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Los Angeles estate planners: Have you valued your Pogs lately?

Silly Bands and Pogs from the 1990s and Cabbage Patch Dolls from the 1980s were collectibles that some people bought in quantity, with the idea that someday those childhood toys would be "worth something." Other than niche buyers, who today values a Cabbage Patch Doll the way they did in 1985?

Extreme value fluctuation is possible with some assets, which makes it difficult to design estate plans. Think of the value of your home during the recent recession. Although California real estate prices rebounded, property values fell through the floor a few years ago. The asset you thought you had wasn't worth what you thought it was. Then, things changed again.

The value of assets determines how you will divide and shield them from losing worth. You can't plan when you don't know the value of what you own. The Internal Revenue Service may not put the same price tag on your assets that you do or a professional appraiser does.

Like Elvis, Michael Jackson's estate became more valuable after his death than when he was alive. Jackson's music soared in popularity upon the singer's 2009 death, spiking previously-declining royalties by millions of dollars.

Planning and estate administration get very complicated when assets hold unsteady values. Most individuals don't have royalties to worry about, but they do have collections of art, family businesses and, increasingly, intellectual property - assets that can lose and gain value rapidly before or after you die.

Attorneys suggest establishing asset values in detail while you're alive, with projected values for when you're not. The IRS is slightly flexible about property valuation. Estates have the option for asset valuations on a date of death or six months later.

The Silly Bands you own may mean the world to you but, during estate planning, you have to worry what value your assets have to the open market, your heirs and, without a doubt, the IRS.

Source: nytimes.com, "Putting an Estate Value on the Assets Unique to You" Paul Sullivan, Sep. 27, 2013

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