Parenting Pointers: Estate Planning

 One of the most common problems when it comes to managing physical assets is that people simply don’t know that they have anything to manage. Sure, they love their latest couture gown or new furniture, but they don’t necessary think of these things as part of their portfolio, or stay abreast of their fluctuating values. And that doesn’t begin to cover stuff that’s been stored away and likely forgotten. If it’s been a few years since you ventured into the basement, chances are there is something of value that you need to have appraised, whether it’s the antique chandelier you inherited or the painting by an unknown artist whose is now commanding top dollar for their work.  This becomes much more complicated if you have multiple residences, especially those you don’t spend much time in. Regardless of your circumstances, the first step is to catalogue everything and record the information so that it is legible and easy to find. While a written journal is a good start, digital tools are even better – for example, all-in-one solutions that allow you to store all sorts of information, including photos and provenance, in one secure place.  

Technology also bridges the gaps between generations. One of the reasons it’s so important to manage your physical assets is so you can include them in your succession planning. For example, if a particular item or property holds sentimental value for your daughter, you might make a specific bequest to her in your will rather than risking its sale or division after you’ve gone. Technology can also help you teach your heirs about finances, which is great if money was a subject your family has historically avoided. Millennials and Zoomers are not interested in sitting around the conference room table at their financial advisor’s office, wading through stacks of papers like their parents and grandparents. They want virtual access to their assets at any time, from any place; they also tend to be less trusting of advisors and want to be empowered with the information to make decisions on their own. Digital tools allow family members to share this information with each other in real time, which fosters communication and gives everyone a chance to weigh-in on purchases, sales, and donations.  In the process, younger generations learn how to manage wealth organically, rather than having to sink or swim when they come into their inheritance.  

While initially it may seem overwhelming, managing your physical assets can actually be simplest aspect of your portfolio. It starts when you set clear goals that align with your family’s values and dreams for the future. Ask yourself what you want to accomplish. Are your physical assets simply for your enjoyment, or are you buying them as investments? Do you consider them part of your legacy, to be passed down to your heirs or donated to your favorite philanthropies? Whatever the case, knowing how much they’re worth is critical to managing your risk and gaining a more realistic picture of your wealth while bonding with your family members.

I had a chance to learn more in this interview.

1. What exactly are physical assets? Physical assets are collectables, jewelry, art, cars, homes and everything in them. Simply, they are all the things you own.
2. How can people get an accurate picture of the worth of physical assets? They can get certified appraisals for items over a certain value and receipts or purchase documentation
3. Why is it important to consider what happens to them as part of an estate plan? These assets are the things that typically lead to the most issues when there is a change of ownership.
4. Why are they often overlooked, but also possibly a simpler piece of a portfolio? These things are complex and hard to deal with. We manage our financial assets proactively with a team of people, but we react to our things breaking down and don't value them in the same way. EstateSpace was founded to help families manage their physical assets like they do their financial assets and prevent major conflict across generations to prevent things such as sibling divorce.