Take Inventory! Take Photos! Take Action!

Guest Blog, written by Karen Fisher, Professional Fiduciary, www.bishopfiduciary.com

Tangible personal property is one asset class many clients don’t spend a lot time managing during their lifetime.   With some thoughtful planning, potential problems can be averted when it comes time to settle their estates.

For example, in one particular estate, the decedent owned many books.  The books had not been appraised when the spouse died years earlier.  When the surviving spouse passed away the books were to be divided equally among the siblings, but they began to fight over them.  I invited a book appraiser to look at the collection. It turned out there were many books important to California history and worth 50 times the initial estimated valuation.

The siblings agreed to donate the books to libraries specializing in California history.  Had the client known of the significance of the books, she might have made a different decision in her estate plan, thereby reducing family turmoil during the estate settlement process. 

Not all personal property will turn out to have significant value.  As baby boomers begin to retire and downsize, there is a glut of used furniture and other household items.  Many thrift and consignment shops are at capacity. 

One way to actively manage tangible personal property is to take a current inventory and record it in a journal indicating the location of any items not on site (such as jewelry located in a safe deposit box at a financial institution).   When items are sold or gifted or, when additional items are purchased, the journal can be updated.  Keeping current on an inventory has several advantages.  One, it assists the client in decision making when they are preparing their Will or Trust.  They can readily view the journal and decide how they want to divide up their property.  Two, for clients who have already created their Trusts or Will, they can use the inventory to update their plans. 

After creating an inventory, consider obtaining an estate valuation of the value of the personal property.  Many people have an unrealistic idea of the value of their assets, either they assume a very high value, or they don’t realize the worth of some items.  An inventory and realistic valuation can assist in gifting decisions.  

As professional fiduciaries work with older clients, we can help reduce potential conflict later by taking inventory; taking photos with notes; and encouraging clients to take action by seek appraisals or indications of value from experts.