Plan for the Inevitable: Part 4 of 4
Posted on October 4, 2014 by bob in MoneyWise
Through the years you have likely accumulated lots of stuff which now fills your home. Some of your possessions have clear economic value, while others have sentimental value for your family. With regard to estate planning, categorizing these as “financial assets” (those with purely economic value) and “legacy assets” (those with nostalgic value, regardless of their economic worth) can be helpful. You need a fair and rational plan to disburse both types of assets to your heirs.
There is also, in all likelihood, a third category of items you possess: These are the things that have little if any economic value, and while they have sentimental meaning for you, they have no emotional connection for your heirs. Examples may include:
— Photos of people, places, events and things long ago with whom your heirs have no real connection.
The columnist’s maternal
grandparents, his mother
seated on her father’s knee.
— Old books you have kept because of some personal connection – school books, class yearbooks, directories, etc.
— Clothing worn on special occasions – your grandmother’s baptismal gown, your mother’s wedding dress, your letter sweater from high school.
— Souvenirs & memorabilia from trips or events – the dried flower from your high school prom, cards from teenage sweethearts, the snow globe from your trip to Niagara Falls.
As hard as it is for you to deal with this accumulation of stuff, leaving it to your heirs to sort out will create an additional burden for them. Here are some things that you can do, hard as it may be, that will help them and perhaps you, too.
First, discuss with your children (and grandchildren if they are old enough) what interest they have in this stuff and what they think you should do with it. Many people of our generation have learned that our children have much less sentimental attachment to such items than we do. It is better for you to deal with items during your lifetime that they do not want rather than to dump it on them.
Second, for those things that no one in your family wants after you are gone, determine what economic value they have. The Antiques Roadshow is a constant reminder that some items have economic value beyond what people realize. You do not want to destroy a valuable heirloom or give it away just because no one in the next generation of your family is interested. You may need professional help (appraisals) with some of this, but in other cases, simply finding it a good home (sell it/donate it/ pass it along to an individual) or pitching it is in order.
Third, if your children live close enough by and are willing, let them help you sort through and decide on some items. This could provide an opportunity to pass along family stories that they will value later, even if they do not today. But if they seem uninterested, it is probably best not to press the issue.
Fourth, carefully label and provide provenance for items that you keep for your heirs. This is particularly helpful with pictures. I have recently been going through old photos from my parents, some of which they inherited from their parents. Those which my Mother annotated provide much more pleasure today, and have much more value in the family archives, than those I have to guess at. Some, which are clearly labeled and 90-110 years old, are likely the only copies in existence, and I am providing copies to cousins who want them.
In my view, one of God’s greatest gifts is the ability to remember fondly the loving people and notable events of our past. It is a great compensation as people age. Possessions that trigger such memories have value for those with the connection to those people and events. Don’t be surprised or offended if your heirs, who lack the connection, do not share your emotional response.
Alan Wallace
Alan Wallace, CFA, ChFC, CLU is a Senior Financial Advisor for Ronald Blue & Co.’s Montgomery office, www.ronblue.com/location-al. He can be reached at 334-270-5960, or by e-mail at alan.wallace@ronblue.com.
