Collectors often spend a lifetime amassing things they love, like baseball cards or comic books, even art. But they often pay little attention to what happens to these prized possessions when they die.
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Sometimes, they hope their children will develop a passion for the collectibles that they loved, or they hope some other collector will pay a lot of money for these items.
But, without proper planning, the odds are that these beloved items will be dumped at a yard sale, according to a story in the Wall Street Journal.
And the owners could miss out on tax savings, the story contends.
Here are some things collectors can do whether they decide to pass their items along, sell them or even donate them to a collection:
- Passing it on. Make sure there is someone in the family who is interested in the collection. And make sure that person can afford the upkeep, including insurance and storage. If more than one person is interested, how do you split the collection up? You may need to have the collection appraised to answer these questions. You could also start gifting parts of your collection before you die.
- Selling. If you choose to sell, you need an independent appraisal to determine the collection’s fair value. Collectibles are taxed at the higher capital gains rate of 28 percent, by the way.
- Donating. It may not be that easy to find an institution willing to accept the items.
If you have questions about estate planning, feel free to call us for a consultation at (626) 696-3145.
