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”.
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.
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.”
Documentation is critical for your peace of mind and collection.
Regardless of the size of your train collection, having an inventory is essential for many legal reasons. You want to safeguard your collection for not only your heirs but for your insurance company and you Will. Having an detailed list of items allows for realistic values and appraisals should the unfortunate happen. An accurate inventory will also decrease any issues with probate or family members dealing with the collection as well.
We don’t recommend that you take on the task of inventorying and appraising the collections unless you can. However, we can assist you and your family with the following regarding your collection:
2. Creating The Inventory:
Having a written, electronic, or video recording of your collection is the key to preserving you collection and its appraisal. This is an important step in estate planning and provides a legal description of your assets in creating the basis for valuing the collection.
3. Seek consultation and valuation:
Professional train collectors and dealers work with countless others that are in your shoes. While many may not have a detailed listing of assets many professionals are more than happy to provide a rough value of your assets. Should you have an inventory the work is 95% done. However, if you are many you may need help in getting assets together that may include a model railroad. We are more than happy to provide a free valuation of your trains to assist with estate planning. If you don’t have an inventory and you have a larger collection, we can provide on-site services and provide you with an electronic inventory.
4. Sell, Donate or Auction…The Choice is Yours:
You have collected your items that make you the best person to make that decision. As mentioned, there are a lot of reasons you must keep, sell or donate; and you can do all three. We can assist you in deciding by an informed consideration. We can offer you all three options for selling trains. We can also help in removing the model railroad table as well. We offer our in-house sales via a brick-and-mortar train store, online sales through our e-commerce store or via our auction services.
Our auctions are offered with bidders to attend in person and on-line. This not only increases the number of bidders but also the potential selling cost by the number of competitive biddings.
1. Should you wish to relinquish the estate immediately we can make a cash offer or sell them via a consignment agreement.
2. Choose the Dealer ahead of time: We can never know when that time will happen when you suddenly find a garage or basement full of trains and without its passionate owner. However, you may find comfort in knowing where he/she purchased the trains or where professionals exist to give you assistance. These times are not only a grieving period but also a time of anxiety of liquifying assets. We always welcome phone calls to begin the question, “Where do I start?”
3. Provide Final Instructions: Detailing your final instructions and desires in liquidating assets should be a structured and detailed process to help you and your loved ones with your collection:
4. Be sure to call professionals that deal with trains on a regular basis.
5. Be sure to write down your local train dealer/professionals and include their contact information.
6. Choose what items you want to keep, donate, sell or send to auction.
7.Be sure to remind family members where they can find your inventory and appraisal regarding the collection. If you choose our company your family can call, and we will provide them with the documents.
8. Avoid organizations that provide only eBay sales offerings. Resellers exist in the market to only dissolve values to purchase your estate but then turn and re-sell the items on-line. Owning a hobby shop, e-commerce store and auction company with a state-of-the-art Ap for iPhones and Androids allows you to get the best return on your investment (ROI). This may take a little longer, however it took you a little while to collect.
Your inventory helps everyone involved in handling your estate:
- Your Inventory List will be a document in the Will or Living Trust and will be part of the legal description of what is to be passed to your heirs.
- Our company will use the Inventory List to determine a valuation.
If you have an existing inventory this will expedite the sale or consignment process. Again, keep in mind that having a good inventory will not only give you peace of mind regarding your collection, but also assist you family in what to do in the evening of a situation. This inventory also assists in losses associated with fire, tornado or even water damage.
This is just a few ideas in helping you create an inventory list Here are our tips for developing and maintaining an Inventory List:
1. Use our easy to download template: We offer several ways to create an inventory by either using our on-line system and/or downloading our document. Our systems are designed for large and small collections and easy yet detailed spreadsheets to include a make, model, scale, reporting number, road name and description. Ideally, all parties want as much information possible to make an informed decision when finding new homes for your items.
2. Be as detailed as possible: Being detailed about your collection enables buyer to resource items that may be presented at our showroom or auction house in a preprinted catalogue. This catalogue will provide everything the buyer needs to make a sound decision. In addition, our team will then take the information and provide detailed condition of your collection using the Train Collectors of America (TCA) Rating. You will want to include make/model, scale, condition, original box availability/condition, sound system, customization and more when they estimate the value of an item.
3. Preserve Original Digital and Hard Copies: As with any estate planning it is highly recommended that you keep both a written and digital copy of your documentation. Our consignment agreements are typically completed via email and electronic signature for easy storage. However, we also make copies of written documents and store client information for a period of time.
Estate Planning Checklist Recap
Your estate is your life and your investment To ensure you interest (fiscally/legally) we recommend the following in your Estate Planning:
- Don't wait too long to get started. Reach out and let us help if needed.
- Consult your attorney or retain a Probate Lawyer
- Complete and Inventory list
- Be as specific as possible in completing the inventory
- Always keep digital copy and/or hardcopies
- Take photographs of your collection and your model railroad
- Invest in a valuation by allowing our company professional team to assist
- Choose the dealer and selling method ahead of time
- Leave detailed instructions in the Will
We thank you for taking a moment to consider our company’s service and resources. We hope that this guide has been information has provided you a bases to help you begin organizing or considering the disposition of your valued assets. Please feel to Contact Us should you have any additional questions with Estate Planning Guide or removal of your custom model railroad.
American Eagle Rail/onlinetrainauctions.com