A vacation home, classic car, great-grandmother’s brooch, beautiful and rare objects d’art – every wealthy family has assembled an array of cherished, valuable and unique assets.
Many are hard assets – singular in that they cannot be divided among the heirs. From an estate planning perspective, how should we manage the disbursement of these possessions?
By comparison, it’s relatively easy to divide up cash, securities and other forms of liquid wealth. Dealing with hard assets can be fraught with difficulties. Families are often lax in maintaining a proper inventory and talks about who-gets-what tend to be informal. This could lead to confusion, hurt feelings and even legal trouble after the will is read.
The solution is well known: the principles, their financial advisors and the key heirs need to immediately open communication lines. In the case of art and other unique items, an outside appraiser may need to be employed.
In some cases, interesting conversations will ensue about family history (who was that Frenchman who presented Grandmama with that brooch, anyway?). The advisor may think these matters fall outside the bounds of their usual brief. In fact, such interchanges often help bring family members together, a process that can facilitate the entire estate-planning process.
Fair market values must be determined for each piece under consideration. Recall the shifting sands of value in the worlds of art, jewelry, real estate and other hard assets. Old notions of value may be outdated. These values will help the client fairly apportion the objects and allow the family accountant to keep everything straight and clear.
For more information, please read:
Estate Planning Answers for ‘Hard’ Assets Like Art, Heirlooms | Kiplinger