Estate Planning

Dr. Elizabeth Stewart is an appraiser with three decades of experience.

She is a certified member of the Appraiser’s Association of America, and the author of No Thanks Mom: The Top Ten Objects Your Kids Do NOT Want (and what to do with them).

Here is her list of the top 10 items your kids do not want to inherit and what to do with them:

Number 10: Books
Unless your grown children are professors, they probably don’t want your books. However, if you believe your books have value, contact a book antiquarian.

Number 9: Paper ephemera
Things like family snapshots, old greeting cards and postcards are called paper ephemera. Old photos are worthless unless they picture a celebrity or are linked with an important historical event. Old greeting cards are not valuable unless handmade by a famous artist or sent by a famous person. Take all your family snapshots and have them made into digital files.

Number 8: Steamer trunks, sewing machines, and film projectors
Steamer trunks from the 19th century are so abundant that they are not valuable, unless the maker is Louis Vuitton or some other famous luggage house. Old sewing machines are not valuable. Thrift stores are full of old projectors for home movies. Unless your family member was a professional and the item is top-notch, yours can go there as well.

Number 7: Porcelain figurine collections and Bradford Exchange ‘cabinet’ plates
These collections of frogs, bells, flowers, bees, trolls, Hummel’s, and Precious Moments have no market value. Find a retirement home that does a gift exchange at Christmas and donate the figurines. Collector’s plates will not sell anywhere to anyone. Donate these to a retirement village as well or to anyone who will take them.

Number 6: Silver-plated objects
Your grown children will not polish silver-plated items, and they are not valuable. The exception may be silver-plated items from Cristofle, Tiffany, Cartier, Asprey, and other manufacturers of note. The remedy is to give these items away.

Number 5: Heavy, dark, antique furniture
There is a good chance you will have to pay someone to take this furniture off your hands. Instead, Donate it and take a noncash charitable contribution using fair market valuation. Use reporting services such as P4A.com to find where this class of furniture sells.

Number 4: Persian rugs
The décor of the average millennial does not lend itself to a collection of multicolored (and sometimes threadbare) Persian rugs. The high-end market is still collecting in certain parts of the U.S., but unless the rug is rare, it is one of the hardest things to sell. Like antique furniture, it may be best to donate.

Number 3: Linens
Try giving your daughter five boxes of hand-embroidered pillowcases, guest towels, napkins, and table linens. She might not even own an ironing board, and she definitely doesn’t set that kind of table. You can donate linens to costume shops of theaters and deduct the donation. A site like P4a.com has auction results to establish the fair market value of such objects.

Number 2: Sterling silver flatware and crystal wine services
Unless the scrap value for silver is high enough for a meltdown, matching sets of sterling flatware are hard to sell because they rarely go for “antique” value. Formal entertaining is not a priority these days. Sterling must be hand-washed and dried. Same goes for crystal.

Sites like Replacements.com offer matching services for folks who DO enjoy silver flatware and have recognized patterns. Because they sell per piece, and therefore buy per piece, sellers get a rather good price. Unless your crystal is Lalique, Moser, Steuben, Baccara, or another great name, you will not be able to sell your “nice set.” Give “unknown maker” sets away, fast.

Number 1: Fine porcelain dinnerware
Your grown children may not want to store four sets of fancy porcelain dinnerware, and don’t see the glory in unpacking it once a year for a holiday or event.

Like silverware, china is something to consider for sale to a replacement matching service like Replacements.com. Know your pattern to get a quote from one. Because such replacement companies buy per piece, the aggregate of the selling price is always more than a bulk sale at a consignment store, which might be your only other option.

Reference: Elizabeth Stewart, 10 things your kids don’t want to inherit, Market Watch (March 17, 2018).

Recent changes to the Federal estate tax laws have greatly reduced the number of people who will be subject to the Federal estate tax. However, there still are many non-tax reasons to review and update your estate planning documents.

1. Transfer of assets: Your estate planning documents serve to communicate your intentions. They designate how your assets will be transferred – whether outright to your beneficiaries, to an existing trust, or into a new trust that will be created under the provisions of your will (testamentary trust). Testamentary trust provisions in the will also may specify when beneficiaries will receive assets. Wills also contain bequests of financial and non-financial assets (family heirlooms).

2. Management of your affairs: Upon one’s passing an estate is created. The manager of the estate is the executor or personal representative. The executor is responsible for accounting for your assets and liabilities, working with the courts, and disposing of your assets in accordance with your wishes. If trusts are created under your will, the trustee(s) you select will administer them.

3. Guardianship for children: If you have minor or disabled children, your will is the document that specifies your choice of a guardians. Depending on your circumstances, you may want to provide financially for the guardian you select.

4. Design of trusts: There are many types of trusts. They allow for control over assets through distributions. This control may be important when providing for children, a person with disabilities, a person with addiction or spendthrift issues, or a financially unsophisticated spouse. Trusts can also offer various degrees of protection from divorce and the claims of creditors and predators.

5. Medical and financial documents: Along with wills and trusts, there are other documents that are important to the estate planning process, such as the health care power of attorney, health care directives (Living Will) and a general durable power of attorney over financial matters.

6. Tax planning: In the past, estate planners heavily focused on the titling of assets to avoid the Federal estate tax. Recent changes to the Federal estate tax laws have greatly reduced the number of people who will be subject to the Federal estate tax. However, many states have estate tax provisions that differ from the Federal tax laws. Accordingly, one may have a federally exempt estate that still carries a significant state tax. There are other tax provisions that require a review of existing estate documents.

7. Gifting: Gifting provides many tax savings opportunities, but can also create complications from the impact of the gifts on the recipient. Careful consideration should be made as to timing and whether gifts are made outright or in trust.

Although recent changes to the Federal estate tax laws have greatly reduced or eliminated the potential estate tax liability for many, it has not reduced the need for thoughtful estate planning.

Reference: Forbes (March 15, 2018) “7 Reasons To Review Your Estate Plan, Trump Tax Law Aside.”

Your estate is comprised of the assets you own. It includes your home, car, bank accounts, investments, life insurance, furniture and personal belongings.
 
A basic estate plan has two major components: (1) an incapacity plan, and (2) a wealth transfer plan. The incapacity plan goes into effect if you are ever unable to manage your own affairs, due to illness or injury. The wealth transfer plan goes into effect after you pass away. It transfers your property to your loved ones.
 
Incapacity Plan
 
A well-prepared estate plan provides detailed instructions for your care and the management of your assets if you ever become incapacitated, even for a short time, due to illness or injury. If you become incapacitated without the proper documents in place, your family will have to go to the probate court for permission to manage your assets. They will also have to get court permission to make medical decisions for you, if you are unable to speak for yourself. The process is costly and time-consuming, making an already difficult situation even more stressful for your family.
 
Wealth Transfer Plan
 
No matter how large or how small your estate is, you can’t take it with you when you pass away. You probably want certain people to have the property you now own. To make sure that happens, you need to provide written instructions. Your instructions should clearly outline who should receive your property, what you want them to receive, and when they are to receive it. State laws, which take over in the absence of estate planning, often distribute assets in an undesirable way.
 
Estate planning is especially important for those with young children. If you have young children, you will need to name someone to care for them, and to manage their inheritance. You will probably also want to provide detailed instructions regarding their care.
 
It may surprise you to know that having an estate plan in place often means more to families with modest means. This is because they are less able to afford the court costs and legal fees that result from not having an estate plan in place.
 
If you have questions about estate planning, please contact my office.
 

If you have a living trust, you might wonder who would manage your trust property if you were ever incapacitated by an illness or injury, or if you suddenly passed away.
 
If you have a living trust, and you and your spouse are co-trustees, either can act and have instant control if one of you becomes incapacitated or passes away.
 
If something happens to both of you, or if you are the only trustee, the successor trustee you personally selected will step in. If a corporate trustee is already your trustee or co-trustee, they will continue to manage your trust for you.
 
If you become incapacitated, your successor trustee looks after your care and manages your financial affairs for as long as needed, using your assets to pay your expenses. If you recover, you resume control. When you die, your successor trustee pays your debts, files your tax returns and distributes your assets. All can be done quickly and privately, according to instructions in your trust, without court interference.
 
Successor trustees can be individuals (adult children, other relatives, or trusted friends) and/or a corporate trustee. If you choose an individual, you should also name some additional successors in case your first choice is unable to act.
 
If you have questions about living trusts, please contact my office.