Figuring out how to divide assets is one of the hardest parts of estate planning. Many Californians choose to split an estate equally amongst loved ones, but even this can become challenging. Whereas assets like cash, stocks and bonds are easy to value and then divide, other assets, like family heirlooms are much more difficult to address. Yet, there are certain steps to help work through this process and ensure that hard assets are distributed in accordance with one's wishes.
The first step is to know the true value of an asset. Items like jewelry and artwork can have fluctuating values depending on their respective markets though, so it is important to have a recent appraisal. Then, the recent value can utilize that figure in estate planning. When getting an asset appraised, also ensure that the person valuating it is experienced and, if appropriate, certified. This will help ensure accuracy and validity of the asset's estimated value.
Once the value is known, one can begin to figure out how it should be distributed. One way is to leave the item to multiple parties with the option for one of those individuals to buy out the others. This essentially shifts the burden of figuring out who will wind up with the asset. Another option is to simply sell the asset and divide the proceeds. If that is not appealing, then one can choose to leave the asset to one person and divide other assets to achieve fairness, if that is the ultimate goal.
Dealing with hard assets can be a challenging process, especially when there is a significant number of them. However, by doing some work on the front end, one can better ensure that their estate plan addresses these assets in a way that works in furtherance of one's estate planning goals.