Throughout our lives we accumulate items that are of sentimental or monetary value. During this process, many of us have become avid collectors of one or more specific types of items: coins, art, antiques, toys, signage, décor, historical memorabilia…etc. Many of these collections not only represent a financial value but an emotional value as well.
Collectors take great pride in their collections and have often put a large amount of time, funds and effort into supporting their passion. The attachment to these items can become very strong, and many collectors feel as though their collection(s) are simply an extension and/or an expression of themselves.
As these individuals age, they start to wonder what will happen to their beloved collections. Most want to pass on the collection in its entirety to their children. However, in many cases, the children do not share their parent’s passion, and often have little or no desire to continue the collection and provide the space and effort necessary to maintain it. In such a case, the collection is generally sold, incurring unforeseen taxes and usually dispersing the collection, which is usually against the collector’s wishes. The collector spent a lifetime accumulating their collection only to have it dispersed and divided apart.
There are a number of choices a collector can make regarding their beloved items. The first option is to sell off your collection yourself and use the proceeds as supporting income. This is very difficult for many collectors and is often not considered a viable option. However, the knowledge that your cherished items are going to another collector who will also cherish them can be a great comfort.
Another option is to have the items protected in a living trust. You will need to get an appraisal on the collection to ensure that it will not increase your estate to the point that it will incur estate taxes. In fact, by appraising the collection and protecting it in a trust, you can make sure you plan for the full value of the estate, and avoid unnecessary taxes. With your collection protected by a living trust, you can clearly designate your wishes concerning the items. You can also attach funds to be used for the care and maintenance of the collection. If the value of your collection is so vast that it would put your estate past the exemption limit, further protection options may be advisable.
A final option collectors can choose is to donate the collection to a museum or institution by using a charitable trust. In fact, if your collection is of significant value, you may have your pick of institutions to gift it to. Most museums need funds provided with the collection in order to take and maintain the collection. If your items are not to be displayed, they could be auctioned off with the proceeds going to the designated charity or institution. This method can also help you to avoid unnecessary taxes and can benefit a cause that is dear to your heart. This is a way to ensure that your collection benefits others as much as it has benefitted you.
Whatever route you choose to take, make certain you plan ahead and inform your beneficiaries of your plan. Make certain you have an appraisal done every 5-10 years to maintain a current estimate on the value of your collection.
For more information or assistance in this matter, contact MH at 888.222.1328.
What the Attorneys of Morris Hall Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down. The attorneys also help those in Arizona to apply for and receive Medicaid assistance and Veterans Benefits. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
In fact, estate planning, asset preservation and probate law have been our only areas of practice. We are proud to have helped thousands of individuals of all levels of wealth and assets, people concerned about protecting their families from the devastating legal and financial effects of disability and death.
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