Estate Planning - Sell or Donate?

[cfhofer]

Hey guys,

Since we are just temporary custodians of these historic artifacts, I was curious what others have planned for their collections after passing away. Will you consign it all to one auction house, donate it to a university/museum, pass it to a loved one, bury yourself with it?

Has anyone else given this much thought?

Mark

[sayhey24]

It's a good question, and something a lot of us should be thinking about.

I have already begun the process. I am selling about 70 percent of my collection now to relieve my family of the burden and to help pay for college tuition.

I think in many cases, it may be tough for a family to figure out what to do with your collection, if you were to suddenly pass. For the part of my collection I am keeping, I have formally arranged with two trusted people in the hobby to liquidate on behalf of my family.
There are also estate and inheritance laws to consider -- are your heirs better off if you give them items or money before or after you pass?

I am also in the process of donating/loaning my collection of local baseball memorabilia to an area museum/library.

There is obviously a lot to consider, so as with so much else in life, it's good to plan ahead.


Greg

[MooseDog]

Very good topic.

I recently started working part time for a small-time auction company that mostly deals in abandoned property but also works with estates and we've done several where the estate had some kind of collection.

Now mind you none of the collections were world class but I can offer a few insights that I hope will be of some help if you care about what happens to your collections.

1) If you have any plan or hope to pass your collections along to any person or persons, or have a desire to donate your collection to an institution such as a museum, start at least thinking about it NOW. Have a casual conversation with the person or persons, and contact the donations department of the institution you are thinking about donating to and find out about their policies.

2) Make an inventory and try to keep it up to date. Even if the values fluctuate either way in the future, it is a great help to the estate planner or whomever is handling your estate to identify. At least keep a list of any very high value items. Most estate folks are not versed at all in sports memorabilia and wouldn't know a Cracker Jack card from a 1948 Leaf. They'll do some cursory searches on eBay, and if it's really rare they won't find any pricing and some will assume it has no value (I picked up a really neat item this way in a competitor's auction that was buried in a box lot of "junk" that sold for $1.00)

3) You're going to have to trust me on this, but unless there is some sentimental value attached to your sports collections or individual items, 95% of those items are going to be sold off ASAP unless the person you give them to is a fellow collector. And it is very likely that the money garnered from a sale by someone who doesn't know what they have is going to far less than if you just sold the item off and gave them the money.

We are in Northern California, and the vast majority of the estates we have done the underlying desire is, "we are going to sell the house, we just want it cleared out." As most of you probably know, housing prices in California are insane. Despite the fact that the people we deal with grew up in these houses, they can't wait to cash in.

4) If you have a significant collection, I would highly recommend doing what Greg described in the first reply. Make some kind of arrangement with a trusted friend or fellow collector (a formal agreement with some kind of compensation arragement) who knows what you have and how to best deal with it. Make sure you have a will and whomever you designate as the executor make sure they have current contact information for your trusted friend.

5) If your total estate is going to be worth over $1 million it is VITAL that you both have a will and you consult an estate attorney. Last year I got a contract job to deal with the estate of a hoarder who left everything to his ex-wife. Although he had a will, he didn't set up any trusts or plan how best protect his assets. So what was a $21M estate, the ex-wife apparently ended up with "only" about $6M when all was said and done (the bulk of the "missing" money was in an offshore bank account and the IRS fought the estate for a big chunk of it), and of course lawyers took a big chunk of it.

6) If you have a significant collection and want to donate it to an institution, you should make some contacts and arrangements well ahead of time. You should find out generally, who handles such donations, what the name of their position is (they may not be the contact person when your donation comes around), and what the institution plans on doing with the collection. My limited experience in this case is that most museums and institutions are picky about what they will add to collections, and will often sell off unwanted items, usually in some kind of revenue split arrangement with a third party.

7) At the moment, the general state of the market for used items (estate sales and auctions like ours) is really, really, soft for just about everything except the high end. The buyers who come to our auctions are mostly flippers and are willing to pay very little for the risk. It's been somewhat sad to see entire house contents sell for under $3000 sometimes knowing that the person spent a lifetime accumulating those things. The experience has made me totally think hard about what "things" I choose to keep in my life.

8) This is probably the most important piece of advice I can give. If you have multiple heirs, give them a plan on how to divide up your assets. Two of the jobs we did were for families who were completely torn apart over fighting over what to do with the assets of the estate when two or more siblings want the same things. In one case, the oldest son was so disgusted with the way his sisters were acting they had actually stopped speaking to each other. On the other end of the scale, one family came up with a unique and I felt very smart way to divide up the property. For anything that multiple siblings wanted they "auctioned" it between themselves and they money went back into the estate which of course, some of which would eventually come back to the "winner".

Hope this provides some food for thought.

[autograf]

Great, detailed note from MooseDog.......I will likely be selling at some point because no one in my house is really interested in the stuff. I don't see donating it to any type of museum, library or otherwise as, in the case with Burdick's stuff, they just don't have the space to display it and even storage can be an issue as well. I just don't think they want the stuff ultimately. If you want to benefit someone like a museum or library, sell the stuff and give them the money. I would like to think I will designate a few pieces for each of my kids to hang onto but ultimately, who knows......the estate planning is a great note as is proper wills as issues after death are and can be really confusing and taxing--both from attorneys and from the state/government.

[cfhofer]

Fantastic advice guys! Thank you for taking the time to share your thoughts. I've all ready begun this process and I am only 40 years old.

My unique, one of a kind pieces are slowly being donated to several university archives. However they are pretty selective on what they accept, given their limited space. The bulk of my collection (mostly vintage autographs) is slowly being sold off to private collectors. My wife and son don't have a clue about this hobby. I can see someone easily taking advantage of them.

[Laxcat]

Never too early. My brother collected video games like we do cards. He had his PC and stuff he bought to trade and sell. He nearly doubled his teaching income by dealing games. He was 29 when we lost him very suddenly and unexpectedly. I packed up his nearly 10000 games. He kept excellent records of what was in his collection, the stuff that matters to me, and what he had picked up to sell. He even had purchase prices for each game he had. It made it much easier for me to navigate my way through something I knew nothing about.

I haven't been able to bring myself to sell any of it. I know the day will come when I do and I am very grateful that I have his records to go off of.

[grainsley]

I recently talked to my daughter about this topic after a health scare. Have asked her to take it all and sell it if mortality was to set in. Told her to figure out how to maximize her profit (Ebay etc.) I said I don't care what she does with the money, she can put it towards a nice trip if she wants. Her reaction? "That has a very nice trip to Europe written all over it." Works for me. It isn't to soon for any of us to plan a course of action.

[ooo-ribay]

Originally Posted by MooseDog

We are in Northern California, and the vast majority of the estates we have done the underlying desire is, "we are going to sell the house, we just want it cleared out." As most of you probably know, housing prices in California are insane. Despite the fact that the people we deal with grew up in these houses, they can't wait to cash in.


7) At the moment, the general state of the market for used items (estate sales and auctions like ours) is really, really, soft for just about everything except the high end. The buyers who come to our auctions are mostly flippers and are willing to pay very little for the risk. It's been somewhat sad to see entire house contents sell for under $3000 sometimes knowing that the person spent a lifetime accumulating those things. The experience has made me totally think hard about what "things" I choose to keep in my life.

I had to "dispose" of my Mom's estate and house 10 years ago. I wouldn't say I couldn't "wait to cash in," but my Mom was in a different state and I did need to clear out and sell the house.

I was happy with the auction company but I must echo what MooseDog said...most of her stuff sold for pennies on the dollar. $5000 couches were sold for 100 bucks. The only things that made any decent money were formica or fiberglass "mid-century modern" pieces. The auction company did a good job of advertising the sale on their website and I'm sure if there had been baseball stuff, "us guys" would have been there.

[Runscott]

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