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Division Of Assets – Collections And Estate Planning

Division of Assets – Collections and Estate Planning

Whether you collect first-edition books or sports memorabilia, you’ve likely put significant time, effort, and money into the items you’ve accumulated over time. Regardless of what they’re worth, it’s not unusual for you to want the items go to someone who will appreciate them either while you’re living or after your death. But you don’t want the types of surprises that happen on television. Instead, clear communication and a game plan can help you avoid conflict and misunderstandings about your collection when it comes to division of assets.

In a previous blog, we wrote about the importance of family involvement with your collection. To ensure an orderly transition and minimize family conflict, it is imperative to prepare detailed written instructions on how your collection should be divided among your heirs. Your overall financial picture is important to consider, particularly if your collection has substantial value and could have tax or estate planning considerations.

Even if the collection is relatively small, detailed instructions will ensure that your family is clear about your wishes. The sentimental value of your collection could be huge, even if the collection is just a fraction of your actual estate value. And when it comes to how you divide your collection for transfer, you have several options.

Equally Divide the Collection Among Your Heirs

At first, dividing up your collection and giving each family member an equal share might seem like the most logical and straightforward option. Unfortunately, it can also be the most burdensome as it will require that you regularly assess and designate exactly which pieces go to each heir. If you do not do so, fluctuations in each items’ value may result in those “equal shares” having great differences in worth.  

This might be important to you if your goal is to equally distribute the collection by value (i.e., an equitable distribution). It might not be as important if you are interested in dividing the collection by sentiment or other factors (i.e., a strategic distribution). In a strategic distribution, you may divide the collection based on how family members feel about the collection or their ability to maintain it. For example, one family member may have great attachment to a particular piece of the collection, regardless of its value. Such sentiment may play into your decision. In other cases, a family member may have a challenging financial situation and be tempted to sell the property. In such cases, you may choose to structure your estate to protect the items from such disposition.

Leaving the Collection to One Heir

Choosing one heir to receive the collection is often the simplest solution. However, it might only be appropriate if that heir wants to continue the collection. If you choose this option and there are multiple family members, it’s usually a good idea to help them understand why you made the decision to leave it to one person to avoid hard feelings. If equitable division of the overall estate is important to you, you can have the collection appraised and make appropriate adjustments to your estate plan so other relatives receive greater proportions of other assets to make up the difference.

Dispose of the Collection

Depending on your situation, the best option for you and your family may be to sell the entire collection so that your heirs inherit the monetary proceeds. However, this option also brings up many additional questions. For example, should you sell all or most of the collection now, or direct your collection to be sold as part of your estate plan?  Are you interested in donating any of your pieces? Make those arrangements with the recipient as part of your estate plan, as well.

There may be important tax, estate, and family dynamic implications to these decisions, which are unique to every collector. Discussing your collection with your RegentAtlantic Wealth Advisor and other trusted professionals can help you evaluate the best decisions for you.

If I may answer any questions about your collection concerns, please contact me at mmignon@regentatlantic.com.


Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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