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Including Collectibles in Your Estate Plan
Collecting art, memorabilia, fine wine or other items is a hobby enjoyed by many, but not always something individuals consider when developing their estate plan. Just like any other asset, collectibles should be accounted for within your estate plan. Here, Baltimore estate planning attorney Mary Rose E. Cook details key information about estate planning as it pertains to collectibles.
What is Considered to be a “Collectible?”
The Internal Revenue Service (IRS) has a specific definition for collectibles. Collectibles are considered to be artwork, antiques, rugs, metals or gems (with exceptions), stamps or coins (with exceptions), valuable alcoholic beverages or, “any other tangible personal property that the IRS determines is a “collectible” under IRC Section 408(m).” Because collectibles are considered personal property, you may either leave collectibles to your heirs or donate them to a charity, museum or other organization.
Why is Valuation of Collectibles So Important?
Having a valuation completed for your collectibles will help you better shape your estate plan, determine the most effective estate planning strategies and prevent future disputes between heirs. An accurate valuation will also help you to develop a precise value for the entirety of your estate. Additionally, upon your passing, your estate executor will need to report the valuation for tangible personal property on the estate’s Schedule F (Form 706)—failure to do so may trigger an audit by the IRS.
How Should I Account for Collectibles in My Estate Plan?
By preparing prior to your passing, you can help to alleviate the risk of conflict upon the execution of your estate plan. Keep accurate records of your collectibles, including the purchase date, price, appraisals, damages, insurance coverages and cost of any improvements such as refurbishment or repairs. With this information, keep previous valuations, as well as the contact information for the experts who performed the valuation. Discuss your collectibles with your heirs and determine who wishes to receive which items. Using the valuations you have received, attempt to create an equal division of your collectibles and other assets to prevent disputes upon your passing. Once you have determined who should receive what, include language within your estate plan that accounts for the cost of shipping and storing collectible items.
Talk to a Baltimore Estate Planning Attorney About Estate Planning for Your Collectibles
It is imperative to have a valuation of your collectible items completed as preparation prior to your passing. The most important step you can take to account for your collectibles, however, is to speak with a qualified estate planning attorney, such as one of the Baltimore estate planning attorneys at Adelberg Rudow, who can help you to protect and account for your collectibles within your estate plan. Estate planning attorney Mary Rose E. Cook has years of experience assisting her clients in the estate planning process, ensuring that their collectibles and other assets are safeguarded and distributed in the proper manner. To learn more about how Adelberg Rudow attorney Mary Rose E. Cook can assist you with your estate planning needs, contact Adelberg Rudow today.