When planning their estates, most people focus on major assets, such as business interests, real estate, investments and retirement plans. But it’s also important to “sweat the small stuff” — tangible personal property.
Examples include automobiles, jewelry, clothing, antiques, furniture, artwork, photographs, music collections, personal papers, collectibles (such as stamps, coins or baseball cards) and mementos.Ironically, these personal items — which often have modest monetary value but significant sentimental value — may be more difficult to deal with, and more likely to result in disputes, than big-ticket items.
Distributing $4 million in stock or other liquid assets among your children is relatively straightforward. But dividing a few thousand dollars worth of personal items accumulated over a lifetime is another story. Squabbling over these items can lead to emotionally charged disputes and even litigation. In some cases, the legal fees and court costs can eclipse the monetary value of the property itself.
As you plan your estate, don’t overlook tangible personal property. The dollar value of these items may be relatively low, but their emotional value demands careful planning to avoid hurt feelings, misunderstandings and disputes.