Disposing of Estate Property
Frugal to the End
How to Minimize Funeral Costs
Disposing Estate Property?
My father-in-law has taken an unexpected turn for the worst and we're going to lose him. He's in a rental house and we're at a total loss as to the best way to handle all of his belongings. We'll probably have to temporarily put everything into storage and will have to sell everything, but are wondering what would be the most economic way of going about it.
I've been told that you lose a lot when selling to an auctioneer. Is an estate sale a better way to go, and if so, do you have any pointers? Only two brothers are heirs to the estate and the estate isn't very large so I hope to help them in making the most of what they have. Thank you for any light you can shed on the subject.
Some Pros and Cons
These are tough choices to make when you are about to loose someone you care deeply about. Since there are only two heirs involved and no real estate property, it should be a little easier. One of the first things you need to check is if the two brothers will be responsible for the balance of the lease on the house. You probably need to carefully read the lease now. If you are responsible for the term of the lease, perhaps a phone call followed by a letter to the landlord may relieve you of this financial nightmare!
The next thing is if the brothers are in agreement, perhaps they could spend a day or so to remove those things which have sentimental value first and bring them to their own homes. Later, they can sort out what is valuable enough to resell, what can be given directly to some one with a need for a particular item, what can be sold at a tag or garage sale and what can be donated to a charity. The donations to a charity are tax deductible when doing the estate taxes so be sure to get a receipt. Remember that there are homeless shelters that would appreciate used blankets, sheets and other bedding. Soaps and other toiletries in their original containers are also appreciated.
Some would put things into storage, but what this does is create the work of moving things into a storage unit, the physical work and cost of storage are draining. Then, if you advertise items for sale, you have to travel each time to a storage facility to show the goods and often people don't show up, so you have wasted your time, gas money and another month of storage payments.
You have to weigh it all out and decide what fits best for your family situation. I pray that your father-in-law doesn't suffer greatly and that God will comfort you and the family during this most difficult time.
Estates Sales, Auctions or Yard Sales
I wanted to respond to the question about the difference between auctions and estate sales. I've been personally involved in an "estate auction" and been to lots of estate sales. And, then, there's the yard sale.
Auctions and estate sales are much easier on the people selling. Everybody pretty well knows how an auction works. Unless you tell the auctioneer that there are certain items that you will not take less than this amount for, you take what people want to pay. The auction firm should handle moving the stuff to an auction house or setting it up wherever. They handle all advertising and collect all the money. Can get really skinned on some items. Might make it up on others. They take a percentage, normally 10 to 20 %. And, an auction will be over in a few hours. Usually never more than a day.
Not real sure how an estate sale works but there are firms that will come into the house. You and they agree as to what items you wish to sell and I think you can set a bottom price on some of it. Very few items are moved. One thing I do like about estate sales is the fact that all household items are in the house and you get a better idea of the scale of big items. These agents handle the entire advertising, etc. They also collect a percentage. And estate sale can run for several days, maybe up to a week.
I think both of the above should give you a rough idea of what you can expect in the way of dollars. Sometimes "estate sales" are simply yard sales where "everything" goes. Yard sales can be fun but if you have a lot of stuff expect to work and work hard. Check out your local area. Go to a few auctions, estate sales and yard sales. Try to get a feel for what things are selling and what they are selling for. Are you comfortable with pricing items? Do you really want the work and hassle involved with handling things yourself?
Donate For Tax Credit
We had the same situation this past summer. My mother-in-law passed away and left her belongings in a rented apartment. What we did was to remove those objects and furniture that we wanted to keep. Then we donated the rest to a church. The church members came to the apartment and loaded what was left onto a truck. We received a nice tax deduction and knew that the furnishings were going to a good cause where they would be used and appreciated.
Options to Consider
If there is an imperative need to get rid of assets in an estate or a need for immediate cash, a need to convert all to cash to avoid a family fight over who gets what [Remember, there is no fight like a family fight - and that blood is thicker than water but it clots solid when siblings battle one another], or a need to avoid expensive moving and/or storage charges, sell all as a package to a dealer for the best deal you can get. Get at least three dealers to give you their offer. You are not going to get the highest price this way, but you get cash and no hassle.
If there are no problems as mentioned in the paragraph above, but the cost and hassle of administration of the estate can be a problem, then find a good estate sales person who can sell off many items and work on commission. You will have to find room for the estate items somewhere, but you will get more dollars. Stuff that is left over can then be sold to a dealer. You won't get much for this since the "good pieces" are probably gone already. Giving items away to a charitable organization can make good sense, particularly when the heirs accept the items in one hand and give it to the charity with the other. There is generally no tax advantage from giving assets from a small estate to a charity, but a gift from the heirs of items from the estate may result in a considerable tax saving for the heirs on their personal income tax if they itemize.
Calculator: How much life insurance do I need?
If time is not particularly crucial and there is no major hassle in handling the estate, distribute to the heirs everything they want from the estate. Get an estate agent to sell or manage the sale of items on a commission basis for sales and a fee for managing a sale. Some items may have special value in one geographic area and moving the items to that area may be wise.
For the highest dollar in most cases, sell what you can on Ebay piece by piece. Some stuff, particularly inexpensive abused furniture, old condensed books from Readers' Digest, Ronco household items over three years old, and exercise equipment should go to a yard sale on the way to the Salvation Army.
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