Collectors of antiques, art, and other collectibles often want to keep their treasures in the family by passing them down to future generations. Sometimes these items were inherited, handcrafted by a relative, or simply collected over time with much consideration, effort, and capital. Whatever the case, preserving these objects is important to maintain both their monetary value and sentimental meaning. For ultra-high-net-worth (UHNW) individuals in particular, it’s not uncommon for a good 5 to 10% of their net worth to be in collectibles and art. Having a plan in place to preserve and pass down this wealth is essential. In this article, we discuss the steps one can take to safeguard their prized pieces, so these invaluable treasures hopefully stay in the family for many generations to come.
Create an Inventory
One of the first steps one can take in this situation is to make a comprehensive list of all the items. This detailed inventory will serve dual purposes: 1) it will help the collector keep track of their pieces, and 2) it will simplify things for future generations who naturally aren’t as familiar with what’s been purchased and accumulated. While it might feel tedious and time-consuming, thoroughly researching and documenting all the pieces will help protect their monetary value in the future.
The inventory should include any known history or values for each item, the dates they were created and acquired, any associated contracts or licenses (e.g., copyrights, consignment agreements, etc.), their location, and gallery/dealer names, contact information, and related catalogs. It should be remembered that even a single document might determine the value of an object so it’s critical that nothing gets overlooked.
At a minimum, a copy of this inventory should be given to one’s legal and estate planning advisors.
Organize the Collection
After everything has been clearly inventoried, it’s a smart move to additionally label and properly store the items that aren’t currently being displayed. Valuable and fragile items must be properly protected, which may involve purchasing special storage containers or insurance. In addition, grouping items with similar characteristics can help simplify future tax planning, the monitoring of art trends, and so on. Each piece should be kept with all of its paperwork, appraisals, catalogs, bills of sale, and notes, or an organizational system (preferably digital) must be developed that connects each item to its associated documents.
Choose the Recipients
The collector must spend some time deciding which family members will receive which items. They may choose to keep some pieces while passing others down to children or grandchildren. It’s a good idea to discuss these gifting wishes with the proposed recipients to gauge their interest. If there are a large number of collectibles, antiques, or artwork, one might consider having a family sale or auction so everyone has an opportunity to purchase the items that interest them personally.
In instances when the chosen recipients don’t share the same taste in art or don’t want the items for other reasons, one might choose to gift their collection to a museum, gallery, or another non-profit entity for a tax break or sell the pieces while they are alive so they can potentially invest in others or use the income elsewhere.
It’s not always an easy process, but by taking the right steps, collectors of antiques, art, and other collectibles can protect and pass along the treasures that mean so much to them. Creating a detailed inventory and aggregating the items may help ensure they maintain their value while also keeping things organized for future generations. Gifting the items to family members or donating them to non-profit institutions are options that may also help preserve the pieces. It's generally wise for one to consult with a trusted advisor about best practices for transferring ownership before making any decisions. With the right guidance and preparation, one can enjoy their treasured collectibles throughout their lifetime and pass them along for future generations to enjoy as well.