This is the third post in my blog series “Estate Mistakes”. So far, we’ve talked about heirs throwing away a fortune, and a married couple causing their heirs years of emotional pain and misery due to improper estate planning.

 

Now, I’d like to share a story about a retired couple downsizing from their large urban family home to a quite retirement community patio home. That, and all the money they wasted along the way.

 

Let’s call our couple Bob and Martha, just because.

 

Bob worked for a mid-sized equipment company for 35 years, the last 20 as a top tier sales executive. Bob made a lot of money. Not an obscene amount of money, but more than enough to live very comfortably.

 

Martha was a school teacher, and then a stay at home mom for several years. She spent her last 15 working years teaching English to native Spanish language adults. She tucked away and invested a significant amount of money.

 

When Bob and Martha finally retired for good, they decided that they no longer needed or wanted the large family home that they had lived in a raised their four children in. It wasn’t a mansion, but it was a rather large home in a nicer neighborhood.

They found a nice retirement community with small patio homes perfect for their needs. They sold the family home, put all of their excess belongings and furniture into storage, and moved into the retirement home of their dreams.

 

Fast forward ten years:

 

Bob has been having more and more health problems. First his eyes, then his back, and then his heart. Martha is doing okay, but she worries more every day about the increasing financial burden they are facing.

 

The insurance takes care of most things that Bob needs, but there is a lot that it doesn’t cover. Then of course there is only so much money in the retirement account. It’s tight at times with the house payment, utilities, food, and then there are the monthly fees on three storage units.

Three storage units! Martha can’t believe that they are paying so much for storage each month, and they still have a spare room and three closets packed full of things they don’t have a place for.

 

Five years on:

 

Sadly, Bob passed away just a few weeks ago. His heart finally gave out. Martha is now working with her oldest child to figure out what to do next. Clearly the house in the retirement community will have to go. Of course, that just means trying to find a way to store more things that she won’t have room for in her next abode. All that storage…

 

Six months later:

 

Martha finds a small efficiency apartment not too far away from one of her children and a two of her grandkids. It’s not much, but it will do. Of course, there is even more in storage now that she is having to pay for, but what is one to do about it?

 

A few weeks in to Martha’s new existence, her oldest grandson stops in to visit. Mike is 28 and newly married. He’s just moved back from Texas where he went to school, met his wife, and lived for several years. Mike and Martha talk for hours. Other than a brief trip home for his grandfather’s funeral, Mike has been away from the family for years. Mike wasn’t fully aware of all of the details of his grandparent’s lives since he was a teenager, and Martha is doing her best to fill him in on everything.

 

About an hour into their conversation, Mike stops his grandmother with a question. “Grandma, why have you been paying to store all of your old stuff for all these years?”

Puzzled, Martha replies “What do you mean? What else were we going to do with it?”

Mike asked his grandmother, “Why didn’t you just sell the stuff? Surely you could have used the money. You knew that you would never have a use for any of it anymore, and yet you chose to pay to store it. Why?”

 

Needless to say, at this Martha was dumbstruck. This was something that had never occurred to her or Bob. Two very smart people, and yet not aware enough to think about the long-term burden of assets stored vs. the value of assets sold. The thought of all the money wasted, all the money not realized and used for positive purposes. What a waste.

 

Over the next year, Martha rectified the situation and sold off everything and banked the funds. The additional money has made a significant difference in her lifestyle. She still lives in the modest apartment, but she no longer worries about money for the little extra things that may come along. She certainly no longer worries about paying those monthly storage fees.

 

I met Martha about a year ago. I was one of her last stops along the way of selling off her unwanted/unneeded possessions. I helped her out with a small, but valuable coin collection. Over the course of our dealings she told me her story. Sort of a cautionary tale from an elder to a somewhat younger man.

 

Downsizing, rightsizing, whatever kind of transition a family may go through, don’t let the baggage of the past weigh down the future. Turn those unnecessary, unneeded, and unwanted things into the money that is always necessary, needed, and wanted.

 

 

 

 

 

This is the second post in my blog series “Estate Mistakes”. In my first blog I talked about a recent encounter with a family that had literally thrown away a fortune, and worse yet, the woman that died poor and in need of better care all while having that very same fortune in her possession.

 

Tonight, I want to talk about an incident I was peripherally involved in several years ago with an elderly couple that died suddenly in an accident without having wills.

 

Well, that’s not totally accurate. They had wills, just not very good ones. His was the same one he had when his first wife passed away some 30 years earlier. Hers was a bit newer, her first husband had only passed about twenty years earlier.

 

I don’t have to go into too much detail for you to know that this was a chaotic situation. Never mind that the spousal situation was completely different. There were children named in one will that obviously were not in the other. The real and personal property listed was almost completely different for both of them when compared to their current situation. The terms regarding last wishes/arrangements were in complete conflict with one another. And in both cases, the person(s) named to be the personal representative for each person was already dead themselves.

 

Obviously, none of the details mattered. Absent any other agreements or instructions, the conflicting wills in a case like this pretty much automatically cancel each other out even if they had been reasonably current. In a situation like this, the Probate Judge steps in and starts making decisions on behalf of the estate to keep things legal and as reasonable as possible.

This is the worst of all possible situations for the family. It was especially bad in this case because the children and extended families of each person were not in any way friendly for reasons that were never made clear. Suffice it to say, there were a lot of lawyers involved in this mess, and it took years to resolve. And in the end, I’m sure no one was happy with the way it worked out. I don’t know the whole story about the outcome, but my understanding is that a very substantial estate was reduced to a pittance after all the legal fees.

 

So, kids the moral of the story is:

 

Have a will. Keep it current. Review and update it any time you have a significant life event; like say, marrying a new person  several years after your first spouse passes away.  

This is the first in our new series “Estates Mistakes”

 

This past weekend I had occasion to set up as a seller at the Myrtle Beach Gun and Knife Show.

I was there to sell a few coins, currency, and military collectibles, but mostly I was there to promote my Auction and Estate services business.

The weekend was a great success on multiple fronts, but instead of my glory, I want to share a sad story with you.

Early Sunday morning, I had a group of five come by my table. Two middle aged women, two twenty something women, and a twenty something man. They were fixated on two showcases of coins and currency that I had for sale. I noticed them and gave my usual greeting, and got nothing in response. After a few awkward minutes of silence one of the older women spoke.

She asked me plainly, and with something of a tone of despair, “Do you really sell these things for the prices you have marked on them.”

I replied that yes, I do, but of course I am like any salesman and we can negotiate.

She was seriously in a trance like state as she followed up with “So, what does a negotiated price look like, would it be ridiculously less than what you have these marked?”

I replied that no, I price my inventory at fair market value. I will negotiate, but I will not lose money on something just to sell it.

At this, the entire group visibly tensed and there was more than one audible groan.

I was unable to contain my curiosity at this point, so I asked what the problem or concern was.

What followed was a heart wrenching story about her grandmother’s death and the subsequent handling of the estate.

After seeing my merchandise, they were convinced that the great uncle, who was the designated person for the estate, had mishandled things very, very badly.

I tried to explain that you cannot look at one silver dollar, or one old bank note and assume that what you have is worth as much, or as little. It’s all about the date, condition, rarity, etc.

At this, the young man spoke up. “I have pictures of a lot of the stuff, if you’d be willing to look.”

I said that I would.

What I saw was only about ¼ of what the grandmother left behind. I was seriously blown away.

Forgiving the inaccuracies of amateur photography of coins, tokens, and paper money, what I saw was an unbelievable collection.

A full set of Morgan dollars, not the abbreviated Dansco album set, but a legit FULL set, yes 93-S in XF and all that.

A full set of Mercury dimes.

Two full sets of Washington quarters.

Multiple 2.5, 5, 10, and 20 dollar gold pieces across multiple varieties and years.

A 90% complete large size US currency type set in what looked like XF to uncirculated condition.

Multiple 10, 20, 50 and 100 dollar Gold Certificates from 1882 to1907.

Several high-grade Confederate States notes including all of the Montgomery notes.

After looking over the photos, I said that I was impressed. I said that it was an amazing collection and that if the rest of it was anything like this then they had a gold mine.

That’s when the emotions got real.

I was more than a bit confused at this point. I told them that, sure I had some nice items in my case, but nothing like what Grandma had.

That’s when one of the younger ladies spoke up.

“That’s the point” she said. “Everything was sold for less than anything you have in your cases.”

I was speechless at this.

We went back and forth for a bit more. Me trying to be sure that they understand what I have versus what Grandma had.

In the end, I was convinced. They got screwed over big time.

The saddest part of the story is that in her final years, Grandma was in seriously bad shape, and in need of advanced care. Sadly, without adequate insurance or money she had no alternatives.

If what I saw was only a portion of what she had, she seriously could have lived out her final days a hell of a lot better.

A seriously sad situation. Unbelievable!

This is why estate appraisals while a person is still alive are so important.

In this case Grandpa had put together an unprecedented collection, but everyone assumed he died broke. He left his collection to Grandma who didn’t know what she had, and when she died everyone assumed she died broke.

In the end, some seriously defective and morally compromised so called “coin dealer” took the family to the cleaners in an exponentially big way.

 

I’m working with this family to see if there isn’t possibly some recourse, but given what I know so far it isn’t looking too good. No one can seem to recall the name of the “dealer”.

 

This is just part one of Estate Mistakes, but if you take nothing else away from this series, let it be this:

 

Know what you have while you are living. Get an accurate and certifiable appraisal of your estate and keep it updated and current. Depending on your age, your potential heirs, and your long-term needs, you may want to seriously consider converting assets to cash for cash sake or to invest into equities. No one argue the value of cash or equity investments.

 

More to come on Estate Mistakes.

My first podcast. Just a few comments on collectible vs. investments. I hope you learn something from it, in any event, I’d appreciate your feedback, 

Thanks. 

Are your parents, your grandparents, or perhaps you at a transition phase in your lifetime?

 

What is a transition phase?

Here are a few examples:

• Moving into a new home
• Moving from a larger home to a smaller home
• Moving to a retirement facility or an assisted living facility

 

 

What do you do with all of the things that you no longer have space for? What do you do with the things you no longer want or need? what do you do with your art, antiques, collectibles, furniture and general household items that you just really don’t have the space for anymore?

 

It would be a waste to put them away a storage and then bear the burden of the cost of storing until the inevitable happens, which happens to all of us, when we pass on to that final transition.  Then everything is left for those who we’ve left with the responsibility to deal with all of those things.

 

A better solution to hauling and storage is to “right-size” your estate as you go through each transitional phase of your life.

Work with a professional and go through a thorough process of trimming down those things that you really no longer have a need for.

Turn those assets into cash that you can use to help fund your transition period, or to do some things that you always wanted to do.

 

If nothing else invest that money or set it aside so that when the final transition occurs, that money will be there to take care of any final expenses and/or to pass on to your heirs.

 

Working with a professional Auctioneer and/or Appraiser is your best option for right-sizing. They have the experience, the expertise, and the resources to help you minimize your “stuff”, while maximizing the money you receive for it on sales day.

 

If you would like more information, or to schedule a free initial consultation about right-sizing, please call or email us today.

 

803-427-2100

info@rossauctionserice.com