Estate Planning For Collectors
Estate Planning For Collectors
"Jim," age 50, has collected music for his entire life, some autographed, others very rare. His library will likely remain full when he dies until his wife decides to get rid of them, or sell their house. Then, maybe she and their children will each pick out a few mementos or keep the ones they fondly listened to together. But as for the remaining collection, she will either sell the vinyl albums at an Estate Sale or donate the rest. In Jim's current estate plan, he plans for his wife to inherit everything, entrusting her to make decisions about his belongings. While this estate plan is typical, it may not be ideal for either the executor or the beneficiaries.
Whether you've amassed a collection of records, Lladró figurines, antique furniture, sports memorabilia, or anything else, your executor may struggle to figure out how to dispose of your belongings without a specific plan. Whether Jim appointed his wife, one of his sons, or a non-family member as executor, they have a legal (fiduciary) obligation to work in the best interest of the beneficiaries. However, there is a balance between disposing of the property promptly and getting the best price. If cleaning the home before putting it on the market is the higher priority, that may result in selling or giving away belongings without knowing the actual monetary value.
The same fate likely awaits your stuff after you pass. However, if you create a plan for how you wish your heirs to dispose of your beloved belongings and communicate that plan to them, there is a much greater likelihood that your heirs will carry out your wishes.
Estate Planning For The Collection
First, take an inventory of the items in your collection. Digital tools or home inventory apps can help, but even a simple notepad with a description is better than nothing.
Include as much detail as you can, including:
- The name of the item
- A brief description
- Approximate value
- Location
- Photos
Once you have a collection inventory, decide what you would like to happen to each item. For example, you may want certain items to go to specific family members or friends. You can also donate items to a museum, gallery, or educational institution. Donations may be the best option if you have historically valuable collectibles.
Within Jim's library of more than 1,000 vinyl records and CDs, he identified at least 100 as quite valuable. He listed those in an inventory referenced in his will where he asks his wife to decide if she (or the kids) want to keep them or sell them. Jim created instructions as to who his executor should contact if his wife choose to sell the library of music instead of holding on to it. His executor will donate the remaining albums in Jim's estate to a non-profit music organization.
What's Next?
If you are unsure what to do with specific items in your collection, include them in your will as part of your general estate. If you anticipate your executor selling your valuable collection, solicit professional help in advance.
Consulting with auction houses, other collectors, or even eBay can help you determine what your collectibles are worth. Providing your executor with a plan will help him make better decisions about getting the most value when selling the items on behalf of your heirs.
Estate planning for collectors can be complex. For more information, be sure to watch "How To Sell A Collection At Auction" or contact the Hurlow Wealth Management Group for more details.
