Whether your hobby is stamps, art or any other valuable item, it is important to remember to make your collection a part of your estate planning. At Ball & Morse, PLLC, we take pride in helping people determine what to do with their collections. One option is to put the items into a trust, which offers a number of benefits.
According to The New York Times, one significant advantage is that you can avoid paying taxes on the value of the collection when you use a trust. However, in order to do so, you must forward the proceeds of the trust to a charity.
Trusts are also useful when passing collections on to heirs. Keep in mind that if you owe any money at the time of your death, creditors are permitted to go after your estate. However, if you put collectibles into an estate, they will be protected from those creditors. Further, placing the items into a trust will also help avoid any fees that would have accumulated if the collectibles had to go through probate.
If you establish a living trust, you will be able to add or remove items at any time. Whatever you decide to do with your collection, which could include selling it or passing it on to someone else, it is imperative to get it properly appraised. This can help you determine a fair distribution if you plan on passing the collection on to your children. It is also important for tax purposes to know the true value of the items.