The “stuff” of an estate – Part 4
Discussing how to deal with items of both high sentimental value as well as high dollar value
Welcome to the fourth of a series about the “stuff” of your estate.
My pace has been glacial. I’ve gotten only so far as to discuss the allocation of items of sentimental value and whether those allocations should be incorporated into your will using a codicil.
One loose end question I posed at the end of my last column: “What if an item of high sentimental value also happens to have high dollar value?”
Allocating the low value sentimental items will have no impact on achieving an equal division of the estate because they don’t amount to much.
But what about the mid-sized grand piano that each of the children learned to play on, with a used retail value of $15,000.00? Or the classic sports car that’s been in the family for two generations, valued in the $35,000.00 range?
If not for sentimental value, these items would be dealt with just like everything else. The executor would offer each item to beneficiaries at market value, having a mini-auction between competing beneficiaries if necessary. If nobody wants an item at fair value it is sold with the proceeds added to the estate for equal distribution.
One way to handle items of high sentimental as well as high dollar value is to focus solely on sentimental value when wrestling with the allocations.
And then sort out the dollars and cents.
An easy answer is that if you end up with a high value item, its value counts toward your share of the estate.
Easy but not necessarily satisfactory. The intention is to preserve and care for the item, not to sell it.
In fact, rather than being a financial benefit, it will be a financial burden to keep the car and the piano tuned up and in good condition. Not to mention having a property or home big enough to house them.
Maybe an opposite solution makes more sense, with an additional portion of the estate going to the child willing to preserve what has become a family heirloom.
We’re moving from “who gets what” to creating future obligations.
Leaving aside what your children want for a moment, it might be important to you that the classic sports car, or piano, be kept in the family to be enjoyed by future generations.
You might want conditions imposed on their ongoing ownership:
- A restriction against selling it,
- An obligation to maintain it, and
- If you’re not actively using it, that it be offered to a member of the family who will use it.
That might seem like a lovely idea, but it’s easy to foresee scenarios where these items transition from beloved heirlooms to expensive burdens.
The goal is to achieve an outcome where the “stuff” of your estate won’t cause hurt feelings. Or worse, damage relationships. I suggest that we can best achieve that goal by engaging in thoughtful discussions to achieve consensus while we’re alive.
Whatever the consensus, ensure that it’s very clearly set out in writing.
The higher the dollar value of the items, the further the needle points in the direction of having the allocations and dollars and cents impacts on the estate formalized in a codicil to your will.
If you choose to go the direction of a family heirloom being kept in the family to be enjoyed by future generations, I recommend a consultation with an estate planning lawyer for advice about how to properly firm that up. Imposing conditions on the receipt of an item, and having those conditions extend to a future beneficiary, isn’t a “do-it-yourself” project.
Why firm this up? You and your children’s very genuine intentions might not be shared by someone down the line who ends up in possession and could use the proceeds of a sale!
I had planned on continuing with this series for at least another week, but my wife’s feedback was “the topic is getting a little old”. I’m going to leave it up to you to decide – e-mail me to let me know whether it’s time for me to move on!
