For the next several years, the United States is going to be inundated with the largest demographic of older people joining the ranks of “seniors” that this country has ever experienced.
This new trend signals dynamic changes for estate planning and estate dispositions. In the last three years, a paradigm shift has occurred in the personal property business. The multitude of inquiries are now from Boomers asking for help with their parents’ personal property appraisals or estate clean outs. They are just beginning to comprehend that they also are facing the eventuality of their own need to scale back. Before 2006, the majority of inquiries for help in appraising items, helping downsize, and appropriately disposing of personal property, were almost always from Boomers’ parents, who had become frail mentally or physically and needed to be in a more protective living environment.
One reason for the dramatic changes in estate planning and property disposition is based on the statistic that Baby Boomers have more siblings than children! The support system underneath them will not be as broad as what they provided for their parents’ generation or for themselves. They are expected to outlive their own parents by at least ten years. One can only surmise what will happen to older adults in this future, if their estates are not large enough to sustain them in their golden years. Soon, Boomers will be making life-changing decisions more proactively for themselves than their parents did.
By definition, an estate is “the nature and extent of an owner’s rights with respect to land or other property.” However, people see their estate as land, building structures and portfolio assets in cash and investments, but often overlook the potential worth of their personal property that surrounds them. In fact, recently completed personal property appraisals show that the value of personal items and collections housed within the home were appreciably more than the sale of the house and its land.
Over the years, personal property begins to build in all households. The psychology behind accumulation has been studied in hoarders and certain types of compulsions. However, the basic reasons all people accumulate are for comfort, sentimentality, procrastination, fear of things becoming more valuable, fear of change, and control. Within the Great Depression era, they also didn’t want to discard anything, because “one day we will use it.” As humans, our need to accumulate probably goes back to the time of the caveman. If they didn’t gather and accumulate the basics, they simply didn’t survive.
Personal property items, such as jewelry, antiques, furniture, heirloom pieces, art, coin, stamp and book collections, may all command impressive amounts of money if their market value is known, as well as the best outlets for selling. To safeguard a client’s personal property within an estate, professionals should help you with the evaluation process, before costly mistakes occur.
With this in mind, you should have a list of reputable senior resources at hand to recommend to clients. For the evaluation of personal property, work with a respected personal property appraiser who is educated and experienced in this industry and can also recommend a network of reputable professionals to properly dispose of collections. Personal property experts are strategic partners to you, to urge your clients to:
Know the appraised value of their household goods, collections, and furnishings. There are plenty of unsavory and unscrupulous people waiting in the wings to take or to purchase these belongings cheaply, when the owner does not know the worth!
Record this appraisal information in a written format with photographs or videotape to accompany the evaluation for personal knowledge, insurance purposes, and to place with their important legal documents. This record eliminates most from guessing the value, when the time comes to divvy up the estate equally among designated heirs. Update every five years.
Find someone to help them understand estate tax and consequences. Emphasize that “dying is not cheap” and the wisdom of distributing personal property prior to death, if they desire. These actions help minimize feuding among the heirs, simplify what the heirs have to go through, and make life easier for everyone involved in the estate settlement process.
By knowing the value and having it in writing, their heirs will not make dangerous assumptions, for example, that the personal property is all “junk” and should be disposed of quickly at a yard sale. Personal property liquidators provide your client with peace of mind and the means to downsize and dissolve a home full of a lifetime of accumulated things.
A professional evaluation is also necessary because family members can inflate values and history of items that have been passed from generation to generation. Sometimes these stories about items become so embellished with time that they lose their accuracy.
The process of dismantling the contents of a home begins with family members. Prior to the division of the personal property, an appraiser should have come in to offer the executor and heirs a fair market value on the significant belongings. Once items have then been distributed among the heirs, the remainder should be left in charge of a professional appraiser and estate liquidator, who knows upon sight what contents can be sold and what can’t. Different methods of distribution include estate sales, auctions, consignment houses, garage sales, donations, and ads in newspaper or on the Internet. Before anything is given up to these outlets, the family should be aware of what they have and the values. It is a wise decision for senior clients and Boomer heirs to plan their own downsizing and evaluation of their possessions. Making these decisions while the respected elder is still in control is best for everyone.
Boomers are changing the way they will think and deal with estate matters, since so many of them will soon be handling these decisions themselves. Together, let’s advocate for all older adults to ensure that they are treated fairly, honestly and with compassion, in learning the worth of their personal property and helping them downsize, discard and distribute their belongings.