Estate planning?

[danbrew]

So I'm updating the will and am thinking about the best way to provide a value on my gun collection. Since I'm not planning on dropping dead tomorrow, I want to somehow put in place a process to best determine the value of my gun collection instead of just saying "the value of these (today) is x".

There's the trusted friend route - you know, where the trusted friend comes over and helps the grieving widow out. Of course the trusted friend may also kick the bucket. Or marry the grieving widow and get all the guns for free.

Then there's the trusted dealer route. "Dear Wife, call one of these three guys to come over and help you value the collection."

Then there's the "The minimum value of these guns at collection are x."

And finally, "The value of this one is x, the value of that one is y, etc."

While I might think that my wife and kids might like the guns, they also might want just some of them and cash for the rest. The collection is large enough to where I think it unlikely anybody but me (or one of you) would want it.

So... if you've thought about this, what are your plans?

 

[Kingcreek]

the executor of the estate, in our case the surviving spouse and then a daughter, can do whatever they want with them. a few of them are listed to be transfered to named family members upon my passing if I haven't already gifted them. The market value is not important to the legal will but it could be helpful to the executor. Our will refers to a list of assets with instructions for disbursment. The list includes some guns, family heirlooms, etc and is in our file at the attorney's office, a copy in the safe at home, and a copy with the daughter out of state, and it can be updated or changed easily at any time without re-writing the will. I have a paper file in addition to a photo record and spread sheet with descriptions on CDs for the 3 files. I also hope I am around for a long time before any of this is needed.

 

[hardluk1]

If you have much to devide up or protect your spouse or family from try'n to take or claim something you could have a revocable trust set up to protect your spouse or children.

 

[sneedb82]

Your guns are considered personal property. Depending on where you live, personal property along with real property are appraised by independent third party appraisers approved by the Probate court (you can choose them usually, again, depending on the state/county), upon which they will determine a real appraised value to assess to the value of your estate. That will create the basis (us Accountants and Financial Advisors call it a "stepped up basis" because it is a new basis for the individual or individuals inheriting it above or below original cost to the decedent).

Once this occurs, and a stepped up basis is applied to the guns, then the transfer can commence. If they are sold or transferred to an individual at the basis, then that's their basis as well. However, if it's sold at above the basis, just like any investment, it would be considered a gain, and the person(s) who inherited them would pay a capital gains tax upon the sale. Most people do not sell them at a gain because they need them for money and they sell at a loss... those that sell at a gain usually do not report it either.... however, dealing with property in the estate, it will add value to the entire estate, thus creating the issue you're talking about, assessing value to plan for estate taxes, I'm assuming.

What I'd do as mentioned is set up a revocable trust, or a living trust for all of your personal property and/or real property. You can set up a Collectible Irrevocable Trust which includes all of your antiques, relics, firearms and what not. This will allow you to disclose their value at the time of transfer from you to the trust, and when you pass on, the Trust can be dissolved per the terms, or remain in perpetuity with new Trustees, offering benefits to the beneficiaries (friends, family, etc.).

Lots of information but if it were me (and I had that much to worry about) I'd put it in a separate Trust, and not worry about it adding to my estate's value.

 

[danbrew]

Thanks Sneedb82, you hit the nail right on the head.

 

[psyopspec]

I only have about a dozen right now. Currently my LW&T specifies individual recipients.