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How to cheaply establish FMV for jewelry?
Old 09-18-2020, 10:46 AM   #1
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How to cheaply establish FMV for jewelry?

Hi all.

I'm 51 and reasonably healthy, but am working on my estate planning.

I don't really have much stuff of value - I tend strongly towards minimalism. But I do have about 14 items that are either decently valuable or have family history that I want to specifically bequeath to my three kids.

I'd like to distribute these items such that (a) each kid gets at least one thing of mine that they specifically like, and (b) subject to the first constraint, the items are distributed so that each kid gets roughly equal fair market value in total.

On some of the items, I can find recent completed auctions on Ebay for very similar items, which I feel is a fair proxy for value.

Six of the items are jewelry which I inherited from my Mom. I just called a local jewelry store and they want $150 for the first item and $75 for each additional item to do what they call an estate appraisal, which is more than I want to pay.

Is there any cheaper or better ways to establish FMV for jewelry? I do have the insurance appraisal for one of the items, and I understand from the jewelry store that 25%-50% of insurance appraisal would be the FMV.

By FMV here I'm trying to estimate the dollars my kids could get if they chose to sell the pieces instead of keep them. So for jewelry, what they could get by consigning the pieces to a jewelry store.

Thanks for any suggestions.
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Old 09-18-2020, 11:25 AM   #2
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If the total value of the pieces is small compared to the rest of your estate that your heirs might inherit, does it really matter how equally in terms of cash value the jewelry is divided? Especially if family history is involved?
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Old 09-18-2020, 11:40 AM   #3
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I agree with audrey. Plus, maybe their tastes or circumstances will change. For example, a son might think a piece of jewelry would be great for his wife, but before you die gets divorced. Or thinking more positively, he is not married now but later does get married and his choices would totally change.

How about listing the pieces and stating in the will that they should divide them among themselves by whatever method they decide, or come up with your own method. I recommend listing them because my ex-MIL had a lot of jewelry when she died, but much of it "somehow" disappeared after two of her four kids went through the house first. But I saw this coming from a mile away.

My will states that I can have a list attached for personal property like this, so I don't have to update my will just because I want to change who gets a nice watch or whatever. So you could have them select the pieces they would want now, and revisit it if circumstances change, or it's been many years.

In any case, I'd put it on them to decide if they want jewelry that they'd really like, or what might have the most value if they want to sell.
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Old 09-18-2020, 11:41 AM   #4
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I would just ask each of them which items they might want. The answers may be different than your calculated results.
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Old 09-18-2020, 11:41 AM   #5
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Originally Posted by audreyh1 View Post
If the total value of the pieces is small compared to the rest of your estate that your heirs might inherit, does it really matter how equally in terms of cash value the jewelry is divided? Especially if family history is involved?
You're right; the total value of the 14 bequeathable items is probably less than 0.25% of what my estate will be, and the 99.75% will be divided equally in thirds.

I'd still like to be reasonably close, and if I have, for example, six pieces that the kids care about and 8 that they don't, I'd like to distribute the 8 to help equalize any FMV discrepancy created by the six as best I can.

It's surprisingly hard to balance my wishes, my kids' wishes, family history, and FMV. There are variations in each of those variables in each of the 14 items - so one item kid #2 might like a lot, but it's been in the family a long time, but it's got a low FMV, whereas another I might want to go to kid #3 but it's not been in the family a long time but has a high FMV. Maybe I'm overthinking it.

I think the key item that is the problem is that one of the items is probably the most valuable by a factor of 2 over the second most valuable item, and it happens to be an item I like a lot and my Mom specifically wanted me to have. It could be used as an engagement ring, and I suspect my Mom wanted me to get remarried and use it that way. I'm very unlikely to get remarried - sorry Mom! - but it's an item that makes me think I need to balance out in some way since it's very valuable and very sentimental.
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Old 09-18-2020, 11:42 AM   #6
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So for jewelry, what they could get by consigning the pieces to a jewelry store.

Thanks for any suggestions.
It's all going to be based on the weight of the precious metals, and the size/weight/carats of the stones.

If you want to do it very cheap/back of the napkin, then maybe look for a jewelers scale, and calipers, to measure and weigh each piece, and then you'd have to approximate for things that include both metal + gemstones.

Or take them all to a pawn shop and ask there - you'd at least then have a price for each, even if you think they are lowballing (they are) but a gauge of "piece A is X, piece B is 1.2 x X, piece 3 is 2xX" etc.

Unless they have monster diamonds in them, I think you're far better off assigning the pieces based on emotional attachment, and not worrying about resale value balancing. The child that should get grandma's ring is the one that would never part with it.

Personally maybe I'd take a picture of each item, make a little email catalog, send it to the kids and say 'who wants what', have them each rank their first 3 choices, and then divvy it up as best you can based on that.
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Old 09-18-2020, 11:47 AM   #7
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Originally Posted by RunningBum View Post
I agree with audrey. Plus, maybe their tastes or circumstances will change. For example, a son might think a piece of jewelry would be great for his wife, but before you die gets divorced. Or thinking more positively, he is not married now but later does get married and his choices would totally change.

How about listing the pieces and stating in the will that they should divide them among themselves by whatever method they decide, or come up with your own method. I recommend listing them because my ex-MIL had a lot of jewelry when she died, but much of it "somehow" disappeared after two of her four kids went through the house first. But I saw this coming from a mile away.

My will states that I can have a list attached for personal property like this, so I don't have to update my will just because I want to change who gets a nice watch or whatever. So you could have them select the pieces they would want now, and revisit it if circumstances change, or it's been many years.

In any case, I'd put it on them to decide if they want jewelry that they'd really like, or what might have the most value if they want to sell.
I can't have them choose a method, as each of the three of them has different views of what is even a fair divvying method, so it would create a Mexican standoff.

I could just delegate it to my sister executor, but that would seem mean to put her in that spot.

My state does have a "separate list" provision, where the main will just refers to the separate list and it is included by reference. That's what I'll be using, but I at least have to prepare the separate list with the items and who each item goes to now. Once I do get that set up it will be nice as I can do as you mention and change the list without changing my main will if circumstances change.

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Originally Posted by ut2sua View Post
I would just ask each of them which items they might want. The answers may be different than your calculated results.
I've done that already on some of the stuff, but it was a while ago. From what I can tell, mostly they don't want the same stuff. But not having done it exhaustively, I don't know if there's conflicts on the remaining items that I have yet to ask about.

Where there is a clear and uncontested preference, I've allocated those items to the kid who wants the item. The ones I haven't asked about I think I allocated according to who I wanted to have the item.
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Old 09-18-2020, 11:49 AM   #8
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It's all going to be based on the weight of the precious metals, and the size/weight/carats of the stones.

If you want to do it very cheap/back of the napkin, then maybe look for a jewelers scale, and calipers, to measure and weigh each piece, and then you'd have to approximate for things that include both metal + gemstones.

Or take them all to a pawn shop and ask there - you'd at least then have a price for each, even if you think they are lowballing (they are) but a gauge of "piece A is X, piece B is 1.2 x X, piece 3 is 2xX" etc.

Unless they have monster diamonds in them, I think you're far better off assigning the pieces based on emotional attachment, and not worrying about resale value balancing. The child that should get grandma's ring is the one that would never part with it.

Personally maybe I'd take a picture of each item, make a little email catalog, send it to the kids and say 'who wants what', have them each rank their first 3 choices, and then divvy it up as best you can based on that.
Good ideas, thanks. I'll probably do some combination of the above.
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Old 09-18-2020, 11:59 AM   #9
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DW retired as an SVP in megabank Investments and Trust. She occasionally brought home some good ideas she had seen in estates. One I liked was this:

Play some game to determine an order among the children, maybe just rolling dice. The first child picks something that they want from the estate items. From there the children proceed to take turns, each picking an item. Picking is continued as long as the items last. This approach has the advantage that you do not have to guess what each child might want and you do not have to worry about values, which in any case change over time.

This game would probably not work if there was one item that was wildly more financially valuable than any of the others, but if the values are all in the same general range then the picks will depend on sentiment as well as perceived value.
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Old 09-18-2020, 12:07 PM   #10
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Have your estate place all the items in a pile at that time your estate is distributed. No price on anything. Start a draw of one item each, starting with the eldest. Once distributed, they can exchange as desired. If truly these are sentimental items, the street value is of no meaning.

Otherwise a straw draw; put a tag of paper listing each item in the hat, draw straws to see who goes first, then pull tags. The kids can go from there horse trading or swapping.

BTW, my wife and her sister had some harsh words when my wife was given her mother's wedding ring after her death from her father. (She is eldest daughter). Then when he died, she was eldest child, her elder brother having passed. It was a military funeral and she was given the flag. Again her sister wasn't happy and let it well be known. My wife gave both the ring and the flag to her the next Christmas. It's just stuff and she felt not worth the drama. Just for that, I took her out shopping and got her an upgraded wedding ring of her choosing. We were married young and couldn't afford much then. She's really over the moon with her new ring!
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Old 09-18-2020, 12:14 PM   #11
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My mother put her jewelry (except her diamonds) in "lots" of approximate value and had each of us pick one that we wanted, she had 4 numbers we picked from a basket to see the order of who picked when--random, but worked.
When my Dad died, each of us kids took turns choosing things we wanted prior to the estate sale. We did random round robin, so each of us were first in at least one round. If two kids wanted the same thing, we talked it out. It worked well, luckily we all get a long.
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Old 09-18-2020, 12:27 PM   #12
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IMHO, Old Shooter's recommendation is the way to go, but I would have some idea on the value of the jewelry. When all the choosing is done, I would equalize things with cash. So the picking is all about sentimental value. So, if child A picks items equal to $1,000 and child B picks items equal to $1,500, you write a $500 check to child A.

You now have a somewhat fair distribution of both sentimental and financial value.
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Old 09-18-2020, 01:49 PM   #13
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IMHO, Old Shooter's recommendation is the way to go, but I would have some idea on the value of the jewelry. When all the choosing is done, I would equalize things with cash. So the picking is all about sentimental value. So, if child A picks items equal to $1,000 and child B picks items equal to $1,500, you write a $500 check to child A.

You now have a somewhat fair distribution of both sentimental and financial value.
Re equalizing, IMO that is risky unless all the children are in complete agreement on the exact value of every item. Example: Daughter #1 has a necklace that is pretty but not valuable. Give her $2K in equalization cast. Daughter #2 has a necklace that you judge to be $2K ahead of #1's necklace, so #2 gets nothing. #2 feels that her necklace is no more valuable than the one #1 has, so she gets mad and badgers #1 into splitting the $2K with her. Now both are mad.

I wouldn't even consider an attempt at equialization, but the good news is you won't be around to see how it goes. If you do go that way, though, make sure it is not a family member doing the equalization unless you also give said family member a bulletproof vest and a ticket to a new life far, far, away.
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Old 09-18-2020, 02:22 PM   #14
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It's all going to be based on the weight of the precious metals, and the size/weight/carats of the stones.

If you want to do it very cheap/back of the napkin, then maybe look for a jewelers scale, and calipers, to measure and weigh each piece, and then you'd have to approximate for things that include both metal + gemstones.

Or take them all to a pawn shop and ask there - you'd at least then have a price for each, even if you think they are lowballing (they are) but a gauge of "piece A is X, piece B is 1.2 x X, piece 3 is 2xX" etc.

Unless they have monster diamonds in them, I think you're far better off assigning the pieces based on emotional attachment, and not worrying about resale value balancing. The child that should get grandma's ring is the one that would never part with it.

Personally maybe I'd take a picture of each item, make a little email catalog, send it to the kids and say 'who wants what', have them each rank their first 3 choices, and then divvy it up as best you can based on that.
Unless these pieces are very unusual or very valuable, I don't think a pawnshop would be that lowball. The world is awash in used jewelry. A diamond has value but a ring in a very old style setting would most likely be worth the price of the diamond itself. Perhaps just pull that diamond out of the pile and see what develops as your kids grow up. Maybe one of them will show you an opportunity to recycle and reuse grandma's ring. Money aside, emotionally that would be a wonderful feeling for you and that child. Since you say the diamond is the most valuable piece that makes it easier to divide the other pieces without any rancor.

If an adult child wants to reuse the diamond in a new setting for a marriage you could just shoot them a pawnshop price and put that cash in your bank account or give other kids as they marry the same cash towards wedding costs or an engagement ring.
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