News You Can Use
Volume 1, Issue 1
It’s a question I’m often asked – ‘What’s collectible’? And it’s a good one in this seemingly soft marketplace where supply outweighs demand. In working with downsizing and estate professionals like yourselves I’ve been asked numerous times to put together a list of stuff to watch when you are sorting through a home and its lifetime of accumulation; so here it is. Most people know that fine jewelry and Group of Seven paintings are going to hold value, so this is really a list of unexpected items that you may overlook or wouldn’t think of.
- Old toys
- Costume jewelry
- Christmas & Halloween stuff
- Dress patterns
Often times in going through an estate I find a stash of children’s toys from the 1950s. Vestiges of the baby boomers being babies, it may be a collection of dinky toys, or Barbies or a stuffed Punkinhead. They sit in the closet – to precious for parents to throw out but not something their original owners want anymore. If still in good condition, these items have a collectible value.
Yes everyone knows to grab the jewelry box because gold and diamonds have value, but I’m talking about costume jewelry like rhinestones and plastic stuff. Just because something isn’t made from ‘the real thing’ doesn’t mean it isn’t valuable. Don’t dismiss these pieces, there have been whole books written on the subject and fortunes made in buying and selling costume jewelry. A month ago a plastic pumpkin brooch sold on eBay for $8,400.
Still desirable are military items. The further away we get from WWI and WWII the rarer this stuff becomes, and the fascination and thus the demand grows. In this category the more the better, a single pin may only bring a few dollars but if it’s part of a larger collection of stuff that belonged to the soldier then it creates a story, and this is what collectors will pay a premium for.
This may or may not catch you off guard. Halloween actually supersedes Christmas in some ways as the most collectible holiday. It may be due to the fact that there is a lot more Christmas stuff than Halloween which is a relative minor holiday by comparison but both are certainly hot collecting fields. I’m talking old paper decorations to glass ornaments, postcards to figural pieces. The key here is the older the better.
Yes, photos. And I’m talking snapshots. Photography was invented in about 1820 so by 1900 virtually every household had a camera. Flash forward 5-6 generations and what we’ve got is tons of photos that we have no attachment to or memory of, this creates the supply, all these photos are now coming into the market. As for collectability, they are a cheap thing to start collecting and intensely personal and thus fascinating for a whole variety of reasons to the collector. For more info you can click here to visit a blog entry I wrote about photography.
Yes another surprise. They are something that virtually every house has and they often get thrown out or sent out for donation, but buttons can collectible. This is a bit of a needle in a haystack because it’s only one in a thousand that are worth good money but they’re worth more than a toss.
Sought after by collectors and designers and dressmakers alike, vintage women’s dress patterns are hot. Again these are things that are found in many homes and often end up in the trash but groupings regularly go for good money, while the odd desirable single patterns have been known to go in the high hundreds.
Namely sterling silver. Whether we’re talking flatware or larger pieces, it’s really important to know whether what you’re dealing with is sterling or silver plate. Most North American pieces should be stamped ‘Sterling’ or ‘925’ and European often ‘800’ so that’s helpful. It gets a little trickier with British sterling because of the hallmark system they use. Hallmarks are a series of little square marks, but be careful because silver plate companies got smart early on and started using similar markings. Go to www.925-1000.com for more information.
Ask The Expert
Q – Should I add my child’s name to the title of my house to avoid tax in the future?
An awful lot of parents have added their children to the title of their homes without getting legal or accounting advice first. In fact, I’m amazed at how many people have done this, given the risks and complications. A reader wrote to me to ask about whether he should add his oldest daughter to his house title. I suggest that anyone who is considering making this move, or has already done so, should read this post for some food for thought. His question and my reply are below:
“I am in the middle of purchasing a residential property. Is there any advantage if I purchase in my name + wife’s name and eldest daughter’s name. My thinking is for future when we both are not here, then our daughter retains this property without any tax implications.”
When considering putting extra names on a title, it’s a mistake to focus on just one aspect of the transaction, whether that aspect is tax, probate avoidance or any other concern. You have to look at the bigger picture.
You have to realize that in adding your daughter’s name to your home, you are creating a huge risk to yourself. There are a dozen ways in which this could cause you to lose your home, or to lose a substantial sum of money to hold onto your home. If your daughter were to get divorced, her spouse could claim half the value of the house and if she doesn’t have the funds to pay this out, you could end up paying it yourself just to stay in your own home.
If you are like most parents, you will stubbornly believe that your daughter will never do anything that would negatively impact you. As a parent, I understand that faith, but as an estate lawyer I know how misplaced it is. There are things that could happen to your daughter accidentally that could cause you to lose your home. For example, if she is sued because of a car accident or if she declares bankruptcy or if she has a business failure for which she has provided a personal guarantee, you could lose your home. It’s impossible to say at this moment that none of these things will happen during your lifetime.
You also need to look more closely at your presumption that your daughter will “retain this property”. It sounds as if you have more than one child. If you have a will that leaves your estate equally among your children, you have to ensure that you are clear about whether this house is part of her share. Otherwise it could lead to a dispute among the children.
You may run into the issue of inter-generational joint property. From what you’ve said, your intention is not for her to own the property but simply to avoid tax issues. Therefore it isn’t a “true” joint ownership in the sense that you don’t intend for her to own and retain this property for her own use after your death. Your property may be held in trust for the estate until a judge decides on the available evidence whether or not this is a true joint ownership.
Now, to your question about tax implications. If the residential property was owned just by you and your wife, and it was your principal residence, there would be no tax anyway when the property was sold or transferred on your death. So you aren’t avoiding any tax by adding your daughter’s name.
If it’s not your principal residence but is a second property such as a cabin, revenue property or simply a second family home, then there is going to be capital gains tax on its sale or transfer (assuming that it increases in value) even if your daughter’s name is on it.
Let’s say that your daughter is single now but gets married, and she and her husband buy a home. You may one day decide to sell your house either because you want to move somewhere else or because you are going to live in a care facility. As your house won’t be her principal residence, her share of the transaction will be taxable.
The best people to talk to about taxes are accountants. If you have a chance to discuss this transaction with an accountant, I think that would be a good idea.
Recipe of the Month
1 lime, juiced
2 cloves garlic, minced
1 tsp cumin
1 tsp chipotle chili powder (or regular if you can’t find chipotle)
1 whole chipotle, minced
2 cups spinach
1/2 cup chopped cilantro
2 cups shredded mozzarella cheese
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Seniors Fitness Tip
TAKING THE FIRST STEP
By Karl Knopf, Ed.D.
The following are answers to some commonly asked questions by older adults poised to embark on the trail to health and fitness.
Q. What is the secret to a satisfying retirement?
A. Most gerontologists agree that in addition to doing something that is both mentally and emotionally rewarding, following a sensible and regular physical exercise program is the key. If exercise could be packed into a pill, it would be one of the most widely prescribed medicines in the world.
Unfortunately, although most Americans know that aerobic exercise is important for improving cardiovascular fitness and for losing fat, many neglect to stretch daily or to perform the two to three days per week of strength training that it takes to become truly fit.
Also, most people don’t stay with an exercise program long enough to enjoy the benefits. Instead they start out too hard, get sore and quit, then later feel guilty for quitting and start up again too hard __ and the cycle repeats itself!
It may help to know that in the fitness game, slow’n’steady wins the race!
Q. But I haven’t exercised in years. Isn’t it too late to start now?
Today, just as gender, social class or ethnic background does not preclude a person from enjoying and succeeding in sports or physical activity, neither should a person’s age. Middle_aged persons should keep in mind that a fit 70_year_old who has remained active can be as strong as an unfit sedentary 30_year_old. In fact, an active person will decline physiologically only by about 1/2 percent per year compared to an inactive person who will decline by about 2 percent.
If you are deconditioned, a rejuvenating exercise program can be tailored to meet your needs through modification and adaptation. Gaining access to the exercise “Fountain of Youth” is not very expensive, nor is it a painful process. For many, it is actually quite enjoyable. Remember, age is a state of mind!
Q. How many minutes per week should I exercise?
A. The optimal amount of time varies among individuals. It is dependent upon many factors such as type of activity, intensity level, and your goals and abilities.
Some interesting findings have surfaced from research conducted in recent years which suggests that more than 300 minutes of vigorous exercise per week may be counter_productive for many participants. Of course, there are various possible explanations for this. The bottom line is: More is not always necessarily better. Everything in moderation is the key to good health.
Q. How can I stick with my fitness program?
A. Most persons who drop out of exercise programs do so because they are not having fun. People will repeat those activities that are enjoyable.
It is not enough to know the benefits of maintaining a healthy lifestyle. If it were, no one would smoke or drink to excess. People cling to unhealthy habits because they provide security and comfort.
It follows that exercise, to be healthful, must be something that bears repeating. Therefore, we need to seek out physical activities that we will experience as pleasurable and satisfying. Many folks find that cross training __ that is, engaging in several different types of exercise activity each week __ helps them to maintain their enthusiasm. Some say they started exercising for wellness reasons but stuck with it for the friends they met, the improved self_esteem and extra energy they gained, and, yes, the fun they were having!
Remember, the benefits of regular exercise may not show up overnight like plastic surgery. But if you really pay attention, you will see some changes very quickly!
The little old couple walked slowly into McDonalds that cold winter evening. They looked out of place amid the young families and young couples eating there that night.
Some of the customers looked admiringly at them. You could tell what the admirers were thinking.
“Look, there is a couple who has been through a lot together, probably for 60 years or more!”
The little old man walked right up to the cash register, placed his order with no hesitation and then paid for their meal. The couple took a table near the back wall and started taking food off of the tray.
There was one hamburger, one order of french fries and one drink.
The little old man unwrapped the plain hamburger and carefully cut it in half. He placed one half in front of his wife. Then he carefully counted out the french fries, divided them in two piles and neatly placed one pile in front of his wife. He took a sip of the drink, his wife took a sip and then set the cup down between them. As the man began to eat his few bites of hamburger the crowd began to get restless. Again you could tell what they were thinking.
“That poor old couple. All they can afford is one meal for the two of them.” As the man began to eat his french fries one young man stood and came over to the old couples table. He politely offered to buy another meal for the old couple to eat. The old man replied that they were just fine. They were used to sharing everything.
Then the crowd noticed that the little old lady hadn’t eaten a bite. She just sat there watching her husband eat and occasionally taking turns sipping the drink. Again the young man came over and begged them to let him buy them something to eat.
This time the lady explained that no, they were used to sharing everything together.
As the little old man finished eating and was wiping his face neatly with a napkin the young man could stand it no longer. Again he came over to their table and offered to buy some food. After being politely refused again he finally asked a question of the little old lady.
“Ma’am, why aren’t you eating. You said that you share everything. What is it that you are waiting for?” She answered, “the teeth”.