Art, stamps, comic books and baseball cards are just a few things people like to collect. Some collections are worth millions, and some are worth very little. Regardless of the financial value, if you collect something, it probably has a large sentimental value.
You may have considered how you would like to pass a collection on, but before you make specific plans, you should know it may not be as simple as you think. Here are some things to consider before passing on a collection.
Donating it to charity
Giving your collection to a museum, university or some other non-profit organization may seem like the obvious answer. However, it may not be that simple. According to Forbes, some estimates show museums can only display about 20 percent of their inventory. It takes money to store, maintain and keep items secure. A museum may not want your collection, or it may only want a few items from it. Or they may only accept it if you also donate money for maintenance.
Before you will your collection to a selected organization, you should ask if they have the room, desire or money for it. You may also want to consider donating it while you are still around because it could provide an income tax deduction. However, the rules for donating collections are complex, and the IRS only recognizes certain charities.
You should first get your collection appraised, and then you will know the fair market value of your items. This will help you when figuring out the tax implications.
Have your executor sell it
You can certainly stipulate that you want your executor to sell your collection. Before you do this, consider what your executor knows about your collection. Is he or she familiar with how valuable it is? Would he or she know where to sell it, or who would be interested in buying it? An executor that is unfamiliar with the value or the collectibles may just try to unload it quickly. Your collection may end up selling for much less than it is worth.
To ensure a fair sale price, you could require the executor have it appraised. You could even recommend a list of appraisers. You may also want to stipulate that the executor sell the collection through a particular dealer, who is familiar with selling that type of collectible.
Pass it down
Another option would be passing you collection on to someone in your family. This may seem like a wonderful idea, but you need to consider some complications. First, would your son or daughter even enjoy the collection? If the answer is not a resounding yes, it is very unlikely your child will hold onto it. Then passing it on may become a burden because he or she will have to sell it.
Even if you think one of your beneficiaries would be happy to inherit your collection, there are some further concerns. Does he or she have the room to store it? What about maintaining it? Your beneficiary will need to possess some knowledge about how to maintain the items. He or she will also need the time and financial resources to do so.
Then of course, you must consider if you leave it to one child, will another child be jealous? You could split the collection. Or maybe selling it and splitting the proceeds makes more sense.
You have worked hard over the years to curate a collection that brings you joy. Deciding what will happen to it after you are no longer around can be difficult.
Donating it to charity may be the right option, but you will want to do some research first. If you decide to have your executor sell it after you pass, include instructions about its sale. Passing it on can be a wonderful way to share your legacy. You just need to find someone who will enjoy it as much as you did, and ensure he or she has the time, space and resources to care for it.