Any physical property (especially anything of sentimental value)
Fights don't just happen over rare collectibles. When it comes to family arguments, Romero points out, they can happen over any physical property. Household items and personal possessions can have more sentimental value than money, adding emotion to disagreements. They're also harder to divide. “Let's say you have three kids,” Romero asked. “Who's going to get Mom's wedding ring?”
Another problem with physical possessions is that their value can be hard to gauge. When it comes to jewelry and antiques, Romero believes people tend to overvalue what they're leaving behind, perhaps inflating their expectations unreasonably. “Jewelry is usually very expensive when you buy it, but it quickly depreciates when you try to sell it.” He also notes that antiques are not as popular as they once were.
Other items fetch unexpectedly high prices: Another customer had a pile of women's designer suits that sold for a tidy sum, and might have donated them all to Goodwill if Romero hadn't checked.
To avoid trouble, start planning your physical estate in advance. Make it clear who gets what to avoid disputes. If possible, try to sell things you don't need while you're alive so you can keep more of the simplest and most effective inheritance: cash.
How to ensure your wishes are respected
So you don't want your family to feel like they got the turkey, right? How can you avoid that? No one wants to talk about death, even though you leave a lot behind. To avoid exacerbating the grief of your loved ones when you're gone, Reich says it's important to talk about it.
“The best advice I can give to owners who want to pass on their property to their heirs is to have an honest discussion about it first,” he said. “Often times, the heirs will simply say they don't want the property. In those cases, the owner should sell it while they're still alive.”
Dungey offers a few more suggestions.
First, she says people should reconsider selling assets while they're still alive.
“Rather than selling assets during your lifetime and realizing capital gains, if you are selling assets rather than inheriting them, we recommend instructing your executor or trustee to sell the assets during the estate process, for the sake of family harmony,” she said. “The assets will benefit from an increased tax basis on the owner's death, and by directing a sale, you may be able to deduct the costs of the sale as an administration expense.”
She also suggested expecting disputes over the value of some property, pointing out that real estate value is different from insurable value, which of course is different from sentimental value.
“Furthermore, non-cash assets do not have the same real value as cash equivalents, and we would encourage executors to obtain an estate tax valuation from a reputable valuer who has experience valuing that type of asset,” she said.
Finally, look beyond the specific provisions of your will. “Leaving a will can be extremely helpful in reducing conflicts, as family members are more likely to respect the wishes of the deceased,” says Danzy. “In my experience, while beneficiaries may not want a particular asset, they do want the value associated with it, and are unlikely to give it up unless the asset outgrows its value or the cost of ownership exceeds the resale price (such as a timeshare).”
What to do if you inherit something you don't want
Let's say you're the unfortunate heir of someone who didn't follow this advice: You own a timeshare in a place you'll never visit, a German military pistol your grandfather acquired in Europe, or your Great-Aunt Louise's Bösendorfer (you live in an apartment and don't even play the piano), and you don't even have a yard big enough for your grandfather's strangely valuable collection of garden gnomes.
Should I accept an inheritance I don't want?
No, it isn't, but your refusal may cause headaches for your executor.
You can also refuse to inherit, i.e. renounce the inheritance.
A renunciation, Dansey said, “means the assets will pass to the next heir, but it does not relieve the executor of his or her rights to the assets if probate has commenced.”
As a result, “a blanket will should give the executor the power to disclaim estate assets, including the power to withhold payment of associated fees and the power to seize property or sell it for nominal value.”
“Advice varies by property, but in the past we've had clients try to donate assets in the case of estates and collectibles. If possible, we encourage them to sell their entire collection to a dealer,” Reich said.
Reich noted that the price the collection gets from a dealer “will likely be much lower than the actual retail price,” but it saves the seller the trouble of selling each piece individually, especially if they're not an expert on the items' value.
