Major Car Collections

[lrlforfun]

OK Buick People: I recently heard of a man who's Father passed leaving him with several collector cars as part of the estate. He claimed that he had to sell them in order to pay the government the tax due. My question is, does anybody know how people handle these type matters? I for one have lots of cars and I have no idea of how these matters are handled. Thanks, Mitch

[jscheib]

Mitch,

I guess you are referring to Estate Taxes. If you have a sizable collection you should have a sound financial plan that will determine what will happen to the cars. And, if I am not mistaken, CA has a high estate tax in addition to any federal tax.

I think you need to discuss an estate plan with a lawyer and accountant, now rather than after a death.

John

[Guest BJM]

Maybe that is one reason so many of the next generation hold auctions and dispose of the estates. It's much easier to determine taxes on cash I would think, then taxes on a collection. Having said that, I am familiar with an estate in Ames, Iowa where the father passed away and at least one son is keeping the collection going with maintenance and storage. However, the mom is still alive, although in a nursing home. I know the collection is worth at least $3,000,000 and maybe more. If mom passes, then do the son's (or heirs) want to pay, what, a 40% tax on vehicles pretty much out of their pocket? Probably not.

[NTX5467]

From what I've heard on some financial planner radio shows locally, the estate tax issue might hinge upon some of the wording in The Will, if the word "Beneficiary" is used rather than something different? There can also be living trusts set up for the passing of estate properties/assets, too, where ownership changes and that's all. Or a corporation could be formed by family members, with "the corporation" owing any assets and "officers of the corporation" being family members who are caretakers of the assets.

From time to time, I've seen some vehicle repair orders come through the dealership with "________ Family Trust" on them. I suspected "the trust" purchased the vehicle and that's how it was titled, but I don't know if a vehicle can be titled to a trust, per se, but if it can be titled to a corporation, I guess it could be possible to do it with a trust . . . with certain "agents" designated for said trust.

"Getting ahead" of the estate situation is much better -- period!

Just some thoughts,

NTX5467