With the hustle and bustle of daily life, it is sometimes easy to overlook that many aspects of estate planning, while not only pro-active, can be a valuable comfort for a family's future generations. Assets belonging to clients come in all shapes and sizes, such as investments, real estate, jewelry and other tangible personal property. The way to protect those valuables for the future differs depending on exactly what they are.
For personal property, including collections of art or collectibles amassed over a lifetime as well as family heirlooms handed down from generation to generation, the best way to protect those assets is to make sure they are properly insured in case of a loss. But how can you insure what you don't know the exact value of?
That's when a qualified personal property appraiser can become a key partner for your clients. A personal property appraiser will provide a thoroughly researched, accurate and up-to-date appraisal of your clients possessions so they can feel comfortable knowing exactly what their tangible assets are, and more importantly, that they are protected for the future. It's key to for clients to talk to children about what personal property (i.e., furniture, art, jewelry, collectibles) they want to receive. In many cases, the single most consistent point of estate conflict is not the cash, securities, or real estate, but personal property – that grandfather clock or piece of jewelry or artwork.
Once parents and children have made their choices, and sometimes even before the subject of family distribution is brought up, it's an ideal time to have a qualified appraiser prepare a detailed appraisal report of these collections and heirlooms to assist the family in this process. Conversely, children or heirs may not want a valuable collection because it doesn't “fit into their lifestyle”, or it really only had meaning to the original owner. In that case, the collection may be may donated to a museum or educational institution. For donations of that magnitude, the IRS also requires a written appraisal report from a qualified appraiser.
This type of documentation is particularly important for second marriages. A will might say “I pass all of my personal property to my children” who are from a prior marriage. But because most personal property does not have any title documents evidencing ownership, a surviving spouse may claim the assets as his or her own. Which then brings us to the question - what makes a good appraisal report? According to the International Society of Appraisers, the answer is multi-fold:
The fine and decorative arts collector who is looking to have his collection appraised should consider how an appraiser represents his or her credentials. A good appraiser should:
Gabrielle Goodman, ISA AM, has been a qualified appraiser for over 15 years, and is the owner of Cleveland Appraisal Consultants (CAC).