Estate Planning for Personal Possessions
I am frequently asked about how to handle all the personal possessions a loved one has accumulated over the years. It is not uncommon to hear that a loved one "kept everything" dating back decades and now the family is at a loss of how to even begin to deal with all the stuff. Most people unfortunately spend years accumulating personal property - some of which can be quite valuable - with little thought given to what will happen to it after they die. As expected, addressing the issue beforehand can alleviate a lot of work, confusion and potential hard feelings. Here are a few steps that a loved one can take to avoid saddling their heirs with such a burden:
Throw out the junk. Much of what is accumulated over the years should be discarded. There is no reason, for example, to keep forty years of bank statements, tax returns, receipts, cancelled checks or other outdated documents. The sooner such items are thrown out, the better for everyone.
Donate the good stuff. Unless a loved one would like your old dishes, clothing, furniture, tools or other possessions, why not donate these items to a local church or charity like Goodwill or the Salvation Army? Not only can you eliminate unwanted possessions, but the donor can claim a tax deduction.
Pass it on. If a loved one has valuables and would like to see them inherited (rather than sold off), make sure to specify - in writing - who is to receive them. It is also a good idea to find out if the person is even interested in the items. It may even be preferred for the donor to give the collectible away while he or she is still alive. Antiques, jewelry or other collectibles are wonderful items to pass on if done correctly. Taking just a few simple steps can help avoid unnecessary problems.
Sell it. If no one wants a certain collectible and you prefer not to donate it, why not reap the financial reward of selling it? A gun collection, for example, may not be desired by any family member. Since you may be most familiar with the market value for your collectible, it would be best for you to sell it. Don't however overlook the potential capital gains taxes on the sale.
This blog post is written by Brett A. Howell, Certified Elder Law Attorney. The blog is written as a service of The Elder and Estate Planning Law Firm, P.L.L.C. This information is for general informational purposes only and does not constitute legal advice. For a consultation to address specific questions, please call (810) 953-3846.