How Can An Estate Planning Attorney Help With Collectibles?
Collectors can spend a lifetime amassing things like comic books, baseball cards, and artwork. However, collectors often don’t pay enough attention as to what will happen to their possessions when they die.
They may hope their children will find a passion for their stuff, or they may figure another collector will pay their heirs a lot of money for it. They may wish to donate it to a museum.
Whether the collection at hand involves Nolan Ryan rookie cards or a wall of Picasso paintings, many of the same issues apply when it comes to estate planning.
What To Do With Your Prized Collection
Sell it. Some choose to sell their collections. In doing this, you first need to determine the collection’s fair value. It’s important to note that collectibles are taxed at the higher capital-gains rate, and the sale also may be subject to other costs, such as commissions and shipping.
Many collectors are not ready to sell their collections while they are still living. Some experts suggest talking to your children about “good, better and best” in a collection. Go through the collection and tell them what they can sell. The good can be sold, the better you should be hard up to sell, and the best you should not sell.
Pass it on. Collectors should ensure there’s someone in their family who may be interested in their collections—and they also need to make sure that person can afford the upkeep. There are other things to consider, such as if some family members, but not others, are interested, how does the collector compensate those who aren’t receiving the collection? If everyone is interested in the collection, how do you divide it? If so, does that impact its value? Finally, if no one can afford the costs of keeping the collection, can the collector afford to leave an endowment to maintain the collection?
To answer these questions, the collector needs to have the collection appraised both as a single collection and as several smaller collections, to see what the effect on its value would be. The collector also needs to look into long-term insurance and storage costs, to decide how much of an endowment would be needed to cover those costs.
Give it away. It isn’t always easy for donors to find charities and museums willing to take their collections. Even if you find one, it might require an endowment fund to maintain the collection. If collectors want to make gifts during their lifetimes that would be deductible for income-tax purposes, they need to consider the value of the collection in light of their adjusted gross income.
Instead of giving a collection outright to a museum, a collector may gift those pieces to a family foundation, which then lends the pieces to various museums worldwide. Such a foundation offers several benefits for the client’s children and later generations, as many years after the death of the client, great grandchildren could run the foundation and have a personal connection and insight to great grandparents they never knew through the collection.
How an Illinois Estate Planning Attorney Can Help
At MacDonald, Lee & Senechalle, Ltd. , our attorneys know that estate planning is about securing peace of mind for you and providing for your loved ones. We do not make decisions for you. Instead, our team of estate planning lawyers will educate you about the Illinois estate planning process and options and let you make the decisions yourself.
If you would like to speak with an Illinois estate planning firm that provides high quality legal services, please contact one of our Hoffman Estates or Des Plaines estate planning lawyers to set up a free consultation.
MacDonald, Lee & Senechalle, Ltd. – Illinois Estate Planning Attorneys