As collectors we want to pass along our joy for those things we gathered during our lives. Our collections of specific items, antiques, books, dolls as well as any fine art we gather may represent our own lifelong passion. What we collect or acquire during our lives demonstrate individuality and personality. It isn’t very common to see a collector’s heirs carry on with the same understanding, dedication or appreciation of a collection passed-down. It’s important that we think about these valuables in advance and the eventual fate of our collections. Leaving things in the hands of attorneys and executors often leads to messes and confusion
There are many important issues to consider in order to plan for the future of an estate if you are a collector of anything of sentimental or of any value. The most important questions to consider when planning the future or your collections are:
- Will any one in the family want the collection?
- Is it the type of collection that should be placed in a museum?
- Will the collection need to be sold?
- Is keeping the whole collection together a practical choice?
You may or may not have insured your collections of books, dolls, art or other collectibles over the years, but when you decide to plan your estate and what will happen with everything you have worked hard to collect you may want to consider the importance of obtaining a proper appraisal.
Appraisals for collectible items and fine art generally fall into the following categories:
- Routine Insurance Appraisals Insurance appraisals document replacement cost. The retail price that would have to be paid if the owner were to purchase a comparable work
- Estate Tax Appraisals document fair market value. The price that would be paid between a willing buyer and a willing seller. Estate tax appraisals are usually very in-depth and include a detailed schedule listing all the appraised works and comparable sales for the more valuable items. Consumers want to find experts experienced in dealing with the IRS on art, collections and jewelry related estates.
- Income Tax Appraisals Similar to estate appraisals, an income tax appraisal documents the fair market value. These are often used to determine the donor’s tax deduction when something is given to a non-profit organization.
Glossary of Insurance Terms:
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