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Estate planning for art, luxury items, and classic cars

Planning your estate isn’t all about deciding who gets your house and setting up a Lasting Power of Attorney – although these are also important considerations.

You probably also have a considerable number of assets that are physical items and might be valuable in both an emotional and monetary sense.

It is important to decide what happens to things like cars, jewellery, watches, and artworks when you die so you know that they will be passed to the right people.

In this article, we go over some of the valuable assets that you may own and how to ensure your wishes regarding them are observed upon your death.

Art and collectables

When it comes to estate planning, artworks and collectable items pose unique challenges, particularly in terms of valuation.

Unlike something more robust in value, (like a house or cash), art and collectables are often subject to significant fluctuations in value, influenced by market trends, the reputation of the artist, and the item’s provenance and condition.

This necessitates regular appraisals by experts while you are alive to ensure accurate valuation upon your death.

Inheritance Tax considerations are also crucial here as art and collectable items can significantly increase the value of an estate, impacting the amount of tax payable.

Collectors should understand these implications and plan accordingly with the help of their solicitor.

Beyond the financial aspect, there’s a personal one, as these collections are often a legacy, imbued with personal history and sentiment.

Preserving this legacy and ensuring it’s passed on to the right hands requires thoughtful planning and often, specialised legal advice to incorporate them into your Will.

Luxury watches and jewellery

Valuing these items is a nuanced process, considering not only the market trends and rarity but also the history and provenance of each piece – much like artworks.

These items must be adequately insured and cared for, which is a crucial part of estate planning.

The emotional aspects of these assets also play a significant role in how they are passed down.

Deciding who inherits these items can be a deeply personal decision, often requiring delicate handling to balance emotional and financial considerations.

Classic cars: Chattel or investment?

Classic and collectors’ cars stand apart as a unique asset class, offering both tangible and intangible value.

While they undoubtedly represent a significant financial investment, these vehicles often transcend their role as mere chattel, becoming instead symbols of personal passion and historical significance.

Traditionally, chattels are personal possessions that can be moved and transported and whilst classic cars fall into this category, they are not just ordinary possessions.

Each vehicle often has its own story, a history that connects it to a bygone era, making it more than just a piece of property.

They can also be substantial investments as some models appreciate over time, especially rare or well-maintained examples.

This appreciation potential transforms them from mere chattels into valuable investment assets.

Their worth can therefore fluctuate based on market trends, rarity, and the vehicle’s condition and history.

When integrating classic cars into an estate plan, it’s essential to consider their possibly dual nature.

When you look to pass classic cars to a loved one, finding someone who appreciates their value as both chattel and investment is vital.

Investment portfolios

Investment portfolios form a critical part of many estate plans, and any planning must take into account the tax implications of the investments, particularly in relation to Capital Gains Tax and the potential tax burden for beneficiaries.

Aligning investment strategies with estate planning goals ensures that the portfolio supports the overall objectives, whether that’s providing for beneficiaries, supporting charitable causes, or ensuring a lasting legacy.

Navigate these complexities with an experienced guide

The complexities involved in managing a diverse estate highlight the significant benefits of employing a solicitor.

A solicitor can provide expert guidance, particularly in handling the nuanced legal and tax aspects of such varied asset portfolios.

Estate planning is deeply personal and varies greatly from one individual to another.

A solicitor can offer a personalised approach, ensuring that the estate plan reflects the unique needs, values, and circumstances of each individual.

Speak to your solicitor today if you think you may have missed valuable assets from your Will or wish to redefine your Will to reflect changes in your personal circumstances.

Rachel Blackburn

Head of Wills, Probate and Older Client Services

I joined Mander Hadley’s Wills, Probate and Older Client Services Team in 2018.I specialise in the preparation of Wills, Probate and estate administration, trusts and trust administration and Lasting Powers of Attorney. I also have experience of care fee planning and appeals of Continuing Health Care decisions.

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