When you’re thinking about your estate plans, sooner or later your mind is going to turn toward the smaller, tangible items that you own — all of those little things that you’ve collected over the years.
How do you divide those kinds of things up fairly? Before you even start, you have to consider the value of each item. That may not be something you can measure in dollars.
Everything you own has 3 different values
All of your personal items, whether it’s that relatively humble set of china that belonged to your grandmother or the gorgeous diamond anniversary band you always wear, can be valued three different ways:
- The sale value: This is generally what you’d get if you sold the jewelry for scrap (or, if you’re lucky, on consignment to a private buyer) and put everything else in the house up for auction. Regardless of what you paid for an item, it’s only worth what you can get for it in a sale.
- The insurance value: This is the retail replacement value, or what it would take to buy the equivalent item on the current market. That’s usually better than what you could get in a yard sale or auction (but not always).
- The sentimental value: Grandma’s china and your diamond band may not be remotely on the same page when it comes to their sale value or insurance value, but they could be worth equal amounts to your heirs because of their emotional value. One heir may treasure the dishes because they were Grandma’s favorite, while another may value your ring because it was yours, not for its diamonds.
Coming up with a way to handle your personal assets in your estate plan can be difficult to do on your own. Working with someone who has experience in these matters may make it a lot easier.