When a will is executed, the thimble or shot glass collection is usually only given a cursory amount of consideration. Not all collections are equal. Serious collectors have dedicated a lifetime to the building of their prized collection. Art, antique cars, memorabilia, gemstones, historical artifacts, coins and stamp collections are some of the most popular types of collections.
Collections should receive special attention in a comprehensive estate plan. There are many options available to collectors to ensure that their collections are dealt with per their preferences.
A good place to start
Every estate is as unique as the person to whom it belongs. The following tips can be helpful when considering what to do with your collections:
- Take inventory: It is important to not focus on the amount of money you have invested in your collection but instead on getting professional appraisals of its current value. With firm numbers in mind, you can make an informed decision about the collection’s fate.
- Tax obligations: Art and collectibles have a capital gains tax at 28%, which is considerably higher than the usual 20%. If selling your collection and placing the money in your estate isn’t an option, then maybe it is time to think outside the box.
- Consider all the options: Collections can be placed in an LLC as a creative way to leave multiple people responsible for the fate of your collection. Another creative solution is to create an exhibit on display at a museum for those items.
- Talk to your heirs: Some collections require special preservation measures such as temperature and humidity controls. You may unintentionally burden your intended heir with the responsibility of maintaining a collection. Open communication can clarify both parties’ desires.
There are various creative solutions that you can employ when estate planning. It is also important to deeply consider your own personal desires regarding the valuable collection.
If you haven’t yet considered the role of your collections in the estate planning process, now might be the time.