When you first plan your estate, there are different things that you should consider. You want to make sure that you account for everything that you want to pass down.
Even if you don’t have a tremendous amount in assets, some of what you do have may be valuable and you should make sure that it is included in your estate plan appropriately.
Your estate planning should factor in taxes
When it comes to collectibles, some types are easier than others to pass down. For example, if you own artwork, there is a lot to consider when figuring it into your estate plan and it is essential that it is included in your estate plan in the right way. With some types of assets, it makes more sense to give them to a loved one or sell them while you are still around.
A good way to work collectibles into your estate plan is to keep appraisal, basis, and communication in mind. They encompass the following:
- Appraisal: Having our collectibles appraised will give you a solid idea about the gift tax that goes along with those items. Understanding the value of each of your collectibles will help you to decide who gets what or if you should sell those particular items.
- Basis: Your basis and the involved tax are also significant considerations when it comes to estate planning. If you should happen to sell some of your assets, the tax rate is something to think about (28%). Because of the high tax rate, you may want to reconsider whether you decide to sell those assets.
- Communication: Communication is key when it comes to estate planning. No matter what you have in your will, the collectibles are something else. With effective communication, it is important to have everything documented. An inventory of what you have is a great idea and you will want to let your heirs know about your intentions. That actually applies to all of your assets.
Solid legal support
Estate planning, no matter what you have, should be done sensibly and you will probably want to consult an estate attorney, who can give you sound advice so that your wishes are carried out and your heirs inherit what you wish for them without too much additional hassle.