Estate Planning Strategies for Expensive Hobbies and Collections
When many people think of their assets, they tend to include cars, homes, and money. Many people overlook collections of art, toys, sports cards, and furniture. These collections may seem like trivial hobbies to most people, but many collections have significant value attached to them. It is not uncommon for antiques and artwork to be valued at thousands of dollars or more.
This is why expensive hobbies and collections often need to go through the estate planning process. You want to specify what will happen to your collections after you die. Do you want to give it to one person or split it among multiple heirs? Do you want to donate it to charity? There are many options to consider, so it is a good idea to make sure your wishes are known.
Celebrities With Expensive Hobbies
Many celebrities have expensive hobbies that could be protected with proper estate planning. For example, singer Rod Stewart is passionate about model trains. His set measures 23 feet wide by 124 feet long and features more than 100 buildings.
Leonardo DiCaprio has a collection of rare action figures. He has already sold some of his figures to raise money for charity. Angelina Jolie has been collecting antique daggers since she was 12 years old. Tom Hanks has a large collection of vintage typewriters.
What to do With Your Collectibles
The IRS defines collectibles as antiques, rugs, works of art, most metals and gems, stamps, coins, valuable alcoholic beverages and other forms of tangible personal property. There are generally two ways to distribute collectibles – they can be left to heirs or donated to charity. In either case, tax and estate laws apply. If there is an estate tax, the executor must pay it within nine months of the decedent’s death. This may not be enough time to sell the collectibles.
There are two main issues with collectibles – obtaining a proper value and selling them. Not many heirs want their family members’ collectibles. Therefore, they choose to sell them, but finding a buyer for a rare item is not easy. For many, their only option is to use an auction house, which comes with fees.
Valuation is an issue because an heir, in desperate need of money, may try to sell an item for far less than it is really worth. Plus, a collector may find an item to be worth more than it really is due to its sentimental value. That is why it is a good idea for the collector to find an appraiser and get a true value of the collectibles.
Contact an Estate Planning Lawyer Today
Wills and estate planning are not just for rich people. Many people overlook their expensive collections and hobbies in their estate planning. However, this can lead to tax issues and cause your items to be sold or left to someone who does not want them.
If you have expensive hobbies and collections, it is important that your wishes be known in the event of your death. This allows your beneficiaries to get the right value for your items. Brooklyn estate planning lawyer Theodore Alatsas ESQ can make sure your estate planning needs are met. Schedule a free consultation by calling (718) 233-2903.