Your collection of baseball cards, Birkin handbags or aging Bordeaux may deliver hours of pleasure. It’s also an estate planner’s nightmare.
Though much joy those stamps,coins or bobbleheads might bring you now,your collection is also an asset,and you’ll need to decide what becomes of it when you pass on.
Placing a precise value on a collection is tricky business, according to accountants and attorneys who deal with estate planning.
And what happens to those paintings or vintage guitars when you die? Splitting a collection seems to defeat its purpose. And some of your heirs may not share your enthusiasm for Eisenhower-era comic books.
“Imagine you don’t have a will,” said wayne Hassay, LegalShield provider attorney and managing partner at Maguire Schneider Hassay in Ohio. “How do you distribute 10,000 baseball cards or 500 bottles of wine among your six intestate heirs?”
Here, then, are five expert tips for handling collections in estate plans.
Document your collection
If you have a collection with financial or sentimental value,estate planners say,consider making a record of what you have and what it’s worth.
“At a minimum, self-document your collection,” said Sarah Gaymon, a CPA at Berkowitz Pollack Brant in Florida. Your own documentation “is something credible, and it gives you a baseline of what the value could be.”
Ideally,populate a spreadsheet or fill a file folder with descriptions of every item in the collection,including how you got it,why it’s valuable,what you paid and what it might be worth today.
Don’t have time for a spreadsheet? Take photographs or video of your collection. While you’re at it, make a visual record of your other stuff.
“Back in the day, they used to say, ‘Walk around your house a
Appraise your most valuable items
Formal appraisals can get pricey. And you might not want to hire an appraiser to pin a price on your Beanie Babies collection.
But for high-value artwork, jewelry and the like, appraisals matter.
“If you start broaching five figures and above,it’s probably not a bad idea to do it,” said Michael Chuah,principal attorney at Paxterra Law in Los Angeles.
Appraisals help with insurance coverage and estate planning. They also signal to potential heirs that the weird, splotchy painting above the fireplace should not go to the dumpster.
A signed Michael Jordan jersey hangs along with a collection of sports memorabilia.
Tell loved ones what you have
The last thing you want, after your death, is for your prized baseball card collection to land in a recycling bin.
You know why your collection matters. Your loved ones may not. Consider taking some time to walk them through it.
“A lot of times,people will save something because they think it’s valuable,and then the younger generation will say,’Omigod,that’s the first thing I’m throwing out,'” Buffardi said.
Too many aging Americans shy away from discussing their valuables with loved ones, Hassay said.
“The gut instincts of so many client