Legacy Assurance Plan - In 2012, the New York Times published
an article that mentioned a Georgia woman named Sandy Paschal and her
collection of "Department 56" holiday villages. While the name
"Department 56" may conjure to mind your mother or grandmother's
collection of Snow Village pieces she dusts off and displays every year at
Christmas time, Paschal's menagerie was something much more. It numbered
thousands of pieces and had an appraised value in excess of $100,000. Many
people today possess collections, ranging from coins to baseball cards to comic
books to model trains to vintage dolls. Whether your collection has a large
monetary value like Paschal's or holds much more worth in terms of sentimental
value than dollar value, you probably care about what happens to your
collection after you die. Creating an estate plan and including your collection
in your plan is a great way to help ensure your goals for your collection are
met.
As a starting point, it may help to
know how much your collection is worth. Given that some individual stamps,
coins, comic books, baseball cards and "Star Wars" figurines are
worth thousands of dollars, your collection, especially if you've had it a long
time and taken great care of your pieces, could hold more monetary value than
you'd think. This is important for multiple reasons. For example, if you have a
coin collection that turns out to be worth $25,000, and you have a specific
loved one you wish to receive it, you may want to factor that $25,000 figure in
when you decide how much to leave that person (and your other loved ones.)
Also, if you consider giving that collection to your preferred recipient during
your lifetime, there are tax implications of doing this that you should take
into consideration before you transfer the collection's ownership.
Regardless of whether your collection
is worth $100 or $100,000, you likely cherish it very much and want it to pass
to someone who will enjoy it as much as you have. You may have a child whom you
love and trust and definitely desire to include in the distribution of your wealth,
but whom you anticipate would take you beloved collection and immediately put
it on ebay, donate it to a thrift store or simply unload everything in a yard
sale. There are ways to plan to avoid that outcome. One way is to sell the
collection yourself. By selling the collection in your lifetime, you control
the way in which the collection is offered for sale, and vastly increase the
odds that the person who receives the collection is a like-minded collector who
will appreciate the collection for more than just its dollar figure. Similarly,
giving your collection away during your lifetime also allows you to assert some
greater control over who receives your collection.
If you decide to hold your collection
until your death, it is very important that you make sure your estate planning
documents are sufficiently specific so that your loved ones know how how to
handle your collection. Things like china or collectible figures generally do
not have ownership documents and, in the abstract, would be considered to be
just another part of your household effects. So, if you don't want your 19th
Century china collection and your Department 56 villages lumped in with the
dishes and the knick knacks you bought at Target last year, your plan documents
need to say so in clear detail. If you have an estate plan that includes a
revocable living trust, your trust has a place (often labelled as
"Schedule A") that can help you in doing this. You can specifically
list things like your Cabbage Patch dolls or your collection of Lionel trains
or your vintage Louis Vuitton handbags as assets that you are expressly funding
into your trust using your Schedule A. Then, in the section of your trust that
spells out the details of the distribution of your trust's assets, you can
state exactly what you want to happen to each of those collectibles.
