanket assignment, valuable collections and specific gifts of personal effects should be discussed with your estate planning attorney and handled separately. The goal is not to divvy up each and every item you own, but to make meaningful bequests with the items that truly matter to you or your beneficiaries.
If you are unsure of your beneficiaries’ preferences, or you are uncomfortable about assigning tangibles to specific heirs, you can simply provide guidance about the methodology used to distribute items when the time comes. This also helps ensure you don’t give your priceless thimble collection to your niece who views it as junk. Some methods of division to think about include:
- Heirs take turns selecting items they want until they reach items no one wants. These can be sold and profits divided or donated. Monetary differences based on the appraised value of the item can be made up with cash from the estate.
- A silent auction where heirs bid with their estate dollars. The winning bidder agrees to pay the estate for the value of the item they’ve won from their share of the inheritance. No actual dollars change hands as the payment is made by reducing their share of the estate by the value of the item they’ve won.
These days, a life well lived can often come with a significant accumulation of stuff. Thinking now about who should get what and more importantly, stressing to your heirs that you place greater value on family and relationships than material treasures, just may help keep the peace.
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