Traditional assets are generally the first thing one thinks of when it comes to estate planning with the most common assets being securities and real estate. However, one can often have "tangible items of personal property" which can be collections from rare wines to art to vintage cars to almost anything that can potentially be of value and later sold for profit.
Those uncommon investments or "passion assets" often can become problems that are more difficult to solve because those who invest in these assets have an emotional attachment to the objects themselves beyond their pure investment value.
Investopedia, in a recent article entitled "How to Handle Passion Assets in an Estate Plan," discussed how planning for these passion assets can be problematic. One key problem is determining whether heirs want to keep the items or want them to be sold. The answer to that question can make different ways of holding the assets better than others. For example, if heirs want to sell a passion asset, then holding it in an irrevocable trust can create a substantial capital gains tax liability. Alternatively, holding title directly can avoid capital gains taxes but can create estate tax issues if heirs do not also inherit enough liquid assets to pay the tax.
It is important to consult an estate planning attorney when you have common investments but passion assets can make it even more necessary.
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Reference: Investopedia (Dec. 17, 2015) "How to Handle Passion Assets in an Estate Plan"