You’ve spent decades building a life and along the way you’ve likely accumulated a lot of stuff, like cars, furniture, collectibles, family heirlooms, perhaps a home and maybe even a vacation home. It’s only human that we develop some emotional attachment to our possessions and assume our children and grandchildren will cherish them and will enthusiastically appreciate them when we are gone. But will they?
Forbes magazine reports that younger generations are adopting more minimalistic lifestyles and opting for experiences over material possessions. Writers for the magazine point to a nationwide study that found:
- “78% of respondents would rather spend money on an experience than a thing
- 77% say their best memories come from experiences
- 72% of millennials would like to increase their spending on experiences.”
Furthermore, many young adults today live in much smaller spaces because of the high cost of housing and other factors. They just may not have the room for additional belongings.
Although parents mean well when they leave their treasured possessions to their offspring, they just may be passing along complications, confusion, and conflict. To avoid these problems the best place to start is by having direct conversations with your kids. By involving them in your downsizing and letting them choose items that hold sentimental value they inherit not just stuff but memories and stories, too.
When your children do express interest in specific items document their wishes in your estate plan but be emotionally prepared if they say they don’t want certain items. Here are some suggestions of how to deal with your stuff.
The Family Home
“Let's start with the big one, your house,” Kiplinger Magazine suggests. “This is the one people balk at the most, but here goes. Your kids don't want your house. I know you think they do, but they really don't. In most cases, even when they do, it would be impractical for them to buy it anyway. How are three kids going to ‘share’ my house? There's no way that's going to work.”
TIP: Edelman Financial Engines suggests that “you might consider leaving the family home to the heir who genuinely wants it while balancing your estate with financial assets for others. Or you might explore options like creating an irrevocable trust that directs how real estate…is managed after your passing. Your will can also direct that the real estate be sold, and the proceeds distributed equally among your heirs.”
Vacation Homes or Timeshares
You’ve done well enough to own a vacation home or a timeshare? Congratulations. While some may treasure the opportunity to inherit a second home, others might view it as a responsibility for taxes and maintenance they're not prepared to handle.
TIP: You may want to consider selling the property during your lifetime or transferring ownership to someone who would appreciate it.
Collectibles
Your Star Wars action figures, Beanie Babies, Hummel figurines or other collectibles might be special to you, but Yahoo Finance advises “there’s a good chance your heirs don’t actually want to take on your treasures. Collections of art, antiques or other collectibles can be difficult to sell and might not hold their value over time.”
TIP: “To avoid burdening heirs with the task of selling these assets, consider selling or donating them during your lifetime or setting up a plan for their gradual sale.”
Shoeboxes of Old Photos
Family photos may be cherished, but they lose value if no one knows who’s in them, where the photos were shot or what the occasion was. Future generations will not understand the significance of unidentified relatives or acquaintances.
TIP: Take the time to label photos so their meaning is preserved. MSN.com suggests that “in addition to digitizing these prints, label and organize them too. Print names, places, and dates on the back of them. Even if you’re not 100% certain of the time and place, foggy details like “trip to the cabin during the summer vacation of 1959 or 1960’ will still be greatly appreciated.”
“Your next of kin will appreciate you taking the time to digitize old photos. If you have hundreds of photos, scanning them one by one may not be feasible. Services like LegacyBox will digitize your print photos and reels for you at affordable rates.”
Storage Units
“Storage units typically hold an average of $1,000 worth of belongings,” Thefinancekey.com reports. “However, the costs can quickly add up, making them an expensive option. Many of the stored items often become irrelevant or unused over time. This makes storage units a questionable investment for most people.”
TIP: “Declutter storage spaces now. Give away or sell them away instead of leaving them to someone else to figure out. “
Edelman Financial Engines advises that in general there are three “smart ways to handle possessions your heirs don’t want:
1. Dispose of Items with No Value
Items that are worn out, outdated, or hold no monetary or sentimental value should be disposed of during your lifetime.
2. Donate Items with Modest Value for Potential Tax Benefits
Possessions that still have use but aren't wanted by family members can be donated to charitable organizations.
3. Sell Valuable Items and Convert to More Useful Assets
For possessions with significant value that your heirs don't wish to keep, consider selling them and converting the proceeds to financial assets that are easier for heirs to manage. This approach can:
- Eliminate the burden on heirs to deal with unwanted physical assets
- Provide financial benefits to heirs when they might need it most
- Allow you to witness the benefits of your generosity
- Potentially reduce future estate settlement complications
Depending on what you're selling, options include:
- Online marketplaces for everyday items
- Estate sales for household contents
- Auction houses for antiques and collectibles
- Consignment shops for quality furniture
- Specialty dealers for specific collections”
“They say ‘cash is king’ for a reason,” advises the Motley Fool. “It’s simple, easy for your heirs to divvy up, and people understand exactly how much it’s worth. Cash can be all-around simpler to navigate than property or investments, which may take months to value and sell — not to mention the potential tax liability you may incur by selling certain inherited assets for a profit.”
“By taking action now, you spare your loved ones the emotional and logistical burden of dealing with unwanted possessions during their time of grief,” Edelman Financial Engines says. “Additionally, you gain the satisfaction of seeing your possessions find new homes where they'll be appreciated or converted to assets that better serve your family's needs.”
