Value of Assets - How Clear is the Picture?
A few days ago I briefly commented in my blog about knowing the value of one’s assets when completing an estate plan. As clear a picture as possible, it seems to me, is helpful to the testator.
One benefit is that being able to prove after death that the testator knew the nature and extent of his/her assets will help in claiming the Will is valid.
A hypothetical scenario may be helpful to imply some of the seemingly endless issues which can arise: a testator wants basic equality among three children, with some caveats. The eldest child is to receive the cottage he and his children love so much. The middle child loves a painting whose value is understood to be very high, and which was bought for next to nothing before the artist rose to prominence but has never actually been appraised. The rest of the estate, mostly made up of the testator’s condominium, goes to a third child.
The testator is ‘pretty sure’ that makes for a fairly even division, and also that his/her estranged sibling’s claim that the cottage belonged to their parents who wanted it to go to the survivor of the two of them ‘won’t amount to much’. The testator has not considered tax and other consequences of transferring the various assets after death.
This scenario may well seem perfectly simple to the testator. However, to a solicitor it might not seem quite so simple. The tax consequences which arise regarding each asset could be very different. The values of real estate may have changed dramatically since the testator purchased it. Values of art, in my very limited experience, are quite difficult to assess with any certainty until the art is sold. The children's likes and circumstances may be different than the testator believes, or could change over time.
These issues are only the beginning...
Thanks for reading.
Sean Graham
