When it comes to developing an estate plan, you likely think of documenting your wishes for assets such as stocks, jewelry, homes, and business interests. But what about more unusual assets — such as a herd of horses?
“An often-overlooked asset in estate planning is your animals,” says Jaclyn Smith, a Private Wealth Planning Director at Wealth & Investment Management, Wells Fargo Clearing Services, LLC. “It is not uncommon for a client to assume someone will take care of their animals in the same way they did, but in reality the people inheriting animals may not know what to do with them, may not want them, or may not have the resources to care for them. This could result in the animals being neglected or sold to the highest bidder, which is an outcome the owner may have never wanted.”
In the case of the horses mentioned above, however, the owner had created a well-thought-out estate plan that took into account both the animals and their heirs. The owner had a conversation with several possible caregivers before determining who should inherit the ranch with several horses and had set aside enough liquidity to help provide for the horses’ well-being as well as support those entrusted with their care.
Smith says that smooth transitions such as this are the result of carefully reviewing an estate plan to help make sure nothing gets overlooked — whether it’s living things, such as pets or livestock, or other uncommon assets. Here, she shares her top considerations when it comes to seeing that your wishes are fulfilled and that your unique assets get the care they deserve.
Before you put any details into your estate plan, take time to think through all the potential issues associated with each asset. For example, would that faraway vacation home be difficult to maintain? Are you leaving enough liquidity for your heirs to properly care for it over time? What if only one heir can really use it while the others cannot? Will that create unnecessary friction in the family later?
“Your estate planning attorney, tax advisor — especially one with specific experience in the area of unique assets, and wealth planner can help you identify possible risks associated with your unique assets,” adds Smith. “Once you have identified the risks, you can together create a detailed plan to address those risks as well as communicate that plan with your heirs to help make sure everyone is on the same page with those solutions.”
Family members who receive assets, whether unique or common, often want to honor the wishes of a loved one who has passed away. But in the case of unique assets, beneficiaries sometimes don’t have the finances or skills to maintain those valuables, which may end up getting sold quickly for a fraction of their value. “Even the most well-thought-out and communicated plan can encounter a roadblock, and this is especially true when planning for expensive and unique assets, such as a multimillion-dollar art collection. Having a contingency plan can be essential in these cases,” says Smith.
Digital assets, including multimedia files (including photos, music, and video), copyrighted materials, and credits in customer-reward or frequent-flier programs, should be part of your estate plan. Also include digital assets such as social media accounts and content.
“It is crucial to discuss assets such as a social media account that receives revenue based on followers with an intellectual property attorney to understand the best way to help protect and preserve the value of these assets upon your passing,” Smith says. She also recommends speaking to your estate planning attorney, who may suggest adding a fiduciary authority to the will or trust to help preserve digital assets upon death.
At a minimum, having a plan for your digital life after death could help safeguard your estate from fraud, identity theft, or other potential misdeeds.
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Wealth & Investment Management (WIM) offers financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Bank products and services are available through Wells Fargo Bank, N.A. Wells Fargo Trust is a part of WIM and offers services through Wells Fargo Bank, N.A. and Wells Fargo Delaware Trust Company, N.A.
Wells Fargo & Company and its affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.
Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.
