Parents and grandparents in California may have no problem keeping track of how much cash they have or the value of their stock portfolio. However, it may be more difficult to keep track of how much an art collection is worth or to determine the fair value for other family heirlooms. Determining the value of a painting, sculpture or other tangible asset is important because it may help to determine how to best to insure it.
Knowing how much an item is worth can also make it easier to decide who gets the asset or how to otherwise incorporate it into an estate plan. Ideally, assets will be appraised by a professional from an accredited organization such as the American Society of Appraisers. Relying on online price guides or the words of the original seller is more likely to result in an inaccurate valuation.
If an asset is to be kept within the family, it may be a good idea to put it in a trust or an LLC. This may minimize any taxes that will need to be paid when the current owner passes on. Alternatively, the asset can be liquidated with the after-tax proceeds from the sale going directly to a beneficiary. Regardless of how an estate plan is constructed, it is generally a good idea for families to have regular conversations about it.
Individuals who own any type of assets may benefit from taking the estate planning process seriously. Working with an attorney may make it possible to learn about wills, trusts and beneficiary designations. It may also be possible to learn more about how to value assets and minimize taxes that may be owed when they are transferred. Professionals may also help to facilitate estate planning conversations between family members.