A side benefit to an estate planning inventory: no clutter

Our previous two posts discussed that estate planning is a wonderful reason to inventory your personal property. Creating this document puts you in touch with what you own, really noticing everything you have in your closets, storage areas and even dresser drawers. Often, we continue to purchase items without the thought of getting rid of old ones. This collection of "stuff" goes unnoticed because they become part of the interior landscape, so to speak.

Creating an inventory will help you really look at your belongings and determine what you need to keep and what you might want to give away (or throw away). Creating an inventory is not just to focus on the value of items, but also to focus on the number of items.

Just a few things to consider. Do you still own:

• clothes and shoes you haven't worn in years?
• pots and pans and bake ware that you no longer use?
• stacks and stacks of plastic ware that are just taking up cupboard space?
• jewelry you no longer wear?
• knick knacks that are just collecting dust (and you really don't like them anyway)?

An inventory process can be a time to help you unclutter, so that those you leave behind will have fewer items to manage and deal with. And the immediate benefit is for you. When we downsized about 16 years ago, we really took this task seriously. Fewer items to dust, less furniture to trip over, closets that don't have items topple out when we open the door and neat, organized kitchen cupboards. Yes!

Who gets what, and who decides?

To detail all specific bequests of personal property in your will can be very burdensome on both you and your estate attorney. However, that task can be minimzed once an inventory has been completed because you can assign specific items to your beneficiaries.

In Indiana, this document should be noted in the will and kept with the will and/or trust. However, even if not incorporated by reference, the personal property inventory can be used as a record of intent to transfer items to the specific heirs. This will also allow any beneficiaries to dispute any other claims on the item. Unfortunately, we often see this happening between brothers and sisters as well as cousins, grandchildren and other relatives. Emotion can cause some very strange reactions, and an inventory can eleiminate these misunderstandings.

Do you have a:

• special piece of jewelry that you want your granddaughter to have?
• ring that was your father's, and you promised it to one of your sons?
• candy dish that is always full of your daughter-in-law's favorite chocolate?
• mantle clock your sister bought you, and you want your neice to receive?
• rocking chair you know your daughter wants to rock her grandchildren in?

From a family heirloom to a knick knack, and everything in between, there are special items you'd like to gift to a specific person. An inventory is the perfect document to create now, so you can identify these and any other sentimental and special items you want distributed. If the item is destroyed or given away prior to settling your estate, it can be crossed out, dated and initialed until you update your inventory.

What better way to identify who gets what, and know that you've eliminated questions, hard feelings and possible discord among family members.

A happy family can remain a happy family

Documenting your personal property during estate planning or for insurance purposes protects and preserves those assets so that they may be transferred to the beneficiary of your choice as described in your will, trust or other estate planning documents.

Unfortunately, some people take advantage of access to a person’s personal property during their illness or immediately upon their death. Items are removed, or stolen, before the personal representative, or executor, can secure the contents of the house and complete the inventory for the estate.

An inventory documented now will serve as evidence of what existed and help elimiate the chance that some items will disappear. Unfortunately, we see this happening often when we are called to document and estate. This frequently turns a happy family into one that is distrusting, hurtful and even to the point where their relationships are forever damaged. An inventory will help a happy family remain a happy family.

You're here for what, exactly?

We had an inventory scheduled this morning, and during our half-hour drive, Mike and I talked about how great it will be to re-unite with our customers since it's been about two years since we saw them last. I couldn't wait to hear how their businesses were growing and what's new in their lives. We arrived at their house located in a quaint little neighborhood on the south side of Indianapolis. A dog barked, birds were singing, we heard kids laughing. It was just another ordinary day for us. Until we knocked on the front door. Then things got a little weird.

The husband opened the door, knew we looked familiar (he saw Mike first, who is now 100+ pounds lighter), and said Hi-i-i-i-i-i-i with a questioning tone that supported the quizzical look on his face. He gathered his thoughts as recognition set in. A big smile practically took up his entire face and - whew - we felt better. Then, I can't remember exactly what he said, but it was basically, very politely, a "why are you here" type of question. "You're here to do an inventory? Of our house? Now?" Oops! His wife forgot to tell him about our appointment, and he was heading out the door to work.

A-W-K-W-A-R-D!

After a brief conversation, he gathered his thoughts and invited us in to do the inventory (we did offer to return a different day). A quick tour, a voice mail message to his wife, and he was on his way.

She and I spoke later this morning, and her biggest concern was that the house was not "ready" for us. No worries. We don't mind unmade beds and dishes in the sink - or anything else out of order, for that matter. What's important is that they now have their inventory. A little clutter or disorder won't matter to them if the need arises to refer to their photos - they'll just be happy they have everything documented so they can remember what they own and receive a maximized insurance settlement.

They now have peace of mind, and we have a new, happy customer! Life is good!

Where's the money coming from?

I've heard of a lot of thefts lately - items stolen from cars, homes and apartments. Whether people have enough (or any) insurance, most state they still replace all their belongings that were taken. So, if they are uninsured or underinsured, where do they get the money?

Unfortunately, the majority tell us they purchased new items with credit cards or by withdrawing funds from their 401(k) or other retirement account. Some used funds initially set aside for their children's college funds.

None of these methods of funding is financially advisable. So what can you do to minimize the need to do this? Not being able to remember - and often times prove - what all was taken is the number one reason people don't recover sufficiently. Having a document that lists and provides photos of all you own would be a good idea - faster, easier and a maximize claim. Three great reasons to document your belongings.

Other reasons to install a camera security system

Peace of mind. How do you achieve peace of mind? Our personal property inventory service offers that comfort to our customers. Once we’ve created their written report and taken the huge amount of photos, they know they’ll receive a maximized insurance claim and settle it quickly. This is because they won’t need to struggle to remember what they owned, since they now have a full record of their belongings in their portfolio, ready to hand over to the insurance company if the need arises. The same type of peace of mind is true with a camera security system.

Whether you’re away, traveling for business, vacationing, or even when home, you can now achieve that same sense of security for your family. Once only for the big mansions of the rich and famous, camera security systems are now affordable and available for just about everyone.

Let’s step away from the peace of mind issue for a moment, though, because that is the number one reason to install a security system - the desire to feel safe from intruders and burglars. However, there are other purposes this technology can serve.

One scenario that occurs frequently and is very frustrating to home-based business owners plays out like this: you’re in the middle of a huge project and the doorbell rings; you leave your office, rush through the house, and open the front door only to see the brown truck pulling away. He rang the bell, but didn’t wait for a signature. The only purpose for him or her to announce they were there was to let you know a package had arrived. Thus, this break was totally unnecessary. The same happens to busy at-home moms and dads and to the entire family on weekends. A monitor at the front door is such a time-saver!

A monitor capturing the back yard is another great way to know what’s going on. This camera will give you the option to stay inside, but keep an eye on the kids when they are outside. You can be cleaning, preparing meals, staying in with the younger children or working in your office, and still know that your children are OK. Do you have a pool? Another reason so have a security system monitoring what’s happening on your property.

Peace of mind, keeping tabs on the kids, knowing who is ringing your doorbell – all great reasons to install a camera security system. Technology has evolved by leaps and bounds over the past few years, turning these systems into very affordable, easy-to-install kits. Some are complete as purchased, while others have the option to add on additional cameras as the need – or your budget – expands. The cameras are quite small so they will not distract from your welcoming, inviting entryway.

Once you've decided to install a camera security system for your home, one big question remains: Which one? You can find camera security systems reviews for wireless and hard-wired systems, in a variety of price ranges, that are color or black and white, have only one or up to six cameras, and more at AllReviews.com.

Holy priceless collection, Batman!

In a blog post titled, "Wife Murders Husband to Inherit Batman Collection" on the Wills, Trusts & Estates Professional Blog, we learned that even Super Heros can bring out the worst in people - or at least a Super Hero Collection can.


This article states that Ben Novack Jr. was found brutally murdered a year ago, and last week, federal prosecutors indicted Mr. Novack's wife and three others for his murder. The motive? Greed.

It appears that Mr. Novack's estate was worth about $6 million and included the world's second-largest Batman-themed memorabilia collection.

Do you have a collection of superheros or any other collectible? If so, do you have an inventory? It would be a "super" thing to do! (Yes, we do that, too.)

Prenuptial agreements - a good time for an inventory

The Wills, Trusts & Estates Professional Blog recently posted an article titled, "Prenuptial Agreements as an Estate Planning Opportunity."  This article discussed the importance of prenuptial agreements and the fact that they are no longer just for the rich and famous - and actually have become more common among the baby boomer generation as an estate planning opportunity.

The econimic situation was the key reason for this increased awareness for pernuptials. Also noted was that when you get married later in life, there is a good chance that you ahve substantial assets and/or you have adult children from a previous marriage. This article admits that it isn't easy to talk about a prenuptial agreement with your future spouse, but that doesn't take away the fact that it is something you should do.

Here are some tips this article offers to make it more likely that a court will uphold your agreement:

1. Discuss and draft your prenup months before the wedding date. If a court finds that a prenup was signed under a rushed or ill-informed situation, it can choose to not enforce the contract.
2. Do not use fixed-dollar amounts. That strengthens arguments regarding inflation or the substantial decrease in property value.
3. Don’t hide any assets. If you do so, you lose credibility with your spouse and the judge.
4. Don’t include any provisions that violate state law or public policy because it won’t be enforced.

We here at Hartman Inventory suggest you make the task of listing your assets easier by hiring a 3rd party inventory service. You're preparing for a wedding, so taking time to list your assets could be a time-consuming task - one you might not be able to finish. Also, if each sonn-to-be spouse has their own inventory documented before the wedding, these separate inventories could be very valuable should the need arise to prove who owned what prior to the wedding.

How to know if your home's contents are properly insured

Yesterday's post discussed how your homeowner's insurance coverage is determined - for both the structure and the contents. Unfortunately, if you have higher-than-average belongings, it is possible that the normal percentage used to determine your coverage might not be sufficient. Or, as time goes by, you purchase additional, high-end items as your budget allows. You could be under-insured. So, how do you know? The best way to be sure is to create an inventory of your furniture, clothing, electronics, tools ... everything in your home, garage and out buildings - and the personal property outside as well, such as patio furniture, portable basketball goals, gas grill, etc.

Additionally, the inventory process will bring an awareness of items that should be appraised and/or placed on a “rider” or “scheduled” for individual coverage. Several personal property categories carry limits for coverage, i.e., jewelry, fine art, firearms, musical instruments, cash, etc., that need to be scheduled. For example, most policies place a limit on jewelry coverage of about $1600. If the value of all of your jewelry exceeds that limit amount, a rider will be required for you to recover sufficiently.

All policies are different. Be sure to talk to your insurance agent to learn exactly what coverage you have, if you are sufficiently insured and if you need riders to make sure that if or when you have to file an insurance claim, you'll be able to recover sufficiently.

How the amount of homeowner's insurance is determined

During conversations with our customers, we are finding that many people still aren't sure how their homeowners insurance coverage is determined.
Basically, your homeowners policy covers the value of the land, the price of reconstruction of any buildings, and items considered part of the structure. These would be items affixed or attached to the buildings, so they are considered part of the structure. This includes built-in appliances, carpet, most window treatments, built-in bookcases and cabinets, affixed lights, ceiling fans, furnaces, air conditioners, hot water heaters, garage door openers and tracks, etc.  Basically, consider what you would not take with you when you sell your house - items that would remain for the new owners.

It's easy to know how much you need to properly insure your house (your mortgage has that figure). However, your agent doesn't view your home's contents before drafting the homeowner’s policy. So how do you know you have the right amount of coverage for all of your belongings?

The insurance companies use a percentage of the value of the house to establish contents coverage. But what if your contents cost more than the "average" person? How do you know if you are properly insured? What if they total more than that specified percentage (usually around 70-85% of the house value)?
 
You can guess and hope you're right. Or you can create an inventory and know you have the proper coverage. Then you'll have the comfort of being able to recover properly if you have to file an insurance claim.

Easy livin'

I love the Billie Holiday song, "Summertime ... and the livin' is easy" because it gives me the vision of relaxing and recharging. I see myself under a shade tree, sipping lemonaid while reading a book, all the while slightly swinging back and forth in a hammock while I hear the the birds sing and the breeze makes its presence known by rustling the leaves.


THAT is easy livin'! And it just might be what you enjoy as well. Or, instead, you might prefer being on a beach, enjoying the sun and sand. While still others look forward to hiking, camping and cooking over an open fire. Whatever your summer brings you - and wherever it takes you, an inventory will help make your relaxation time even more peaceful.

 

Why and how? Summer is the season that records the highest number of burglaries, and many sources attribute that to vacations and summer activities. There is, of course, the length of time people are away from home, but also the frequency of shorter absenses during these months.

Would you be able to recover from a burglary? Could you remember everything you own(ed), including the manufacturers, the serial numbers and model numbers of electronics and appliances? Having a thorough inventory of your belongings will make your recovery much less stressful, more accurate and provide a maximized insurance claim settlement.

With that in mind, here are some tips to help a burglar choose to go elsewhere:

• Look at your house from the curb - ensure there are no valuables in site.
• Place a metal rod in the track of your sliding glass doors.
• Have someone you trust bring in mail, newspapers and packages.
• Keep shrubs trimmed near the house; don't provide a "hiding place".
• Timers on lights, radios & TVs give the appearance that you're there.

Create an inventory, take precautions, and enjoy your summer fun! Then, if you do happen to need to file an insurance claim, you'll be able to do it quickly and get back to the easy summertime livin'.

How much do YOU know about inventories?

Would you help me with some research? I like to have current, relevant statistics about home and business personal property inventories, so I have created a short list of questions that will provide this informaton for me.

The residential survey takes only about one (1) minute to complete, and just two (2) short minutes for the business survey. Your input is greatly appreciated, and by doing so you'll have a chance to win a business or home inventory!

Choose either survey, or both if you have time. Just click on the link(s) below.

RESIDENTIAL SURVEY

BUSINESS SURVEY

Thank you!

Top 5 items people underestimate how much they own

Yesterday's post told of the top five items people forget when filing an insurance claim. While providing our inventory service, we find that there are also typical items that are underestimated. Customers often express surprise at how much they own once we've counted them.

Though not a scientific survey, here are the top 5 underestimated items:

1. CDs, DVDs, Video games and VHS tapes
2. Shoes
3. Clothing
4. Jewelry
5. Cameras

Our customers often show complete surprise with statements of, “I had no idea we owned so many,” or “I guess we kept buying and did not realize how many we had!”  This explains why so often an insurance claim is submitted for far less than what the disaster victims need to recover.

These items are typically accumulated over the years, so it's not evident how much you own. Most won't go out and purchase 200 CDs at one time, but will eventually own that many (and usually more). Consider this - if you just underestimate by 50 CDs, at $15 each, you will claim $750 less than what you need to replace them.

The same is true with shoes, clothing and jewelry. These items are purchased periodically and often received as gifts. Therefore, it’s difficult to recall the quantity and value of these items.

Everyday belongings, often purchased just one or a few pieces at a time, do not create an impact like purchasing a sofa and chairs would create. This contributes to people not knowing what they own. A customer thought she had 80 hangars in her closet. After the count, we discovered she had 153. With a difference of 73 items, averaging $60 each, she would have claimed $4380 less than she should have – and that’s just one closet!

Top 5 forgotten items when filing an insurance claim

When we deliver our customers' inventory portfolios, and review the written report and photographs with them, we are often told, "I forgot about that" or "I didn't remember we still had those" and other such statements. To help us better serve our customers, we have also asked insurance agents and adjusters what items are the most forgotten or overlooked when people file a claim.

They are:

1. Holiday decorations (they are usually packed away in an attic or basement)
2. Other seasonal items (off-season clothing and sports gear)
3. Cameras (usually in drawers and often forget/don't realize how many they own)
4. Small kitchen appliances (some used infrequently and stored in the back of cupboards)
5. Power tools (not used often, sometimes in cases or pushed to the back on shelves)

Consider just these five categories and think how much it would cost to replace all of them. Since these items are often forgotten, many disaster victims don't clam them at all. Thus, they don't get the money to buy new. To replace these items would cost a lot more than it would to hire an inventory service to document everything in your home or business. Kinda makes sense to get your inventory documented, huh?

Why your small business needs to have an inventory

Since we do commercial personal property inventories as well as homes, this information about small businesses was quite interesting to us. I'm sure it will be to all small business owners as well...

When discussing the aftermath of hurricane Katrina, Mary Lynn Wilkerson, director of the Louisiana Small Business Development Centers says that 110,000 businesses in Louisiana were destroyed or severely impacted by the hurricane.

Although 75 percent have since reopened their doors, around 18,700 have closed permanently since the storms, according to the Louisiana Recovery Authority. Two-thirds of those not reopening are classified as small business. “We lost over 60 percent of our small businesses,” says Doug Gurley, state director of the Mississippi Small Business Development Center (Impact on U. S. Small Business of Natural and Man-Made Disasters, page 2. http://www.score.org/).

You might not think you'll never face a disaster like this. But, I'm willing to bet that none of the businesses thought so, either. An inventory is not to be your full disaster preparedness plan, but it certainly is a large part of it, and something that can be done quickly and inexpensively.

If it is so important, why don't people have 'em?

I'll repeat that ... "If it is so important, why don’t more people and companies have current personal property inventories?

Often it is because homeowners, renters and business owners don't realize they need one. A very high number of people think that if they have insurance, they will get a check in the amount of their insurance coverage. Only after a disaster do they learn this is not the case, and come to realize the importance of an inventory.

Another factor is that people don't understand or haven't read their policies. Standard wording in a policy is that the owner will be required to provide a list of the items claimed for loss and proof of these items can/will be required. The lack of knowledge of insurance terms (cash value vs. replacement cost), also plays a large part in not taking the time to complete an inventory.

Other reasons stated are:

• complacency – just don't get to it
• don't know how or where to begin
• too busy
• never made it a priority
• started one but never finished it
• don't expect the worst and they don't want to pay for something that they may never need
• think it would be too costly to hire a professional inventory company

We encourage you to create your inventory. Ask anyone who has had a disaster, was an executor of an estate, or the many other times one needs to know what they own. I am sure they'll say, "I wish I had!"

If your reason for not having an inventory is listed above, and you don't have the time or don't want to do it yourself, the final bullet point is not true. Give your local inventory service provider a call and find out for yourself what your ROI could be - in time and in money!

The words behind the numbers

Tuesday's post offered some statistics to support the need for a personal property inventory when considering disaster preparedness and recovery. A lot of people like to see numbers; others prefer to hear reasons behind or a result of these numbers. Here's some information that will help you see why everyone should have documentation of what they own.

When facing the arduous task of compiling an inventory for loss recovery, there is another aspect to be considered. These are emotionally draining times, and the opportunity to forget items or not be able think clearly is high. Often people just quit counting, listing and reporting items because they just want to be done with it all. They just stop the tiring act of thinking and doing their best to remember what they used to have! Preparing an inventory in advance will lessen the stress and reduce the time spent submitting the information required by the insurance company.

The first time we were burglarized, the shock and frustration was worse than the financial loss since only a few items were taken. But even for these 9 items, we spent an entire weekend just finding "like" items in the newspaper ads and physically going "shopping" to get pricing. We were told if we had an inventory (a list and photos) we wouldn't have had to do that. The second time we were burglarized ... well, that's for another post.

It is quite evident how important an inventory is for both a residence and a business. The photos help prove ownership and the written report provides the details required. The time and stress lessened or removed by having this information will prove a return on investment (ROI) on the time and cost it takes to compile a personal property inventory.