The Value of Your Valuables

Many families consider themselves accumulators of “stuff” as opposed to collectors of fine art or other collectibles. We collect things that fill our homes, our lives and our memories. As I became more aware of their sentimental importance, I also began to realize how neglected these assets can be by the collecting families. One reason that the matriarch and patriarch do not mention the familial importance to their children and grandchildren is that they may not think of themselves as collectors. Collectors may collect books, corvettes, wines, jewelry, furniture, china, and cookie jars that fill up their lives, but they often fail to note the importance of their collections in family discussions. Think of how much it may mean to future generations to know that the collectibles that remain in the family were purchased from a young new artist or writer while the founding matriarch and patriarch were on their honeymoon, or that perhaps an important wine collection started as the result of a family trip to Europe while the children were still young.  For collectors of assets with not just sentimental value but also great monetary value, it can be essential to plan accordingly.

Art, antiques and other collectibles are often not properly addressed in the estate planning process.  It is quite common for the estate planner to not ask about tangible personal property except in a cursory way under the rubric of household possessions. Likewise, collectors are often reluctant to address the subject and just do not realize the extent that their items may have increased in value- many families are shocked when an appraiser places a value on a collection. There can also be tax implications when a valuable is transferred or sold which may result in unexpected penalties and interest if not properly planned. In some cases, moving art or objects from a deceased family member’s home to a surviving relative’s home could be considered tax fraud if not reported.

Recognizing the various components of an asset’s value can be very important. Ownership history, the celebrity of prior owners, or the display history in a museum can each add value to an object. Value can be diminished if there are few clear title transfers, if there are gaps in the title chain or if the asset was subject to questionable transactions. Maintaining the condition of the object is also of course a critical element of value, and conservation or restoration may be worthwhile considerations.  The list of what can affect an asset’s value can be non-exhaustive and can vary depending on the type and history of the asset.

Art and other valuables can be excellent vehicles for a family to be philanthropic. If a specific object is donated to a related use organization like a museum, in some situations the donor may be able to deduct the fair market value of the piece.  Collectibles can also just be a great way to promote enduring intergenerational legacy, and financial assets might not hold the same emotional power.  Thoroughly review your inventory of personal property and work with financial and estate planning advisors to maximize the benefits of your collections to yourself, your family and your community.

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
OneBite Editorial Staff
OneBite Editorial Staff

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The Value of Your Valuables

time to read: 2 min