Creating an effective estate plan is a multi-part process, starting with taking an accounting of all of ones assets and setting goals and objectives for what those assets will do for the next generation. This can be a complicated first step, since most of us would rather not imagine what happens after our death. However, setting objectives is a helpful way to start crafting an estate plan since an experienced professional can help figure out what methods of asset transfer will be most effective in achieving those goals.
When an estate plan includes assets like a home, an art collection, antiques, or other items that you would like to keep in the family, it is important to have a conversation with the individuals who are set to receive those assets. The conversation can be difficult to start but it is one that must be had in order to set expectations and find out more about the priorities of the person who is receiving the gifts.
For example, in the case of an art collection, the person giving the collection might want all of the items to remain together and in the family. If the person who you intend to entrust with that task would prefer to sell the pieces or split them up among other relatives, then perhaps it is better to designate another beneficiary or to discuss loaning the collection to a museum or gallery instead.
These types of issues might seem like they are far off in the distant future and that putting a plan in place is not urgent, but with matters of estate planning it is better to be prepared for the unexpected.
Source: Wall Street Journal, “An Estate Plan to Protect an Art Collection,” Austin Kilham, Feb. 26, 2014.