Veterans' Gold Collections: How to Pass on to Heirs

Veterans provide great services to our country but often struggle with financial stability and security once they return to civilian life. Successfully managing money, starting investments, and growing them can be challenging. Many veterans invest in the stability and inflation protection that gold, silver, and other precious metals provide. 

Investing in gold, silver, and other precious metals has many benefits – they’re a hedge against inflation, they protect you and your family from political and economic uncertainty, and they are tangible, finite investments with unique growth potential. They also serve as a universally-recognized currency of last resort. 

Veterans who started investing in precious metals early in life can amass a substantial investment by retirement age. For example, let’s consider the case of First Sergeant Gerald T., who saw two tours of duty in Vietnam (1967, 1968) and one deployment to the Middle East (1990-91). He saw first-hand how conflict disrupted lives and just how quickly paper money could go from prized possession to fuel for a campfire. He left military service at age 46 and purchased 2-4 oz of gold yearly before retiring at age 68 with a stockpile of 102 ounces of gold. That’s worth nearly $200,000 at the time of writing. 

If you’re at this stage of your life where you’ve amassed a sizable quantity of precious metals, you might be wondering how to pass on your financial legacy to your heirs.

Anything can happen to your hard-earned investment if you don’t have a solid plan. However, with the right steps, you can control where, when, and to whom your precious metals go after you die. 

This guide aspires to provide all the resources veterans will need to properly leave a precious metals inheritance to their loved ones (or a charitable organization). It can also help those that have inherited precious metals. 

Table of Contents

How to plan what happens to your precious metals

If you’ve retired and have an extensive collection of precious metals, you should plan what happens to them after you die. If you plan to pass the precious metals off as an inheritance, setting up a will and discussing your decisions with your heirs is of the utmost importance.

Discuss with your heirs

Having a conversation with your heirs about their inheritance could be a difficult topic to broach. It’s hard for anyone to start a conversation with “When I die…”, but the harsh reality is that we’re all mortal. 

Instead of bringing up the conversation about an inheritance out of the blue, plan the talk for a later day or time. For example, “I want to talk with you about my will later this week; when can we get together?” is a great way to start. 

Informing those receiving your precious metals inheritance gives them time to understand what they can and should do with your gift. Instead of being surprised, they can be well informed. That protects them from being taken advantage of by unscrupulous vultures attempting to profit on grief by scooping up your precious metals collection for a lowball price. 

During your conversation, you can tell your heirs what type of metals they will receive, where it is stored, and how they can claim them. (Or you can leave them a treasure map– but really, this should be part of your estate plan.) Depending on your storage method, you may need to authorize their access. Check with your depository or bank for details on this. If you choose home storage, your heirs might need nothing more than the combination to your safe. 

Additionally, you can use this time to educate them on gold, silver, and whatever other precious metals they will inherit and what they can do with it after you pass (more on this later). 

• Having “The Talk” With Your Heirs – Questions and steps to take when discussing inheritances with your heirs.
• How to discuss your estate plan with heirs (and why it’s critical to do so) – Importance of such conversations and how to initiate them.
• Talk To Your Heirs About Their Inheritance – 7 reasons and key points surrounding this discussion.
• Heirs Of All Ages: How To Discuss Wealth At Any Age – How to have conversations with heirs of different ages about your wealth and estate.
• Talking to Your Heirs About Your Estate Plan – Additional considerations about having this conversation including non-family advisors and executors and health care preferences.

Set up a will for your gold and silver collections

A will is a legal document that states who will receive your assets, including your precious metals, after you die. When you have a will that clearly states who gets your belongings, it makes the inheritance process much smoother. 

Wills are legally binding, and that means there’s no guessing – nor arguing – about what you want to happen after you’re gone. Therefore, if you don’t have a will, you should get one as quickly as possible to ensure the inheritance of your precious metals happens the way you want it. You may already have a last will and testament you prepared as part of deployment planning. If so, make sure it’s up to date and accurately reflects your wishes.

Wills are not just for the sick or old; everyone with assets – including those of us blessed with youth and health – should make a will. Here are some resources that cover the importance of wills and how to create one. 

• Beneficiary Financial Counseling Service and Online Will Preparation – Resource for free will preparation services for veterans from the VA. 
• Last Will and Testaments Before Deploying Overseas – Reviews the importance of wills and setting one up as part of deployment planning. 
• How to Write a Last Will and Testament – A step-by-step process on writing a will.
• Introductions to Wills – A comprehensive overview of wills, why you need one, and what they do and do not cover.
• Why Young People Should Write a Will – The top reasons everyone should have a will.
• 10 Steps to Writing a Will – A guide with 10 steps on writing a will to take care of your loved ones when you pass. 

Estate planning

Estate planning includes the act of determining how your assets, including your precious metals, are maintained, managed, and disbursed in the event of your death. Estate planning also includes planning for and minimizing estate taxes, creating beneficiaries, making funeral arrangements, and setting power of attorney (POA). 

There are several estate planning strategies that you can use to limit estate taxes, such as making charitable donations and creating trusts. Usually, individuals make their estate plans with the help of an attorney who specializes in estate law. 

Here are some resources on estate planning and why it is essential. 

• Estate Planning for Veterans and Active Military – A guide for veterans on estate planning resources and the unique benefits they have. 
• Estate Planning Info & FAQs – Reviews estate planning, wills, trusts, power of attorney, and how a lawyer helps with the process. 
• Family Estate Planning – Provides families with information, frequently asked questions, and resources to encourage estate planning. 
• Estate Planning Fact Sheet – A list of steps for making your estate plan from the U.S. Office of Financial Readiness.

Form a trust

A trust is a legal arrangement that allows you to arrange how and when your precious metals and other assets get to your beneficiaries. Trusts help you protect your legacy, provide control of your wealth, and can establish privacy and probate savings. A trustee holds your assets on behalf of your beneficiaries and manages, maintains, and/or passes on those assets exactly how and when you choose. 

Trusts are generally used to minimize estate taxes and pass assets outside of probate, saving time and court fees. 

There are two main types of trusts: revocable and irrevocable trusts. Revocable trusts are living trusts (you are the trustee until you die) and can help avoid probate. 

Irrevocable trusts transfer your assets from your estate to your beneficiaries after you pass and remove them from your estate to minimize your tax liability.

Here are some helpful resources on the basics of trusts, how and why to form one, and the different types:

• What Is a Trust? – Explains the basics of trusts, their benefits, basic types, on how to choose what trust is right for you.
• Wills and Trusts – Explains the basics of trusts and wills and their importance for veterans and their families. 
• Keeping Your Assets in the Family — The Inheritance Trust – A guide on inheritance trusts and their benefits.
• Social Security Administration Spotlight on Trusts – The SSA’s guide on trusts and how they affect SSI benefits.  
• Revocable Trust Accounts – The FDIC’s detailed guide on the rules and regulations of revocable trusts.
• Irrevocable Trust Accounts – The FDIC’s detailed guide on the rules and regulations of irrevocable trusts.
• Trust Basics – Overview of trusts from the American Bar Association.

Keep an inventory

Keeping an inventory of your precious metals not only helps with establishing a cost basis but allows your heirs to determine how much their inheritance is worth easily. A detailed inventory is beneficial because most people who inherit precious metals have no experience with them. This can lead to them liquating your gold, silver, etc., for a price well below fair market value. 

You can also document exactly why each gold or silver bar, round, and coin is included in your collection. For example, your gold American eagle coins may fit in with some of your life events, such as owning one minted the year you got married or when a child was born. That way, your heirs can also understand the sentimental value of your collection. 

Be sure to routinely update your inventory tracker and make it available to your trustee and/or your heirs through your will. 

You can track your collection by simply writing it down on a piece of paper. Just keep in mind that a piece of paper can be easily lost or destroyed. A better way could be inputting your collection in a spreadsheet or with a dedicated coin collecting software. Regardless of the method you choose, make sure your trustee and/or heirs can access this document (and make backup copies!).

Some examples are listed below. 

• PCGS Set Registry – The Professional Coin Grading Services (PCGS) official (and free) coin collection software. 
• US Coin – A coin collection app for casual collectors for iPhones, iPads, and Macs. 
• EzCoin Coin Collecting Software – Easily organize, value, track, and manage your precious metals collection with this paid software.
• CoinManage – Inventory and value your entire precious metals collection with this paid for Windows and Mac software. 
• A Plan for Your Digital Assets – Keeping track of your precious metals inventory is useless to your beneficiaries if they can’t access it. This guide covers what digital information and account information you need to leave behind with the executor of your will.

Pass on your inheritance the right way

The primary purpose of estate planning is to leave as much of your wealth to your beneficiaries as possible. Besides naming beneficiaries, you can take extra steps to ensure your estate provides your precious metals to your beneficiaries with minimal headaches and obstacles.  

Along with a thorough estate plan, you should have clear and direct communication with all of your beneficiaries about how much they will get and where it is stored. This step is especially critical if your inheritance is not spread equally amongst your beneficiaries. 

• Precious Metals, Estate Planning, and You! – A guide on estate planning with precious metals.
• Considerations About Passing an Inheritance to Children – Best practices for optimally leaving an inheritance for your beneficiaries. 
• Ways to Stretch Your Inheritance – How to make the most of your inheritance.  
• How to Leave an Inheritance to Your Kids – Tips on communicating to your children about their future inheritance to reduce fighting after you pass. 
• Average Inheritance: How Much Are Retirees Leaving to Heirs? – Reviews multiple studies that examine the average and median inheritance amounts.
• How Much Inheritance Is Too Much? – Worried that your inheritance may be “too much” for your beneficiaries? This article reviews American families' wealth statistics to help you make an informed decision. 

Educate your beneficiaries 

Making sure your beneficiaries understand the value of precious metals is essential. When they inherit your precious metals from you, they will have three main options:

1. Keep them
2. Sell them
3. Trade them

Whatever your beneficiaries decide to do with their inheritance, understanding gold, silver, and platinum's value, utility, and benefits is critical. Knowing what they’re worth and how to value them properly will ensure they get the best value when (and if) they decide to sell any of the precious metals they inherit from you. 

• What are Precious Metals? – A brief guide on precious metals, why they are valued, and their utility as a financial asset.
• The Role of Precious Metals in Portfolio Diversification During the Covid19 Pandemic – A 2021 study investigating the relation of precious metals and stocks during the first wave of the Covid-19 pandemic. It found that precious metals serve as a safe-haven asset from short to long-term investment horizons. 
• VA Benefits for Spouses, Dependents, Survivors, and Family Caregivers – VA resources on additional benefits for veteran survivors. 
• Six Tips for Managing an Inheritance – A large inheritance can be life-changing. This guide provides tips on managing the assets you inherit. 
• Gifts and Inheritances – A list of frequently asked questions related to inheritances from the IRS. 
• ​​Smart Ways to Handle an Inheritance – Tips for beneficiaries on managing their inheritance the right way. 
• How to Handle Inherited Investments – Receiving an inheritance can be a lifesaver or a burden. This guide details how to make the best of it. 

Multiple heirs

In some things like real estate, only having one of something can make it difficult to decide how to distribute it to multiple heirs. Coin collections too may present this problem. A complete proof set from the early 20th century, for instance, may be worth more together than the sum of its parts. (The opposite may be true for more recent sets.) 

Knowing exactly what you have, the values of each piece of your collection and the collection as a whole, as well as how your heirs’ plans are all critical to know ahead of time. Some heirs might prefer to continue keeping a collection together. Others would prefer the cash.

Additionally, the option of creating a trust to both keep the collection together while offering ownership of it spread across multiple heirs might be one consideration you start with. The heirs can then decide to keep it in a trust, sell them, or buy out the other heirs. 

• Appraising Coins to Find Their True Value – 5 tips on how best to approach appraising your coin collection.
• Coin Sets vs. Individual Coins – A resource to help understand the intricacies of valuing sets vs. their individual parts.
• An Estate Planning Checklist to Preserve Your Art Collection – Steps to take for a collection ahead of time.
• How To (Fairly) Divide Your Estate Among Multiple Heirs – Additional considerations when deciding how to best distribute a collection or parts of an estate to multiple heirs.
• How to Split Your Estate Fairly Between Your Beneficiaries – An ordered list of steps on how to decide and take action to divvying up an estate.

Consider pre-emptively gifting your estate 

Gifting your inheritance before you die has many financial benefits, including the ability to use your annual gift tax exemption to avoid taxes. Besides these tax benefits, there are plenty of personal advantages of a “living inheritance,” too. For example, helping your children pay off their house, sending your grandkids to college without debt, or paying off your family’s financial burdens are just some examples of the joy you can experience with a living inheritance. 

Additionally, if your heirs are not experienced with managing money, slowly providing them with smaller financial gifts will help them learn and adapt to better manage money (especially while you’re still around to walk them through it). Conversely, if they receive a huge estate all at once when you pass, they could make severe, even unrecoverable, financial mistakes. 

• The Joys and Drawbacks of a Living Inheritance – Introduces the pros and cons of providing a living inheritance to your beneficiaries. 
• The Advantages of Gifting Precious Metals You Own to Family Members – Reviews the benefits of gifting your precious metals to your heirs. 
• Pre-Inheritance Trust (PIT) FAQ – A list of commonly asked questions concerning Pre-Inheritance Trusts (PITs). 
• The Pros and Cons of Gifting an Estate Before Death – Examines the advantages and disadvantages of gifting your estate before your death.
• Estate and Gift Taxes – IRS information on estate and gift taxes. 

Arrange a donation

Perhaps you do not have someone in your life that you would like to leave your precious metals. For example, all your children are “well off.” Or you may have the sort of collection that would be prized in a museum, on display, rather than locked away in a vault. In that case, you can create a trust and arrange for your estate to donate them to a charity or non-profit organization of your choice. Alternatively, if you gift a portion of your assets to a charity, it can help lower your estate taxes. 

• How to Donate to Charity in Your Will – Overviews the benefits of donating to a charity in your will, how to choose a charity, and how to decide how and what to give. 
• Estate Planning and Charities – Provides information on charitable giving with your estate. 
• 7 Steps to Make Charitable Giving Part of Your Estate Plan – Introduces seven strategies for including charitable giving into your estate plan. 
• Benefits of Donating Fine Art and Collectibles to Charity – Reviews the top benefits of gifting precious metals, art, collectibles, and more. 
• Ways to Give Back to Veterans – Reviews various ways to give back to other veterans. 

So, you’ve inherited precious metals? Tax consequences for beneficiaries

If you inherited precious metals and other assets, you might be wondering if you have any sort of tax consequences. Generally, when you inherit part of an estate, you don’t pay any of the deceased’s taxes; the estate does. The cost basis of your inherited precious metals establishes on the date of death of the person who gifted them to you. It equals the fair market value on that date.

If you ever sell the precious metals, this cost basis is what you use for tax purposes. 

• How Is Cost Basis Calculated on an Inherited Asset? – Reviews how to determine a cost basis on your inherited precious 
• Selling Inherited or Gifted Gold? – Examines the tax rules when selling inherited gold. 
• Topic No. 409 Capital Gains and Losses – The IRS rules on capital gains and losses that you will need to apply to any precious metals you sell. 
• Taxes on Physical Gold and Silver Investments – Covers how gold and silver investments are taxed, cost basis calculations, and how to offset tax liabilities. 
• Tax-efficient Investing in Gold – How to invest in gold and other precious metals while minimizing taxes. 
• Don’t Let Taxes Slash Your Gold Profits – Ways to minimize taxes on gold bullion. 

Special considerations 

Forming an estate plan, making a trust, and establishing a will are great steps to ensure your precious metals go exactly where you want them to. However, to gift your estate in the best way possible, there are many other considerations you must make in regards to your precious metals collection. 

Here are additional precious metals factors you should be aware of or consider. 

Keep your precious metals insured

Adding an insurance policy for your precious metals or a simple floater policy (an insurance policy that covers valuable small items) can help protect your precious metals. If you are storing your precious metals at home, insurance is necessary. 

• How to Safely Store Your Gold and Silver – How to store and protect your precious metals.
• Insuring And Protecting Your Gold And Silver – A guide on insuring your gold and silver at home. 
• Owning Gold Is One Thing, Storing It Quite Another – Reviews insurance and storage options for your precious metals.  
• What to Know About Insuring Gold and Silver – Reviews how to insure your gold with a homeowners policy. 

Protect your precious metals

If you are storing your precious metals at home, you not only need insurance but a way to store them safely too. Consider investing in a safe to protect your bullion from theft, fire, and other catastrophes. 

Make sure to provide all combinations to your storage safes in your will, so your beneficiaries have access after you pass. 

• Precious Metal Safes for Home Storage – A guide on safely storing precious metals in your home. 
• Storage Solutions: The Right Way to Store Your Precious Metals – Common sense plans for keeping precious metals in your home. 
• How to Store Gold and Silver Bars and Coins – Reviews different storage options for the precious metals you own. 
• Guide to Storing Bronze, Silver, and Gold – Tips for the ideal conditions for storing your bullion. 
• Secure Storage – Provides tips on safely storing your precious metals. 

Use a vault or depository 

Storing some gold and silver bullion at your home provides you easy access in the event of political, economic, or civil instability. However, if you have amassed a sizable investment of physical precious metals, most experts recommend you store it in a vault or depository. 

Vaults and depositories carry insurance to fully cover your precious metals. Besides insurance, vaults are much more secure than you can ever make your home. Additionally, for bullion investments greater than $20,000, storage at a depository costs less than an insurance policy for home storage. 

If you open an account with a depository, establish a beneficiary with the company you choose. Also, provide their information in your will and estate plan. 

• Insuring And Protecting Your Gold And Silver – How and why to store your precious metals collection at a vault or depository. 
• What Is a Bullion Depository? – Explains how secure private bullion depositories work and why you should consider one. 
• The Dos and Don’ts of Gold Storage – Reviews what you should and should not do when storing your precious metals. 
• Where Is All That Gold Being Stored? – Introduces various gold and silver storage areas. 
• Storage and Transfers – Storage details for your precious metals at the Delaware Depository. 
• Gold Safe Deposit Box – Reviews the benefits and risks of storing your gold in a safe deposit box at a bank. (Generally not the best since items in a safe deposit box are not insured by the bank.)

Make your precious metals “discoverable” by your heirs

Whether you store your precious metals at a depository, a bank safe deposit box, a safe at home, or underneath the floorboards in your house, make sure your beneficiaries have instructions to find and access it after your death. You can always leave your heirs a treasure map to your hidden gold. Or better yet, leave instructions with your estate. 

Hiding your precious metals isn’t ideal because your heirs may not ever be able to find them. Hiding your hoard can make it, so your heirs will never benefit from all your hard-earned money. Add instructions and information to your estate plan and will on where to find and how to access your investment.

Additionally, if you have accounts with a depository or a bank, set up a beneficiary for those accounts too. 

Precious metal IRAs

With a self-directed IRA (SDIRA), you can invest in physical precious metals with all the tax benefits of a conventional IRA. Your precious metals are stored at an approved depository (where they’re secured and insured) and managed by a custodian. 

Funding an SDIRA with precious metals is an excellent way to minimize your taxes while you’re alive, as well as your beneficiaries’ tax payments after your death. 

If you own a precious metals IRA, you should set up a beneficiary for the account and include it in your estate plan. Conventional inheritance rules apply to SDIRAs too, and you should make sure your beneficiaries understand their options with an inherited IRA. 

• Why IRAs Need Designated Beneficiaries – If you don’t establish a beneficiary for your IRA, your precious metals may not get to your heirs. This guide reviews the importance of designating beneficiaries. 
• What happens if you die with no IRA beneficiary? You probably don’t want to find out – The worst consequence is your family not inheriting your IRA. 
• 5 Things to Know About Inheriting an IRA – Five IRA inheritance tips from the U.S. military. 
• Can a Spouse Not Named as a Beneficiary Receive Assets from an IRA? – Simply being married does not give your spouse any right to your IRA when you die unless you write them as the beneficiary.   
• Spousal Rollover IRA – Provides three options for the beneficiary of your IRA. 
• Pass an IRA to Young Grandkids With Care – A detailed guide on steps you can take if your SDIRA beneficiary is a minor, along with other inheritance rules. 
• Inherited IRAs: Requirements and Tips – Tips and distribution options for beneficiaries of an inherited SDIRA. 
• Required Minimum Distributions for IRA Beneficiaries – An IRS resource for IRA beneficiaries. 
• A Guide to Self-Directed IRAs – Reviews the advantages and disadvantages of SDIRAs. 

Conclusion

Veterans (and anyone else) with substantial holdings in precious metals should make an estate plan along with a will. Routinely evaluate and keep a record of your inventory to help your beneficiaries understand what they are inheriting and its value. You can track your collection with an app or software to help. 

Also, educate your heirs about precious metals and your advice on what to do with their inheritance. Provide them resources on what they can do with their inherited precious metals after you pass. 

Consider your options for gifting your precious metals to your beneficiaries, a living inheritance, a trust, storage at a depository, etc. Examine the tax consequences and the benefits of each option and choose the best methods that work best for your estate. 

If you need financial counseling services and will preparation, check out this page on the Veterans Affairs website. Or, to find estate planning services in your area, use this tool from the Senior Veterans Service Alliance.