Welcome to the 19th in a series of Probate Horror Stories, courtesy of Brown & Crona, LLC. Last month our topic covered the potential problems that can occur if the executor you choose declines the responsibility. This month features how valuables left out of a will can cause tax problems down the road.
Fictional Situation: Marty
- 77-year-old widower
- Suffered from early signs of dementia
- 3 adult children residing in different states
- Avid collector of antiques
- Created a will
Marty loved reliving the past by purchasing antiques at auctions, estate sales and even yard sales. Because he had such an extensive collection, he decided not to list out the value each specific item in his will. Instead, he and his lawyer worked together to lump his collection into a personal property category, placing a ballpark monetary value on the entire collection.
Unfortunately, Marty began to have lapses in memory and was apt to forget some of his antiques purchases as time went on. Because none of his children lived nearby, they did not always know what types of collectibles their father was amassing. Marty did not see the need to update his will because he had already determined the monetary value of his valuables.
Upon Marty’s death, the executor began to uncover many items of great value that were not included in the original will – items that greatly exceeded the value designated in the personal property category of his will. Among the unaccounted-for items included a first edition book, a Handel lamp, a vintage Coca-Cola sign, a vintage pocket watch, baseball cards and more. All of these items had to be included in the overall value of the estate, causing a significant tax burden to Marty’s beneficiaries (his 3 children).
As a result, Marty’s children were forced to sell many of the antiques in a fire sale in order to pay the estate taxes. They did not receive top dollar for the items due to the urgency of the matter, thus their inheritance was diminished.
Marty had the very best intentions when he set up his will with the catch-all personal property category. He simply didn’t realize that it would have been better for his children if he had itemized the value of each antique in his will and regularly updated his will to include new possessions and increase or decrease the value of the old ones. If he had a lawyer that knew how to itemize antiques, he may have better protected his children from estate taxes.
The Denver will lawyers at Brown & Crona, LLC can help you draft a will that includes a good assessment of all of your valuable possessions. We will also be diligent in reminding you to update your will regularly to account for any new items that you accumulate or those that you may have sold or donated. Our goal is assist you with minimizing estate taxes. Call (303) 339-3750 or send us a message online to learn more about how to get assistance with creating a will in Colorado.
Watch for our blog next month for the next installment in our Probate Horror Story Series.