Life planning appraisals
Several of the more common types of personal property appraisals include insurance replacement cost (to establish value in the event of damage or loss), divorce appraisals (to establish value for an equitable distribution), and charitable contributions that are not in cash (to establish the value of tax deductions). But another type of assessment that is being requested more frequently today is the Life Planning Assessment.
Life planning appraisals help both individuals and families get their personal property affairs in order. Over the past 25 years, many have accumulated large amounts of personal property assets, including antiques and collectibles, fine arts and prints, decorative accessories, coins and stamps, porcelain and glass, jewelry and precious metals, household and residential content, effects personal, and much more. Some were collectors and others simply accumulators. And while some may have an idea of the value of specific items in today’s soft market, the value may not be as apparent to your family (or heirs, executors, and / or proxies).
Let me share a sad but true story. The mother of a family had passed away (the father had passed away years before) and the family came together to take care of the personal property before marketing the real estate. The course of action they chose was to have a garage sale. And at the yard sale, the family sold the mother’s $ 10,000 diamond ring for $ 10. Because they thought it was jewelry! They just didn’t understand its true value.
Two major mistakes were made here. First, the family should have appraised the items they were selling before putting them up for sale. A fundamental rule of selling is that you should never sell anything until you understand its value.
But the deceased mother undoubtedly knew that the ring had considerable value, so she should have communicated that information to her family in some way. A verbal warning would have been helpful, but a written evaluation, with photos, would have been much better. And that is the precise goal of a Life Planning Assessment.
Who should consider a life planning assessment? Virtually anyone who is interested in:
- Get your personal property affairs in order.
- Help your family recognize items of value.
- Avoid internal fights in the family over what is worth and who gets what.
- Help your family achieve an equitable distribution.
- Prevent your family from making a big financial mistake with your life’s treasures.
These are the six basic steps in the Life Planning Assessment process:
- Step n. # 1: select an appraiser: You need to find a professional, experienced, and unbiased personal property appraiser who understands current values and has no interest in buying anything from you. You should NEVER sell to the person who tells you how much your things are worth.
- Step # 2 – Identify the type of value you are looking for: Are you looking for a fair market value (a fair retail price between willing and knowledgeable buyers and sellers); Auction value (why something can be sold at auction in today’s market); o Wholesale value (a fair selling price for someone who is buying for resale). Each person’s individual situation is different and you must select the type of value that best suits your personal needs.
- Step # 3 – Identify Items of Value: You probably don’t need to get a value on every pot, lamp, spoon, or vase. Rather, in a life planning assessment, your goal is to identify items of specific rarity and value that the family might inadvertently overlook, such as fine antiques, high-end collectibles, gold and silver jewelry; Rarer coins and stamps, etc. You need to identify a specific threshold, perhaps $ 250, $ 500, or $ 1000 per item, individually list only those threshold items, and then group the remaining lower-priced items together with a combined value. For example: Country Corner Closet: $ 2,500; Sterling silver cutlery: $ 1700; 3 pieces of Rookwood pottery: $ 1000; Balance of all items remaining in the room: $ 500. Again, your goal is to identify key items of value. The higher the threshold value, the lower the appraisal costs because the appraisal will take less time to complete.
- Step # 4: Describe and Number the Key Value Items: The appraiser should identify the specific room (for example, the living room) and then describe and number each item in that room. For example, Living room n. 1: field corner wardrobe; Living room n. 2: sterling silver cutlery, etc. This makes it easier for the family to identify key items later. And even if you later move things to another room, the photos in Step # 5 should solve this.
- Step # 5: Photograph key elements: Have the Appraiser photograph each key item of value and then have each photograph numbered to match the written description. In the event the family does not understand what the $ 1500 “Roseville Pine Cone Jardinière” really is, they will be able to identify it from the photo.
- Step # 6: Final evaluation report: Once the Life Planning Assessment report is complete, don’t hide it where your loved ones will never find it. Submit it with your other important documentation, or provide a copy to those you deem appropriate. PDF files, digital images and / or CDs will allow you to send the report by email or USPS if necessary.
She had a client whose husband had died prematurely. He owned a substantial amount of personal property and, in case something unexpected happened to him, he wanted his children to understand the values so that they could deal fairly with their personal property, fairly and without fighting. Subsequently, we conducted six individual appraisals (art, furniture, oriental / other rugs, gold, silver and precious metals, porcelain, glass and porcelain, and other miscellaneous items). We prepare written master evaluation reports and send a copy to each child, along with a CD of the photographs. Once this was done, my client slept much better at night, knowing that she had helped her family.
In conclusion, life planning assessments can help you sleep better at night. They are not intended to replace your all-important last will and testament. Rather, Life Planning Assessments help your family identify important items and help them avoid making major financial mistakes during what promises to be a very difficult time.