Estate Planning Tips for Personal Property
1. Collect and assemble as much background information as possible on each piece of property, including sales receipts, details of how you acquired each piece and the provenance or history of the piece.
2. Make sure you include an appraisal consultation with an accredited appraiser like those belonging to the American Society of Appraisers in your estate planning process.
3. Question whether the appraiser will provide a report that gives a fair market value of your collection that complies with the latest Internal Revenue Service requirements. (Replacement value for insurance is not appropriate for estate planning purposes and can yield a considerably different value.) Hiring an accredited appraiser will ensure that you get the correct value for your properties.
4. Review your property with the appraiser. Together you can decide what property should be included in the appraisal report.
5. Keep your appraisal report with your other legal, estate planning documents. Appraisal reports are recognized by courts as reliable testimony to the worth of your possessions. They combine in one place the documentation, identification (including photographs) and fair market value of your possessions that can be invaluable to you and your heirs.
6. A rule of thumb is to have your appraisal updated about every five years. An appraisal is an unbiased opinion of value at the time the report is done. Because market conditions change, an accredited appraiser cannot determine what your possessions might be worth at some point in the future or at the time of your death. An appraisal update, which usually costs less than the original report, will verify the condition of your collection and keep values current.
7. Monitor market conditions that might affect the value of your collection. A sudden surge in popularity of a particular period (e.g., Victoriana) or the death of the artist who painted items in your collection could cause certain values to increase rapidly and might merit appraisal updates at more frequent intervals.
8. Discuss with the appraiser appropriate care of your collection to maintain maximum value. Accredited appraisers are personal property experts who can provide you with advice on ways to protect your collections.
9. Hire only accredited appraisers like those from the American Society of Appraisers who abide by a code of ethics and the Uniform Standards of Professional Appraisal Practice (USPAP).
10. Make sure you deal only with an appraiser who charges an hourly rate or a flat fee. Reputable professional appraisers will not offer to sell your items for you or base fees on a percentage of an item’s worth.