The internet has made it easier to sell or determine the value of collectable objects. Nevertheless, families may have no idea what the value of some old stamps, rare books, comic books or even that vintage car. Perhaps a parent was a little self-conscious about how much they spent on pieces of art, or they simply saw no need to share the monetary value of their vinyl record collection.
Planning for the future
The fun in these sorts of hobbies is the thrill of the chase for rare objects, but others may not feel same way, or they simply do not have the time or space. It is a good idea when updating an estate plan to consider what to do with a collection, regardless of the worth of the objects. Ideally, the collector does not want anyone fighting over the collection, but it also helps to see if anyone has an interesting in keeping it and establishing a baseline for what it is worth. Whatever the decision, they can then plan accordingly.
Three approaches to preserving the collection
According to Forbes, these are the three most common approaches to those who would like to keep their collection intact:
- Charitable donation: This is a nice way to ensure a legacy and its care, but it can be harder to donate objects than people may think. Museums, schools and institutions often have much more than are displayed as a collection, so the owner should not assume without speaking with the organization, which must be recognized by the IRS as a public charity.
- Selling the collection: The owner or the executor can do this. Like many things, it will likely take time and effort to get a fair value, but it is often the best way to divide the value of the collection. If an executor is to do it, make sure they get an unbiased appraisal. It is also worth noting that the IRS taxes collectibles at a higher rate than other objects.
- Handing it down: This is typically the least likely solution. The collection may need the new owner to commit time, space and ongoing resources to maintain it. Perhaps the value or attachment by the family is so great that it is best to sell it in order to keep the peace.
Attorneys can help
It is common for lawyers who do estate planning to help clients create estate plans that include collections. As each situation is unique, an attorney will be able to tailor a workable plan that addresses the needs of the client as well as the heirs.