When Sharon called me, she sounded desperate. Her aunt had recently died and Sharon had been assigned to be her aunt’s estate executor. As a certified public accountant, Sharon was well equipped to deal with her aunt’s finances. However, when Sharon walked into her aunt’s house her initial confidence turned to despair; she had no idea how to evaluate or dispose of her aunt’s personal property.
Sharon’s fears are shared by non-professional estate executors everywhere. Walking into a decedent’s house for the first time, an executor has no idea what’s valuable, what’s junk, which relative is going to want what memorabilia, or how they’re going to get the house empty and prepared for sale. Personal property is the “800 pound gorilla” of an estate. Sorting through an estate’s personal property can be a stressful undertaking for someone new to the job. Dealing with personal property issues consumes most of an executor’s time and causes most of the aggravation.
When approached in an organized fashion and with the right mindset, estate liquidation can proceed smoothly and without stress. Let me offer 10 tips for staying sane and on track when it becomes your turn to supervise estate liquidation.
3. Assemble a team. You’ll need legal advice, financial advice, home maintenance (yard work, etc), and a personal property specialist (auctioneer, appraiser, or similar). Probate laws vary from state to state, so having reliable advisors is imperative. Sometimes, the advice you get online or from books won’t apply in your state. Know in advance who you will turn to if you have a question, and how much their solutions and/or advice will cost.
4. Do a walk-through of the house and property in order to get a general idea of what property exists. Take along an auctioneer or other estate liquidator; some will charge for this service, some won’t. The initial walk-through is to identify and list objects of special value: collectibles, art, tools, musical instruments, books, etc. Don’t forget to look in the yard and the outbuildings.
If you have identified items as being potentially valuable but you don’t want to pay for an on-site appraisal, there are a couple of places online that you can turn to for a ballpark value: Worthpoint and Walt Kolenda.
5. Be sure to identify titled property and property that might have a lien against it. A car title will indicate if there is a lien on the car, but a riding mower may have a lien against it even though it doesn’t have a title. If the mower was purchased with a Sears credit card for example, it may have a lien against it until the mower has been paid for. If you sell an item that has a lien against it, you will be responsible for the balance due on the item.
6. Get a reality check. Visit your local thrift store to get an idea of what used household goods are worth in your area. Ninety-five percent of an estate’s personal property is made up of consumer goods that can be purchased for pennies on the dollar at a thrift store. The amount the decedent paid for something has absolutely no bearing on what it will sell for. Be realistic about the prices you intend to sell for. You have nine months to file a Federal Estate Tax return, so it’s important that you get on with the job of selling and not try to squeeze every penny from the estate property. You need to get a fair price, not the best price.
7. Don’t be concerned about run-of-the-mill consumer goods; they can drive you nuts and waste a lot of time. The time and effort that it takes to catalog them and move them around is not worth the return you’ll get. Such items are the ones that you should donate. Often, local charities will remove items for free. Most large cities have haul-away services that will empty a house in return for keeping what they remove. If you think that this isn’t fair, try calling a moving company to see what they would charge to pack and move the contents of a house; chances are, it’s more than the liquidation value of the household goods.
8. It’s OK throw things away. Rent a dumpster. Use it.
9. Avoid disputes. If the members of the family feel entitled to some of the property but can’t decide “who gets what”, then have a closed family auction. Those who want the items the most will pay the most for them. In families where there is significant economic disparity, give everyone the same amount of Monopoly money and let them bid with that (or draw straws or arm-wrestle or whatever works).
10. Consign the remaining valuable items to a reputable auctioneer or estate company. Let them move the items out and send you a check when they are sold.
The above tips will get you started and help you to stay organized. Of course, each estate is different and these tips won’t work in every circumstance. You can find further information on selling options, appraisals and valuations, and how to take a detailed inventory on my website at http://www.waynejordanauctions.com. Much of the information there is downloadable and free for the taking.
Wayne Jordan is a Virginia licensed auctioneer, certified personal property appraiser, and accredited business broker. He specializes in the valuation and liquidation of estate and business assets. Learn more at his website http://www.waynejordanauctions.com, at 276-730-5197 or email@example.com.
More from Wayne Jordan
- Behind the Gavel: How to be the antiques dealer who knows something about art
- Behind the Gavel: Why the U.S. antiques trade needs a real national association
- Behind the Gavel: Inventory, Investment, and Perception
- Behind the Gavel: An antique shop owner’s exit strategy takes time and preparation
- Behind the Gavel: Worthpoint survey shows small antique shops must diversify
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