Pokemon cards on display for sale at a shop in Tokyo, June 19, 2023. Unusual assets, which can include anything from a fine wine or art collection to a Pokemon card collection, can mean a lot – financially and sentimentally – to those of us who cherish them.The Associated Press
A baseball-card collection or bitcoin wallet may not be the asset that’s top of mind for someone planning their estate, but without any foresight, these unusual items have the potential to cause a uniquely large headache for their inheritor.
Unusual assets, which can include anything from a fine wine or art collection to a Pokemon card collection, can mean a lot – financially and sentimentally – to those of us who cherish them. But without their value clearly outlined in a will or note to next of kin, it can be difficult for loved ones to decide the fate of items left to them.
These assets are part of a colossal financial shift, coined the “great wealth transfer,” currently moving from Canadian baby boomers to their younger Gen X, millennial and Gen Z heirs. According to CPA Canada, the umbrella organization for accountants, this $1-trillion of wealth is expected to be the largest generational transfer in Canadian history.
But it may not always be clear to an inheritor what they’re supposed to do with some of the more unusual assets that come into their possession.
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Annie Chen, a partner in the trusts, wills, estates and charities group at the law firm Fasken, said the first step someone should take if they inherit an unconventional asset is to determine what it’s worth.
Occasionally, non-traditional collectibles hold unexpected value, but if it’s not obvious to the inheritor, Ms. Chen said, they are often given away or disposed of. This is particularly important for executors of wills, who have a legal obligation to ensure such assets are secured and their value is realized.
Seeking an appraisal from a professional or searching for a similar asset on online forums such as eBay are good ways to determine if the item holds any monetary value, Ms. Chen said. Sentimental value is another factor an inheritor may want to consider when deciding what to do next.
“If they do decide to sell the item, then again, it’s about doing the proper research, finding an appraiser or a professional who deals with that type of collection to be able to assist them,” she said.
This process can be painful or painless, Ms. Chen said, depending on how much work was already done by the person whose estate it is. On their part, planning is key.
A clearly defined list prewritten by the deceased person that details all their assets, ideally with photos attached, can save families a lot of strife when dealing with a loved one’s estate.
“It can create disputes and arguments between family members if it’s not clear what that person’s intention was for these objects,” Ms. Chen said.
Highlighting the value of each item or leaving instructions for executors about where they can go to find out more about the asset can be helpful, Ms. Chen said. Even communicating this information clearly with loved ones before it’s too late can be a nice way to share the joy someone may feel about their collection with its inheritor.
These conversations are also a good opportunity to ask beneficiaries if they actually want these assets, said Zach Murphy-Rogers, a partner in the estates and trusts group at Clark Wilson LLP.
“Most of the time, the intended recipients don’t share the same passion for whatever it may be that the deceased person did,” he said.
If the inheritor shows genuine interest in a particular asset, Mr. Murphy-Rogers said, the owner of the item should consider gifting it to them in person while they’re still alive, so the owner can witness the joy the recipient derives from it.
Otherwise, expensive assets run the risk of getting caught up in estate litigation or family drama, which could affect whether an intended recipient ends up with a particular asset, he added.
“If you give it to them while you’re still living, you can have some more certainty. You can not only see the joy on their face, but also ensure that it gets into the right person’s hands,” he said.
In this digital age, Ms. Chen said, unusual assets people need to consider while estate planning or writing their will are evolving to include things such as bitcoin, rewards points and passwords for social-media accounts.
“Not everything can be passed on, it depends on the fine print and the details around that program. But these are some of the other items that people don’t think about and can become challenging to deal with,” she said.
Mr. Murphy-Rogers recommends using a digital password manager and then passing on the singular code needed to unlock it to an executor or family member. Storing the long character key, or token, needed to unlock certain digital assets, such as bitcoin, with an executor or within a will is also a good idea, he added.
“If someone does dabble in these things, thinking very critically about how their executor or how their family is going to access their digital wallets or digital currency collections is very important,” he said.
