Part 1 of 4
Every year since his son, Matthew, was born, Pete Robinson would buy a bottle of fine scotch as a little celebration. The New York Post reported that Matthew inherited 18 consecutive years of Macallan whiskey—a “vertical” as it’s called in the spirits world.* What cost $6,600 to accumulate had appreciated to more than $50,000 over that time. The Robinsons are a perfect example of why it’s critical to understand how your collections affect your estate plan.
Porcelain. Coins. Whiskey. Art. Cars. The types of things people collect and the reasons they collect them vary wildly. If you are a collector, it’s important to understand how your collection may have appreciated in value and whether the valuation could affect your taxes and estate plan. At RegentAtlantic, we have clients with a variety of collections. Some are passionate collectors who spend a great deal of time learning about and finding the next item to purchase. Others may have inherited a collection without truly understanding what they have. And others don’t see themselves as collectors, even when they have substantial and valuable collections. As one wine afficionado said to me, “I’m not a collector, I drink all of my wine!”
Regardless of your specific situation, many collections can have significant financial and even family implications. If you own a collection that has value, it should be viewed as an important piece of your overall financial picture.
The first step to understanding your collection and any impact it might have on your financial situation is to seek professional assistance. Discuss your collection with your team of legal, tax, and financial advisors to determine the level of impact your possessions might have on your tax situation or estate plan.
When you speak to your advisors, be prepared to answer some important questions:
- Do you have an inventory of the collection?
- What is the collection’s approximate value?
- Has the collection been appraised recently?
- Where are the objects physically kept or stored?
- Is the collection insured?
- Are there certain trusted professionals that can provide guidance to your heirs?
If the collection has monetary value and has not been appraised recently—or at all—it may be a good idea to consult a professional appraiser. That way, you will have a good understanding of your collection’s value, which will be important if you are planning on passing it on to a family member or donating it to an organization. That information may also affect decisions about where you keep the collection and whether it’s properly insured.
Collections – A Family Affair
Collections can have important family implications, too. The beloved porcelain pieces that dotted a family home may have deep sentimental value to your children, for example. They may see them as part of a family tradition. If you plan on giving the collection to a family member and they are happy to receive it, the transfer is relatively easy.
However, let’s say your child doesn’t want the collection. Then, you have a decision to make: should you dispose of the collection during your lifetime or keep it until you die? If the latter, will the collection go to your heirs anyway, who may not appreciate it? Or are there other options for its transfer?
Of course, each family dynamic is unique. If, for any reason, your family cannot or should not be involved in your decision-making process, another option is to make arrangements for someone you trust to handle the transfer.
Collections can be passion projects or serious investment opportunities. If you are a collector, your RegentAtlantic Wealth Advisor can be an important resource. While we may not be an expert in your collection category, we can help guide you in evaluating your possessions, understanding their impact, and helping you make important decisions about them in the framework of your overall financial picture.
If I may answer any questions about your collection concerns, please contact me at firstname.lastname@example.org.
Part 2 of 4: Division of Assets
Important disclosure information
Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.
Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.
This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.
RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.