Major assets are often addressed first in an estate plan. Who gets to own the family home? What happens to a life insurance policy? How do beneficiaries divide savings in bank accounts or investment earnings?
It is important to look at these valuable assets to determine how they should fit in the estate plan. But at the same time, it is also important to talk about items that only have sentimental value, even if their financial value is technically very low.
Having conversations in advance
In many cases, it is helpful for families to talk about items with sentimental value as early as they can. These could include things like a family boat, a set of dishes, a painting, a book collection, or other family heirlooms—like jewelry—that are passed down from one generation to the next.
There are two problems with sentimental value. For one thing, some items may not be worth very much, so there is no way for the beneficiaries to sell the items and divide the earnings. When two people want the same asset, they want that specific item, not the money that it is worth.
The second problem is that these items that have sentimental value are typically unique. They mean something because of the emotional connection, because of the childhood nostalgia or because of the child’s connection to their relationship with their parents. Because of these very specific reasons for the sentimental value, beneficiaries may not be happy with a “similar” item or another family heirloom—even if it’s worth more. This makes splitting up assets difficult.
Often, estate disputes center more around items with sentimental value than they do around big-ticket items like a home or a bank account. That is why it is so important to consider them from an estate planning perspective, to try to limit disputes and guide asset distribution for the next generation.