Pulling together a great collection of anything can take a great deal of effort and a lifetime of diligence. That noted, don’t forget that it also takes great estate planning effort and diligence to properly pass on a lifetime’s worth of collecting. How does the collector plan for his or her estate?
Estate planning is all about deciding how to dispose of your assets, but when it comes to assets, collections can be fairly problematic. After all, the reason it’s a “collection” is because the whole is worth something greater than the sum of its parts. You simply don’t have an unrelated list of items that you can just casually split up (or do you?). Kiplinger recently explored this challenge in an article titled “Leaving a Collection to Your Heirs.”
The fundamental question is this: what is your hope for your collection? Does the collection live on, and if so, under who’s watch? You might want the collection to stay together or to stay in the family for generations. This commonly is the case when the items are family relics or antiques. In addition, collectible assets can raise other vexing issues like possible taxation or even legal difficulties (an exotic gun collection, for example).
Another big issue to resolve is whether your heirs even want the collection? You might not want to take this one lightly. In fact, it might be wise to bring your heirs together to talk about it first. Who knows, you might have an heir who would love to begin enjoying your collection right now. This can bring a twofer. You get to watch them take over stewardship of the collection and you can share in the fun together.
Take a good look at the original article if you have a collection and really take to heart the difficulties that can arise. To get it right you’ll want to carefully enter these collections into your overall plan, and if the collection is an especially important or valuable one, then you will want to be sure to address it with the aid of competent counsel.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Kiplinger (April 2014) “Leaving a Collection to Your Heirs”