Model Railroad Estate Planning

Collections can come in all scales. From large to small we can assist in buying, selling, building, and moving them all. But what happens when your train pulls into the station and you’re ready to hang your hat up and retire? We are here to help you find homes or revenue for your collection.

Without an intentional estate plan, your property will be distributed by the courts based on Probate laws, which vary by state. In many states, the Probate laws dictate that your spouse and children will receive a share, which can attribute to unforeseen hardships for your family if they only receive a fraction of the estate. Essentially, assets you own will have to go through your State's Probate process before they can be distributed to your heirs. Between court rulings and unprepared paperwork, estates and/or their assets can be tied up for a lengthy period of time.
Estate planning essentially eliminates the unwanted burdens for all parties. The more organized you are the more comfortable you will be in know how you and your loves ones will know what to do when that time comes along (God forbidding).

Please note, we recommend you discuss your estate with a Lawyer and only use this information as a reference in estate planning.

Estate planning involves the creation of a “Will” or “Living Trust”.
The Will
A will provide your instructions, but it does not avoid probate. A will only directs how assets titled in your name and without a beneficiary designation or other governing contract will be distributed. The assets must still go through your state’s probate court before they can be distributed to your intended beneficiaries. (If you own property—usually real estate—in other states, multiple probations may be required, each one according to the laws in that state.) The process varies greatly from state to state, but it can become expensive with attorney’s fees, executor commissions, and court costs. It can also take anywhere from a few months to two years or longer. With some exceptions, probate proceedings are open to the public, and your creditors and any excluded heirs are notified of their opportunity to file for payment of a debt or a share of your estate. In short, the court system, not your family, controls the process and the timing of distributions to your beneficiaries.
Not everything you own will go through probate. Jointly owned property and assets that let you designate a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities, and certain other accounts) are not controlled by your will and usually will transfer to the surviving owners or beneficiary without probate. However, there are many problems with joint ownership and using these methods for estate planning. In addition, avoidance of probate is not guaranteed. For example, if a valid beneficiary is not named, the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably require guardianship until the child reaches the legal age of majority for the state, often between eighteen and twenty-one years of age.
Living Trust
For these reasons, a revocable living trust (combined with a pour-over will) is preferred by many families and estate planning professionals. Establishing and funding a revocable living trust can avoid probate at death (including multiple probates if you own property in other states), prevent court control of assets if you become incapacitated during life, bring all of your assets (even those with beneficiary designations) together into one plan, and provide increased privacy. Because trust is revocable, the instructions governing it can be changed by you at any time. The accompanying pour-over will is a backup measure in the event that any assets are not funded into your trust during your lifetime and provides that those assets should be poured over into your trust upon your death.
Unlike a probate, which will end at some point, a trust can continue long after your death. Assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age you want them to inherit or longer to provide for a loved one with special needs; to protect the assets from beneficiaries’ creditors, spouses, and irresponsible spending; or to provide for future generations.
An estate plan that includes both a living trust and pour-over will is not necessarily more expensive initially than an estate plan that only includes a will, but it is more likely to avoid fees and costs later, considering that a funded trust can avoid court involvement at incapacity and death.

Estate Planning can be somewhat intimidating and time consuming. However, with some preplanning and consideration your assets and contributions can be safeguarded:
As with any critical decision in your life requiring fiscal matters, always engage your general counsel or a Probate Lawyer. Probate law is complex and requires expertise to eliminate time and unexpected losses. Costs will differ between large and small firms. However, on average the typical cost ranges between $150 and $1000.

You have spent a considerable of time and money in building you model railr0ad empire and you need to make sure your assets are protected. You have met many good people along the way in the hobby and have likely accumulated an array assets. You may have encountered a friend, family member or organization that you wish to leave your trains too. Here are some matters you need to consider:

Do you want your trains to be used or sold?

How do you want your legacy remembered, continued to be used by others in a museum/organization or simply sold so that others can enjoy in the industry?

We have been dealing in model trains since the early 1980’s with family members working in hobby shops, building model railroads, running auctions, or working for the railroads. Either way, you can say that we have had a passion for railroading in all scales.
Considering how you deal with your rail empire can take on pros and cons that you need to ask yourself:
1. Do your family/heirs have any interest in caring for and dealing with your collection?
2. Does your family/heirs have a comfortable life that can benefit with or without the value of your train collections?
3. Do you feel that your trains would be better in the hands of those experienced who would continue operating them or in the hands of other collectors carrying on your passion in collecting or operating them?
Should you not be able to answer these questions the answer would be to leave the collection for others to enjoy. However, if you have an heir(s) that may want trains then it’s important that your heritage and memories remain with them. Again, there is no easy answer, but you know the old saying, “You can’t take them with you.”