Today I just heard the story about a woman who bought a painting in a garage sale – a painting that could turn out to be an original Picasso.
This $2 purchase could be worth a couple million dollars on the art market.   What a find if it proves to be true!

As I work with clients documenting the details of their wishes for their personal items, I come across a lot of things that could easily end up
in a garage sale by mistake “waiting to make someone’s day.”     The generation coming up stands to inherit not only large sums of money, but true works of art or collector’s items.      So what happens when the time comes for the family to transition the items?     How do you split up valuable pieces of art between siblings?   Worse is when the family doesn’t know the value of items in the house and hires someone to just sell it all because they don’t have time to deal with it.    (thus the newsworthy garage sale finds)

I recently had coffee with two of the most interesting ladies who own Whimsey Appraisals to learn more about the value and process of getting an appraisal.     Kristel and Glenda Overfelt are extremely sharp ladies with a skill for appraising anything from antiques to fine art.       I was amazed at what I learned over coffee and thought I would share it with you.

What is an appraisal?
An appraisal is a professional estimate of the value of something.    People usually have items appraised for insurance purposes, tax strategies, estate planning and settlement, etc.     I was surprised to learn that in order for an appraisal to stand up in court, there are specific things that need to be in an appraisal report.     This is the difference between a written statement of value and true appraisal report.

Value of a True Appraisal Report
Many times family members come in to do an inventory for the probate court when a loved one passes away.   They assign what they think things are worth for the sake of the estate settlement.     Glenda told me that it is common they go to appraise someone’s valuables, and the values assigned to the items are not close to what they should be – either over or under an appraisal price.     A lot of times it will alter the course the family takes – either keep the item or sell the item through a channel other than a garage or estate sale.    A good appraiser should be able to help you with information on how to go about selling valuable items and your options for asset disposition.        I am currently working with a client who has many works of fine art and it will be a true challenge for his heirs to split up and dispose of the property in an equitable fashion.     Unfortunately, I think this will have an impact on his heirs after he is gone.

If you have valuables that need to be insured, you will also need a professional appraisal report to stand up to an insurance claim.   If you have a 14th century chair you insured for $5000, then you will have to prove the value of that chair if your home burns down or it is stolen.     Values can be nebulous when it comes to settling an insurance claim.    Better to be safe than sorry later for not being able to defend it.

There are a lot more reasons for getting an appraisal report such as settling a divorce, donating to valuables to a  charity for tax write-off purposes, downsizing your estate or even if you want to purchase an object.  Since I am in the planning business, I am especially interested in the process and value of appraisals in estate and survivorship planning.

It is a true challenge facing the next generation – what to do with all that stuff!    There are emotional obligations being passed down along with the responsibility to dispose of it wisely for the benefit of the heirs.       Addressing the value of your personal belongings now, as well as the disposition of your property, will lessen the load on your family when you are gone.     Your lack of  planning could end up in the news when someone purchases your extremely valuable painting for a few dollars in your family’s garage sale.

THE SITUATION -
I had lunch with a good friend of mine the other day.     Over our long lunch we talked about the recent death of her Mom.   Because she had started off with a diagnosis of Alzheimers, last year, we had already discussed “the planning” and “what to do” prior to her passing.    My friend and her sister did a stellar job managing the finances and her Mom signed off on a quitclaim deed to ensure her daughters could manage the property wisely.    On top of the Alzheimers, their mother was suddenly diagnosed with a terminal stage of breast cancer.      She past away 3 months later.        During our conversation, she talked about how fortunate they were to have planned so much in advance, but there were still so many “items left on the list” that it was a considerable strain for her and her sister.        One of the items left to do was to sort out all of her Mom’s belongings and give away what they didn’t want.

HOW ARE PERSONAL POSSESSIONS TO BE DISTRIBUTED
During my friend’s last visit for the memorial service, she and her sister had a couple of “visitors” to the condo.    One was a neighbor who dropped by to tell them that she really needed a vacuum cleaner and a microwave.    The other one was a friend of her Mom’s who promptly went into the kitchen and started opening cupboards saying how she always liked those green dishes and she wanted them (for a price of course).    Talk about the audacity of people swooping in on the goods without a care about what the two daughters were going through.     I was dumbfounded by the craziness.

That brought us to the discussion and difficult question she had,  “What do I do with all of my Mom’s personal things so that I can honor her memory?”   My recommendations were as follows:

Best Case Scenario – designate who gets what before you pass away
The person who owns the things should create a list of special bequests within the will or go ahead and arrange to give away the items while the person is still alive.     This is getting to be more common, if and only if, the people allow themselves the option and clarity of planning in advance.

After The Fact – set up guidelines for distributing the property
When trying to objectively dispose of personal property, lay out some guidelines of priorities to keep yourself from feeling pressured.
For example:

1. Children and direct family get the things that mean something to them and is agreed upon by all family members.
2. Then close friends of the deceased along with distant relatives may be queried for things that they would like to have.
3. For valuable items left over, you may want to think about bequests to museums and art galleries so that many can enjoy the items.    Or, think about locating a consignment shop for selling the item directly.
4. Finally, charity, neighbors and garage sales for all the things left over after meeting the guidelines above.

On a final note:    My friend was still wrestling with honoring her mother through her things.      The first year after a death is a significant emotional transition.     If you feel you have the luxury of time, hold on to the things until you feel you can let them go without regret.     It is natural to see your loved one “in their things” and time will speak to you and soothe you into doing what is right.    After all, things are just things, and memories and the love you have for your family will last forever.    Think about it…….

When working with clients I find myself climbing up on my soap box quite frequently.   On almost any given day, you can hear me talk to clients about their “stuff.”      Take a look around your home and/or office.    Someone will have to deal with all your “stuff” if something happens to you.  It includes every single sheet of paper, every box of sentimental trinkets, every article of clothing, every picture, every part of your comic book collection, every dish, every piece of jewelry, every work of art, every piece of your hobby supply, every plant, every appliance, every CD, every book, your computer, your autos, your yard equipment, your junk, your valuables and your “it means something to me” items.  If you have ever moved, you know how difficult it is to go through your own stuff much less go through someone else’s stuff.

We, as Americans, have become addicted to having stuff.      Take a look at the storage industry.   In 2007, 1 out of every 10 households rented a self-storage unit.     That means 10% of all the people in the USA have possessions locked away in a multi-unit facility they visit only on occasion.   It took the self-storage industry more than 25 years to build its first billion square feet of space and added the second billion square feet in the past 8 years.  It’s a trend that will send shockwaves through your heirs as they work through the boxes of your stuff.  Think about it.