Estate Planning Answers for 'Hard' Assets Like Art, Heirlooms
Splitting up money is easy. Splitting up an antique car or a vacation home isn't. And unless you plan ahead by answering these three questions, your family could be in for some strife.

As the baby boomer generation approaches one of the largest transfers of wealth in U.S. history, many people are focusing on how to facilitate the flow of their assets to their children, grandchildren and great-grandchildren.
While passing along more liquid assets like stocks, bonds and cash can be straightforward, “hard” assets like property, art and jewelry are not always as simple. Since families rarely keep a comprehensive inventory of these assets, their value may be outdated or unknown, and family members may have different expectations of how to handle them. Additionally, many families don’t know how to discuss them with their heirs.
As a result, hard assets are often completely overlooked — in spite of their potential value. Like with liquid assets, illiquid assets require a formal plan that begins with conversations between the family decision-makers, financial advisers and oftentimes outside appraisers. To kick-start the illiquid assets distribution discussion, here are three key questions to answer.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How much is it worth?
Regardless of whether you want to pass down the asset itself or any profit from the sale of that asset, you must start with its fair market value. This is the foundation for any plan, because it attaches an actual, current number to an item that has almost certainly changed in value over time.
For example, take an individual with a collection of jewelry valued around $10,000 at the time of first appraisal. Over 20 years, the value of that collection grows — putting it in the range of $40,000 — as our collector nears retirement. It’s not only critical to understand the collection’s true value to update important insurance coverages, but also to ensure estate planning decisions are made with the most accurate information.
When it comes time to get an asset appraised, find an experienced, accredited appraiser. Especially when it comes to artwork, there are many seemingly free options for valuing your collection. But the financial risk of mispricing your assets could be significant. Don’t rely on online art price guides, advice from your aunt who was once a painter, or even the original seller — who may have a conflict of interest.
Instead, find an appraiser who has been certified by one of the three main accrediting bodies: the Appraisers Association of America, the American Society of Appraisers or the International Society of Appraisers. Especially for large collections, the cost of the appraisal is worth understanding its true value, and how that value will impact your estate.
Who wants it?
Beyond actual monetary value, it’s important to consider the emotional or sentimental value of your hard assets. While your family heirlooms may carry substantial weight in your mind, your children may have stronger attachments to the family’s vacation home where memories were made.
If multiple heirs are vying for the same asset, you’ll need to figure out if and how it can be divided. If it cannot be split, you’ll need to plan for how to equitably divide other assets. If some, but not all, of your heirs want to keep the asset, it might be more effective to create an equitable buyout situation that transfers ownership to the heirs who want it.
Also remember that the market for assets like artwork is cyclical, so timing may affect the attractiveness of a sale. Take the case of an individual who inherited a collection of artwork from his parents. The artist was a family friend, and the heir knew the collection was valuable — but not sure of its exact worth. At the time, the artist was quite popular, and an appraiser found the collection to be far more valuable than expected. In this case, the heir was able to capitalize on a hot market to sell the collection and walk away with much more liquid assets.
How can it be passed on?
You have a number of options for passing on illiquid assets. In most situations, the best choice is to allow an heir to inherit the asset itself. Illiquid assets receive a step-up in cost basis that alleviates some of the capital gains tax burden even if the inheritors sell it. You can also put the asset in a trust, family partnership or LLC and formalize the transfer of ownership in a tax-efficient way, while also saving on future estate taxes. As a last resort, if you don’t feel like your heirs understand the asset enough to sell it for a fair price, you can opt to sell it yourself, pay the appropriate taxes and gift the cash.
Conversations about illiquid assets can become emotionally charged, so many families choose to push off discussions about how certain items will be handed down. But disregarding these potentially valuable assets can create both legal challenges and also family conflict in the future. Discussing these questions will put you and your family on the path toward a comprehensive plan, which financial and legal professionals can help execute.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Grant Rawdin is Founder and CEO of Wescott Financial Advisory Group LLC. He founded the firm in 1987, which grew from the tax, business and estate services he provided to clients at Duane Morris LLP, a venerable AMLaw 100 law firm. Grant is an attorney, an accountant and a Certified Financial Planner™ and has served as adviser to many businesses, providing strategic, ongoing, and M&A advice. Grant and Wescott are recognized as leading the investment and financial planning industry in innovation, growth and size.
-
Could a Golden Visa Be Your Ticket to Retiring Abroad?
Trump and DOGE are weighing a U.S. "Gold Card" that would let the wealthy emigrate to the U.S. for a fee. But golden visas have been around for years worldwide. Here's how they work.
-
Running Out of Money in Retirement: Nine Steps to Reduce the Risk
Quit worrying about money and enjoy a carefree retirement. Sounds good, right? Well, if you follow these nine steps from a financial adviser, you could be on your way to that goal.
-
Running Out of Money in Retirement: Nine Steps to Reduce the Risk
Quit worrying about money and enjoy a carefree retirement. Sounds good, right? Well, if you follow these nine steps from a financial adviser, you could be on your way to that goal.
-
I'm a Financial Planner: Here Are Five Lesser-Known Ways to Avoid Estate Tax
The clock is ticking on the estate and gift tax provisions in the Tax Cuts and Jobs Act, so the sooner you act on removing assets from your estate, the better.
-
Is a Silent Wealth Killer Stalking Your Retirement?
Poor tax planning can drain your retirement of tens or even hundreds of thousands. Stop the bleeding with a laser focus on tax efficiency.
-
Put Time on Your Side With This Simple Retirement Strategy
A financial professional recommends thinking in terms of three financial stages — active years, slower-paced years and later years — assigning each one a unique bucket of investments.
-
Five Opportunities if You're in the 2% Club in Retirement
If you're among the 2% of the population with both a pension and $1 million or more saved, you're in a unique yet complex position as you approach retirement.
-
I'm an Insurance Expert: This Is How You Get the Right Insurance Coverage at the Right Price
First, you have to know what you want and ask the right questions of the right professional. This insurance pro explains exactly how to do that.
-
Four Tips for Mastering a Financial Security Mindset
This financial professional's mom helped him learn that financial security is more than making money — it's about cultivating a mindset that will help you stick to an investment plan even when times get tough.
-
Lessons to Be Learned From a $1 Billion Divorce
An estate planning attorney notes that an oil executive’s billion-dollar divorce could have turned out very differently if the couple had a premarital agreement and the executive had used asset protection trusts.