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Several
of the more common types of Personal Property Appraisals include
Insurance Replacement Cost (to establish value in the event of
damage or loss), Divorce (to establish value for equitable distribution),
and Non-Cash Charitable Contribution (to establish value for tax
deductions). But another type of appraisal that is being requested
with increasing frequency today is the Life Planning Appraisal.
Life
Planning Appraisals help both individuals and families get their
personal property affairs in order. Over the past 25+ years many
have accumulated vast amounts of personal property assets including
Antiques & Collectibles, Fine Art & Prints, Decorative
Accessories, Coins & Stamps, China & Glass, Jewelry &
Precious Metals, Household & Residential Contents, Personal
Effects, and so much more. Some were collectors, and others were
simply accumulators. And although some may have an idea about
the value of specific items in today's soft market, value may
not be so apparent to family members (or heirs, executors, and/or
powers of attorney).
Let
me share with you a sad but true story. A family's mother had
passed away (the father had passed years prior) and the family
came together to deal with the personal property before placing
the Real Estate on the market. The course of action they chose
was to have a garage sale. And at the garage sale the family sold
mother's $10,000 diamond ring for $10. Because they thought it
was costume jewelry! They simply didn't understand its true value.
There
were two major mistakes made here. First, the family should have
had the items they were selling appraised before putting them
up for sale. A fundamental rule of selling is that you should
never sell anything until you understand its value.
But
the deceased mother undoubtedly knew the ring had considerable
value so she should have somehow communicated that information
to her family. A verbal heads-up would have been helpful, but
a written appraisal, with photographs, would have been much better.
And that is the precise objective of a Life Planning Appraisal.
Who
should consider a Life Planning Appraisal? Pretty much
anyone who is interested in:
- Getting
their personal property affairs in order.
- Helping
their family recognize items of value.
- Preventing
family in-fighting about what-it's-worth and who-gets-what.
- Helping
their family achieve equitable distribution.
- Preventing
their family from making a major financial mistake with their
lifetime treasures.
Here
are the six basic steps in the Life Planning Appraisal process:
- Step
#1 - Select an Appraiser: You need to locate a professional,
experienced, and unbiased Personal Property Appraiser who understands
today's values, and who has no interest in purchasing anything
from you. You should NEVER sell to the person
telling you what your things are worth.
- Step
#2 - Identify the Type of Value You Are Seeking: Are
you seeking Fair Market Value (a fair retail price between willing
and knowledgeable buyers & sellers); Auction Value (what
something may sell for at Auction in today's market); or Wholesale
Value (a fair selling price to someone who is buying for re-sale).
Everyone's individual situation is different and you should
select the type of value best suited to your personal needs.
- Step
#3 - Identify Items of Value: You probably don't need
to obtain a value on each pot, lamp, spoon, or vase. Rather,
in a Life Planning Appraisal your objective is to identify items
of specific rarity and value that the family might inadvertently
overlook such as Fine Antiques, High-End Collectibles, Gold
& Silver Jewelry; Rarer Coins & Stamps, etc. You should
identify a specific threshold, perhaps $250, $500 or $1000 per
item, individually list only those threshold items, and then
group the remaining lower-priced items together with one combined
value. For example: Country Corner Cupboard: $2500; Sterling
Silver Flatware: $1700; 3 pieces of Rookwood Pottery: $1000;
Balance of All Remaining Items in Room: $500. Again, your objective
is to identify key items of value. The higher the threshold
value, the lower your appraisal costs because the appraisal
will take less time to complete.
- Step
#4: Describe and Number the Key Items of Value: The
Appraiser should identify the specific room (e.g., Living Room),
and then describe and number each item in that room. For example,
Living Room #1: Country Corner Cupboard; Living Room #2: Sterling
Silver Flatware, etc. This makes it easier for the family to
later identify key items. And even if you subsequently move
things to another room, the photographs in Step #5 should resolve
this.
- Step
#5: Photograph Key Items: Have the Appraiser photograph
each key item of value, and then have each photograph numbered
to correspond with the written description. In the event that
the family doesn't understand what the $1500 "Roseville
Pine Cone Jardinière" actually is, they will be
able to identify it by the photo.
- Step
#6: Final Appraisal Report: Once the Life Planning Appraisal
report has been completed, don't hide it away where loved ones
will never find it. File it with your other important paperwork,
or provide a copy to those you feel appropriate. PDF's, Digital
Images, and/or CD's will enable you to deliver the report via
email or USPS if necessary.
I
had a client whose husband had passed away prematurely. She owned
a substantial amount of personal property and, in the event that
something unexpected happened to her, she wanted her children
to understand values so they could equitably deal with her personal
property, fairly, and without fighting. We subsequently performed
six individual appraisals (Art, Furniture, Oriental/Other Rugs,
Gold, Silver & Precious Metals, China, Glass, & Porcelain,
and Miscellaneous Other Items. We prepared master written appraisal
reports and sent a copy to each child, along with a CD of the
photographs. Once this was done, my client slept much better at
night, knowing that she had helped her family.
In
conclusion, Life Planning Appraisals can help you to sleep better
at night. They are not intended to replace your all-important
Last Will and Testament. Rather, Lifetime Planning Appraisals
help your family to identify important items, and help them to
avoid making major financial mistakes during what promises to
be a very difficult time.
* * * * * * * * * *
Michael
Ivankovich is a Professional Personal Property Appraiser based
in Doylestown, Bucks County, PA. He is a GPPA (Graduate Personal
Property Appraiser), an MPPA (Master Personal Property Appraiser),
and is USPAP-certified. He is a licensed and bonded Pennsylvania
Auctioneer with 20+ years Auction experience, has been named Pennsylvania's
Auctioneer of the Year by the Pennsylvania Auctioneers Association,
and has 35+ years experience in the Antiques & Collectibles
field. Several of his specialty areas include Life Planning, Insurance,
Divorce, and Non-Cash Charitable Contribution Appraisals, as well
as Appraisals of Art, Furniture, Estates, Household & Residential
Contents, and much more. You are invited to visit his web site
at http://www.michaelivankovichappraisals.com
And you can reach Mr. Ivankovich at (215)-264[-4304 or by email:
[email protected]
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