One little-discussed reality of investing in precious metals is the fact that our investments are certain to outlive us. Where our lives span only a few decades, elemental gold and silver have existed for billions of years.

This reality presents us with a problem, however. We need to decide what happens to our precious metals holdings when we meet our inevitable end.

This page offers suggestions about how to ensure that your gold hoards and silver stacks will end up in the right places after your time is up. For the most part, it is common sense.

However, we must make clear that nothing on this page is intended as legal advice, financial advice, or any kind of formalized family plan. Be sure to consult with the appropriate professionals before you make any big decisions.

Lastly, the information on this page pertains to the ownership of physical gold and silver, not ownership within a precious metals ETF, IRA, or other kind of metal-adjacent investment that ultimately acts like a traditional asset, not a precious metals one.

Why Precious Metals Require Special Attention in an Estate

Precious metals are different from traditional investments in many ways. Many of those differences are advantages for precious metals investors, but in this case, there are some issues that require special attention.

• Precious metals have shakier documentation. Very few assets are truly off the books anymore, and bank accounts, retirement accounts, and brokerage accounts cannot disappear from financial records. A large trunk of gold and silver, however, can be lost entirely if your heirs don’t know about it.
• Precious metals don’t require beneficiaries. With almost any type of traditional investment, you have to designate a beneficiary or inheritor as a matter of course or policy. Direct gold and silver purchases have no such requirement, so you have to take affirmative steps if you want to prevent any confusion about which loved one is to receive your metal.
• The metal may be inconvenient to heirs. Most types of investments these days can be managed electronically. Thus, your beneficiaries can assume control of those accounts without the need to travel or arrange for transport of the investment. Gold and silver, on the other hand, cannot be sent online and may present unwanted logistical challenges to their recipients.
• Heirs may not understand the value. Investments, bank accounts, and retirement accounts are easy to evaluate because their valuations and their sizes are one in the same. However, there’s no guarantee that those who receive precious metals as part of an inheritance will understand the value of their new holdings or, for that matter, care to learn.

The First Step: Creating a Precious Metals Inventory

The first thing to do is to address the lack of records for your precious metals. Without a hard copy that details the entirety of your holdings, the risk of something getting lost – either materially or in the valuation – is directly tied to your own well-being.

Even if you’re in excellent health, there’s no upside to waiting. So, here’s what to do:

Make a hard copy record of your precious metals holdings. Be sure to include the following information about each item in your stash:

• Product type – coin, bar, round, or jewelry piece
• Quantity
• The metal or metals included in the piece’s composition with the appropriate purities
• Exact or approximate purchase price and date for the item
• Assay cards, certificates of authenticity, and/or a receipt
• Current storage location – be specific and detailed, not “my house.”

Once you have your inventory complete, you should be purposeful about where you put it. Here are some ideas to consider:

• The best place to keep it would be as a sealed letter with your attorney.
• You may also choose to keep it with your will and other documents related to your estate.
• Wherever you keep it, it should be protected from the elements and all manner of natural disasters.
• Please don’t store it with your metals – that’s just silly.

After you store the inventory, you should endeavor to tell as few people about it as you can. Each person who knows of its existence (and that of your metals) is an additional bit of security risk added to the investment – even if you trust the people you tell. Consider whether it is truly important for a person to know or, for that matter, if it’s the right time for them to know.

The Main Transfer Methods

Now, it’s one thing to have a tangible record of your gold and silver. You absolutely should.

However, it is arguably more important to establish the way that your gold and silver will physically convey to your heirs. There are several ways to do so, and each one has its own set of pros and cons. So, look through them, and start deciding which seems the most palatable for your situation.

Last Will and Testament

The first method to discuss is to pass your gold and silver to your heirs via your last will and testament. In this scenario, your metals must pass through a court-supervised process known as probate, which authenticates the will as genuine, helps to settle any outstanding debts or liens against the estate, and creates a public record of the transfer.

The executor of the will is a person that you designate – someone who you trust – that supervises the process of distributing your assets according to the will. He or she will contact the heirs listed in the will and proceed with passing the ownership of those assets to them.

Needless to say, you should be as clear as possible about the people you name as the beneficiaries of your will. You can also expect that this process is a months-long affair, as it can be time-consuming for the executor to settle all the elements of your estate according to your wishes.

Why you’d use this method

This method is best for people with straightforward estates. If your assets and, more importantly, the ownership of your assets are simple and easy to understand, then a will might be the right choice.

Be sure, however, that you’re okay with the timeline that the process of probate takes. If you want your assets to be in your heirs’ hands more quickly, you might think about one of the other methods.

Revocable Living Trust

A revocable living trust is a legal estate plan that can serve as an alternative approach to making a will. In effect, a revocable living trust creates a separate entity from yourself that can hold the ownership of all manner of assets.

At the same time, it allows you to retain access and control over the assets placed into it. After your death, your self-appointed trustee can avoid probate entirely and move forward with the distribution of your assets. Generally speaking, it is a shorter process to complete.

The only catch is that you have to designate explicitly which of your assets are included as part of the trust. That means that you’ll have to be specific about all the different pieces of gold and silver that belong to the trust.

Anything left out of the trust would be subject to whatever will you have (if you do) and the probate laws in your area. So, you’d need to assign – in writing – those metals to become owned commodities of the trust, not you.

Why you’d use this method

If you have more complexity in your estate than what’s described above, a revocable living trust might be the way to go. If your family situation is blended and/or you plan to bequeath your assets amid a complex family dynamic, you may be able to save a lot of headaches for your heirs.

Similarly, you may simply not want your death and the content of your assets to become a matter of public record. Trusts have no duty to be published with the court or reported in the same manner.

The primary downside to this kind of arrangement is that you need to place each asset specifically in the trust. Should you omit something or fail to describe it adequately, it might become subject to probate. You also don’t enjoy some of the same tax advantages offered by the standard will and probate process, if that matters.

Joint Ownership / Right of Survivorship

It is possible that some or all of your metal is owned jointly. In other words, more than one person has an equitable claim to the property.

In the most common situation of this type, it means that you and your spouse or partner have what amounts to shares in the ownership of the metal. When one of you passes away, the shares automatically pass to the surviving owner.

However, joint ownership can get messy in a few situations. For one thing, if the personal relationship between joint owners breaks down, it may make joint decision-making about the metal more difficult.

Alternatively, if both owners happen to pass away simultaneously, it may make for contentious claims by the heirs of each party. Needless to say, joint ownership requires careful and thoughtful documentation to work properly.

Why you’d use this method

If you are a married couple with a simple estate that both of you own equally. In that scenario, a joint ownership plan may make sense because it’s just an extension of your existing relationship.

In some states, community property laws essentially render assets acquired during the marriage as jointly owned by default. So, you may already be in this situation if you live in places like Texas, Arizona, or California. Otherwise, you’ll need to make it clear that you’re doing a right of survivorship ownership arrangement on a legal document that both of you sign.

Gifting During Your Lifetime

Of course, you can always avoid all of the methods above and just give away your gold and silver during your lifetime. In doing so, you avoid the entire aspect of dealing with your estate.

There are a couple of things to know about taking this approach, though. First of all, you cannot give as much metal as you like without penalty. The annual gift tax exclusion means that after a certain dollar amount’s worth of gifts, you’ll have to start paying taxes on it.

You’ll also need to be sure to pass along your cost basis – the amount you paid for the metal – to the recipients. They’ll need that information when and if they decide to sell the metal.

Finally, gifting during your lifetime negates the ability of your heirs to use the step-up in cost basis at death. Normally, when you die, the cost basis on inherited assets resets to the fair market value of the assets at the time of your death, rather than at the time of purchase (which can mean less in tax basis).

Why you’d use this method

If you’re the kind of person who wants to see the look on your heirs’ faces when you give them gold and silver, this is the method for you. Hey – we’re not judging – giving is often much more fun than receiving.

You can also use this method to reduce the overall size of your estate. You may be trying to do so in an attempt to reduce your estate tax liability (if it applies).

The overarching theme of this section is that you should consult with a capable tax advisor if you plan to go this route. We are not tax experts, and you should never misconstrue the information on this page as financial or tax advice.

Metals Held in a Precious Metals IRA

If you are someone who owns precious metals as part of an IRA, there’s good news – you already have a beneficiary on your account. So, as long as you’re satisfied with the person(s) you have listed, the proceeds of the IRA will go to your designees automatically.

In fact, your beneficiary’s rights to the account actually override those of designees in your will. Because the beneficiary’s designation occurs on a legally-binding document, it takes precedence.

The only catch is that your heirs (aside from a spouse) must abide by certain requirements with respect to the distribution of the IRA’s proceeds. The SECURE Act of 2019 and its successor, the SECURE Act 2.0 in 2022, have made it mandatory that any IRA beneficiaries who are not spouses of the decedent must drain the account within 10 years.

Why you’d use this method

Obviously, if you already have a precious metals IRA or were planning to get one, you’re the primary target for this method. You won’t have a choice about designating a beneficiary, anyway.

The only thing is that you have to make sure that your desired beneficiary remains current. If you change your mind or something happens that makes that person not the right choice, you’ll need to take the appropriate steps to update your designation.

Special Considerations by Storage Type

When it comes to how your heirs can take possession of your gold and silver, the requirements can vary significantly. So, along with letting your designees know about their future ownership, be sure to walk them through the process of securing access. Here’s a brief table to illustrate.

The Cost Basis Question: Why Purchase Records Matter

Like many investments, gold and silver are subject to capital gains tax. When you sell your gold or silver for profit, you owe the government a certain amount of the profits. Crucially, however, you only owe taxes on the portion of the sale representing your profit.

As such, there is a great deal of importance surrounding the cost basis of a collection. The cost basis is the amount that you paid for each member of your sold collection. In other words, it’s the money you’ve put into the investment.

That part is not subject to taxation. So, you must know what your cost basis is in order to know how much of your gain might be taxed.

Now, we’ve already touched on the fact that there is a major tax advantage available to your heirs if you choose not to give the metals to them prior to your death. They are permitted to receive a step-up in their cost basis to represent the fair market value of the metals on the date of your death.

This is an advantage because it essentially gives them the amount that the precious metals appreciated during your lifetime for free. They don’t have to pay taxes or do any sort of makeup payments – it’s as if they bought the gold and silver on the same day you died.

As a result, they may owe very little capital gains tax at all if they sell quickly after your passage. From the IRS’ point of view, they’re basically breaking even, and there’s nothing to tax.

However, your heirs are going to need to know about the existence of the metals first and foremost before they can take advantage. They also need to have a basic understanding of how to establish the new cost basis for your death date, rather than using the old one.

Please meet with a CPA or family planning attorney if you have more questions about this topic. Ultimately, they are the ones that can best help you structure your deal.

Common Mistakes to Avoid

Passing down your gold and silver can be a life-changing boon to your heirs and descendants. However, doing it incorrectly can lead to incredible headaches. It’s not as though history is void of stories where people fought over a will or last wishes.

Since you obviously don’t want to cause any unnecessary issues, here are some of the more common mistakes that you can make when you establish where your precious metals are headed:

• Nobody knows you have gold and silver. The most common mistake is also the most costly one. If you never tell anyone that you own precious metals, your heirs can’t ever take possession of them.
• Not having a will. If you pass away prior to having a will, there’s no telling where your metals will go or, for that matter, to whom. At this point, there’s no reason to leave anything to chance when it comes to your passable assets.
• No documentation for cost basis. The only defenses that your heirs have against paying the maximum amount of capital gains tax are the receipts you keep from when you bought your gold and silver.
• Outdated beneficiaries on an IRA. If you have someone listed as the beneficiary of your precious metals IRA, they are getting the proceeds, regardless of what your will says.
• Storing metals in a safe deposit box without joint access. If you pass away with your metals in a safe deposit box that lists only you as the owner, your heirs are likely locked out of the box until they obtain a court order.
• Verbal bequests or agreements. Don’t make the mistake of verbalizing what is to happen to your gold and silver – unless it’s written down, it’s not enforceable.

Questions to Bring to an Estate Attorney

Ultimately, if you are considering passing down your gold and silver to your heirs and beneficiaries, you should probably consider retaining an estate or family planning attorney. While we can give you a broad overview of some of the issues surrounding bequests, the best thing to do is to be advised by a true expert.

Once you have retained the services of an estate attorney, here are some of the questions that you may consider asking him or her:

• Do I have a will on file?
• Does the will cover my precious metals?
• Should I avoid probate by using a living trust?
• Is my safe deposit box accessible to my heirs?
• Are the beneficiaries of my IRA current?
• What are the tax implications of gifting during my lifetime?
• What kind of notice should I give to the attorney so my metals aren’t lost?

The Bottom Line

If you’ve gone to the trouble of building a portfolio of gold and silver, it’s no surprise you want your spouse and kids to get it once you pass away. So, with a bit more work, you can ensure that your heirs benefit from your efforts for years to come.