In many cases the most difficult aspect of conducting proper New York estate planning is ensuring that everything necessary is taken into account. Experienced New York estate planning lawyers usually know what options make the most sense in any given situation, but those plans are less effective if certain aspects of a community members' situation are not accounted for within the overall plan. Few individuals forget to discuss assets like bank accounts and real estate. Fewer take the time to conduct less common planning needs, such as ensuring proper business succession details are in place.
Another often overlooked planning area involves art and antique collections. Last week Wealth Management discussed some tips for art succession planning. The authors noted many families have considerable wealth invested in their antique or art collections, but many fail to take much planning care with these items. The articles notes that "Many don't realize the true value of their 'stuff,' thinking that the antique toy collection, family jewelry, or painting passed down by grandpa have no significant worth for which succession planning is essential." Often that idea is misguided. A new Social Welfare Institute study from researchers out of Boston College found that in a few decades inter-generational asset transfers will total $41 trillion, of which roughly 10-13% will be art and antiques.
Considering that sizeable sum, it is incumbent that these objects be properly accounted for in all estate plans. Failure to do so is a serious preparation mistake. Not accounting for these assets may result in significant tax liabilities. Also, without proper evaluation there may be large discrepancies in the asset allocation to heirs--with one child getting much more than another accidentally. Even worse, heirs may dispose of collectibles at rates much less than their actual worth if they do not suspect something is valuable and are not given any guidance on its worth.
To avoid these problems, residents should follow a few basic steps. For one thing, an up-to-date art and antique inventory is essential to start the planning. For more advanced collectors, specially designed software can be purchased to better keep track of these items. Also, all items should have a qualified appraisal and valuation. All purchase and sale records regarding these items should be maintained adequately. When meeting with an estate planning attorney, it is important to keep them aware of the extent and value of these collections. The advisors will be able to explain what strategies are most appropriate. For example, depending on long-term wishes, an irrevocable trust or charitable remainder trust might be logical options.
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