hysical assets, especially those with sentimental value, often lead to family disputes. While rare collectibles can be contentious, even everyday household items can spark disagreements due to their emotional significance. For instance, dividing a single thing, like a mother’s wedding ring, among three children can be challenging. Moreover, determining the value of such items, like jewelry and antiques, can take time.
Many people overvalue these assets, leading to unrealistic expectations. While jewelry might be costly to purchase, its resale value can plummet. Conversely, some items, like designer clothing, might surprise you with their worth. It’s advisable to plan the distribution of such assets to avoid disputes.
Ensuring Your Legacy is Valued
Nobody wants their heirs to feel burdened. To ensure your assets are appreciated, open communication is critical. Reich suggests discussing potential inheritances with beneficiaries. Often, heirs might prefer not to inherit certain items. In such cases, selling the asset while still alive might be the best option.
Dungey recommends that if an asset is to be sold, it should be done posthumously to benefit from tax advantages. She also emphasizes the importance of accurate appraisals for estate tax purposes. She suggests leaving a letter of wishes to guide beneficiaries.
The Real Value of Assets
It’s essential to understand that the value of an asset can vary. Estate values, insurance values, and sentimental values can differ significantly. A non-cash investment might have a different practical value than its cash equivalent. Executors should seek appraisals from experienced professionals to determine the asset’s worth.
Unwanted Inheritances: What’s Next?
Inheriting unwanted assets can be a burden. You might feel stuck, whether it’s a timeshare you’ll never use, a historical firearm, or a grand piano that doesn’t fit in your apartment. However, beneficiaries can refuse or “disclaim” an inheritance. While this can create challenges for the estate’s executor, a well-drafted will can provide solutions. Dungey mentions that a comprehensive choice should empower the executor to abandon any estate property if necessary.
Selling or Donating Inherited Assets
If you’re looking to offload an inherited asset, several avenues exist. Reich suggests donating unwanted property or collectibles. Selling to a dealer, especially for collections, can be viable. While the offer might be below retail value, it eliminates the hassle of individual sales.
The Bottom Line
Inheritance can be a blessing or a burden. Open communication, proper planning, and understanding of the actual value of assets can ensure that the legacy left behind is cherished and not regretted.