Preparing your estate

I recently helped appraise a collection of coins that was discovered in a safe in a storage unit that someone purchased at auction. There were several coins in the lot worth >$1,000 each, and it made me sad that the collectors family didn't receive the benefit of his good taste and investment.

So, I resolved to prepare a presentation for my club (the Dallas Coin Club) about estate planning and inheritance issues. I'm looking for input about what should be in the presentation & would appreciate your help.

Here are some of the topics I'm planning so far:
1) Preparing an inventory of your collection (with provenance or at least a general ballpark of how much you paid for each item / an estimate of it's value). The inventory should include locations & details necessary to access materials (ie; safety deposit number or safe combo). Obviously, this is something that should be very well protected & only given to someone that you trust completely.

2) A will, with any particular items & their inheritors spelled out, or a percentage assigned to heirs. Also, you may want to consider assigning inheritance von stirpes (in case a particular relative passes away between updates to the will, this would dictate that their branch of the family inherits their share). This would also be a great time to name someone to handle the disposition of assets (ie; a particular auction house or estate lawyer & to fill out paperwork setting up that in advance), and set out bequests to charitable organizations (such as your coin club!). You can set this up to be a public spectacle (everyone finds out what everyone else got) or a private matter (each person is contacted individually).

3) A list of people who you trust to make fair offers or appraisals on items. This might be trusted coin dealers who you have bought from in the past or fellow collectors.

4) Tax details on items. (I need to check on particulars, but I think you can give up to $10,000 $14,000 a year to family members tax free). So, if you plan on passing along $25,000 of coins to one person, you might write out an attestation that you gave them $8,000 in 2010, $8,000 in 2011, and $9,000 in 2012 but kept the items in your vault for safekeeping.

5) Special details about items that you want future owners to know. Ie; the original packaging is in a box in the attic labeled 'Coin Packages' OR 'This was purchased on my honeymoon, while my wife was sleeping off 3x Mai Tai's' or 'This coin was never monetized by the mint & may not be legal to own... watch out for the SS & be circumspect if you decide to sell it'.

6) ???

What else should be part of this presentation? All suggestions welcome.

 

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I've already prepared, I had a son. Now I just have to trust him not to spend it all on video games.

 

What were some of the steps you took in preparation?

 

You should have a statement, either refuting any future claims by anyone that certain items were promised to them by you, or that the items were part of any pre-existing monetary deal, as well as a list of items you wish to go to certain individuals. When I handled my mothers passing, there were 3 relatives who claimed she promised them her antique dresser, and since she was 98 she probably had

 

I found out the annual gift limits are $14k per recipient. Also, there's a lifetime gift limit of $5.34 million (which I can only dream of ever bumping up against).

Also, I apologize for poor wording (I was pretty much brainstorming a presentation as I wrote). On #4 - I meant you should give those amounts each year, with a written attestation that the amounts were given each year so that your heirs don't have any problems with the IRS or in-fighting between each other. Lying about such gifts (which what I wrote could be read to suggest) would be tax fraud & not the best way to prepare your heirs.

Over-the-limit inheritances can incur taxes, so my point was that planning should include a way to minimize tax exposure. If you work it out with the recipient then that shouldn't be a problem because they wont make mistakes on their tax returns.

Here's how I would arrange it (for the size of collection I'm likely to have) - I would let my son know that I'm giving him a gift (say, in a Christmas card) that he must agree not to sell until after my death & that he must lend back to me for safekeeping. I think that would be a great way to get him started on appreciating coins that are his/ours, and to at least let him know what is in my safe before he has to unravel things on his own.

For larger estates, it might make more sense to set up a trust in inheritors names that the donations are made to (with you as the executor of the trust).

 

Heritage Auctions, also based out of Dallas, has an entire booklet devoted entirely to this subject. They send it out for free though I think it has a cover price of something like $14.

 

This is a good thread. Most people don't think about these types of things until it's too late, or after its too late when family is squabbling over things instead of celebrating that person's life.

I would also have something in there not only for a person's passing, but planning for their estate should they need long term medical care or a nursing home. There's a whole different set of laws and things that cover that, and these days I believe this may be even more important to consider than simply just keeling over from a heart attack. I've gone through it, and it is no fun in the least.

On the gifting front, I would urge that you tell them to check local Medicaid law for the above situation. Different states have different rules on how far back they can go to find assets, and what the limits per transaction are, and gifts certainly count against it. If it's too soon between the gift and the time they need a home, the state will look to recover those assets to go towards medical bills/nursing home costs. The person receiving the gift would be on the hook for either giving it back to be sold, or paying the "replacement cost" of said objects back.

Here in NJ it's 5 years look-back. While they focus on primarily monetary transactions from your banks/investments, they do take personal belongings into consideration as total assets. Say for some reason they see you spent $1500 on an item, they're going to want to know what it was, and if you don't tell them they will automatically consider it an asset and charge it against you.

I can tell tales for pages and hours, so if you want feel free to PM me with any questions.

 

A good start, but a trust is much more reliable (and secret, as it does not pass through probate, at least in Ohio).

Also, "...that he must agree not to sell until after my death & that he must lend back to me for safekeeping..." This is not enforceable.

One final problem, the handling of junk silver (bullion) whose price fluctuates daily. If there's an estate lawyer in your coin club, encourage him to speak on the subject. The point about giving inheritances to Medicaid-eligibles is critical; it can screw up EVERYTHING you've planned for.

 

I would recommend Beth Deisher's Cash In Your Coins: Selling The Rare Coins You've Inherited.

I wrote a review of the book if you'd care to see it, I think the book covers some really good advice for people for non-collectors, which is oftentimes who the heirs of collections turn out to be.

http://coinshowradio.com/Cash_In_Your_Coins.html

 

Gots a whole bunch of notes written in that volume Mike. Now if the horse can be lead to water........

 

Being of sound mind and body I sold all my coins and spent all the money having a blast.

 

Eddie? You're my hero......

 

I'd like to finish the presentation with a coin related quotation. Anyone know a good one?

I'm looking for something that encapsulates the idea that we're only temporary curators of these little works of art & it's only in our power to carry them partway on their journey.

The only topical quote I've found so far is:
“Between the dark lakes where the dark rivers flow, there is no ferry waiting on the shore of rock, and no man holding a long oar, ready to take your last coin.”
-William Collins

 

I've made a rough draft of the presentation, in powerpoint. I used quite a few pictures from online to illustrate points that I make no copyright claim to whatsoever.

I'm not sure how to upload a ppt here, so I posted it to a website I'm building. The link isn't working yet because DNS hasn't updated yet, but it should be active in the next couple of days:
www.telemarketerbully.com/estateplanning.pptx

 

Should be working now. I'd appreciate any and all feedback.

 

I just checked out your powerpoint. I guess the information was in your ORAL presentation of the powerpoint, because I learned pretty much nada looking through it. Makes me feel like I'm at work, watching yet another presentation from one of my company's administrators. Perhaps I missed something?

And what's the title of that Heritage Auctions publication?

 

Cheers.