It's All Trew: Calling it quits? When disposing of a collection, take care to protect your investment.
For many collectors, there comes a time when a collection must be laid to rest in one form or another. If you suddenly find yourself with the need to dispose of a collection, be patient; don't get in a hurry. And don't allow anyone to force you into a quick sale. Collections sold in haste or "lump lot" are usually discounted from 25 to 75 percent. Do not give away or sell any part of the collection unless all interested parties agree in writing. Keep a log of everything you do during the process.
If a detailed inventory and evaluation total don't exist, make one immediately. You must know what you have and what it is worth. If a collector who is familiar with market values is not available to help, consult a local auctioneer. Do not allow anyone access to the collection unless you are present. The mysterious disappearance of one or two choice items could reduce the collection's value by 50 percent or more. Trust everyone, but tempt no one!
Determine beyond doubt whether you'll be responsible for taxes, fees, liens or probate requirements that must be paid or met before disposing of the collection. Keep good records. Documentation may prove helpful should you later have to explain your actions to the IRS or a probate judge.
Once you've compiled a detailed inventory complete with values, and resolved all questions pertaining to legal and tax requirements, there are several ways to dispose of a collection. As a rule of thumb, the less work you do in the process, the less you will make. For example, advertising can generate much higher prices, but that process requires an investment of time and money.
You may decide to give your collection to a close friend or family member. Be sure the gift is agreeable to all parties and well documented. Decisions made during periods of emotional stress or grief may be cause for regret later, particularly by younger members of your family.
Donating a collection to a museum can perpetuate the life and value of a collection as it is protected, preserved and displayed. However, be aware that museums are not obligated to keep or display donated items permanently. Make sure the entity you deal with is a 501c, tax exempt, non-profit group and ask to see official documentation. Gifts to a legal nonprofit entity can produce a tax deduction in the amount of the total collection's value. Usually any valuation less than $1,500 is accepted. This tax deduction may qualify as an asset in estate settlement. Be sure the tax identification number, name and address of the receiving entity is on the deduction form.
If the collection goes to a non-profit group, you must determine the total value of the collection. The entity will give you a completed IRS form governing contributions that you will then submit with your annual income tax return.
Almost any reliable auction firm can handle the sale of a small collection. A large and valuable collection may require specialized services. If the original collector belonged to a collector association, small collections can sometimes be sold at collector shows. The process is comparatively easy and can generate good prices, with the commission going to the association. Contact the group president for information.
Small collections and "staggered sales" of large collections may be consigned to a regular, established public auction. This spreads the work over a longer time period, usually assures better prices and often saves transportation and labor costs. Be sure consigned items are included early enough to be listed in sale advertising.
When planning an auction, contact a reliable auction service and ask for references. To eliminate problems, do your homework. Until you decide on an auctioneer, be cautious in divulging the location of your collection. Your inventory list and personal descriptions should be enough to secure a contract. If you are not comfortable negotiating for this service, consult an attorney. Final preparation and transportation of the collection by a professional auction service can be an advantage, as such firms are typically well insured and have experienced employees and the right equipment to handle the job.
Selling to a dealer is another option. Be sure the one you choose is reputable: Do your homework! Remember that dealers have to make a profit in order to stay in business, so his valuation of your collection may be 20 to 30 percent below top market prices. Be sure you are present during the dealer's inspection, and that your inventory lists match in number of items and total dollars.
Online auctions are increasingly popular. eBay sales have proved to be the top price getter in selling collections. However, weigh those prices against a process that can be time-consuming, expensive (shipping costs) and intimidating to those who are not computer savvy. Your best bet is to visit with someone who's gone that route to get a good idea of what it entails.
Some collections are well suited to disposal by sales at flea markets and antique malls. Good prices are usually the norm, but booth rent and/or sales commissions can eat into your profits. If you enjoy the bargaining process, this might be fun for you. Bear in mind that it takes time and effort to build and stock a booth, and keep it fresh.
Depending on the nature of your collection, garage sales might work. You must have adequate space, pay any relevant local fees and work with neighbors to allay concerns over traffic and parking. With no overhead costs, selling out of your garage has a lot of pluses. Without aggressive advertising, however, the prices you achieve will be low.
Regardless of which approach you take, the critical first step is creation of a comprehensive and current inventory. Keep a copy of that document with your will, and give copies to your attorney, tax preparer/accountant and insurance agent. If you're married, discuss plans for disposal of the collection with your spouse. Make sure all family members are aware of your plans. When a collection is built with hard work and hard-earned dollars, it's sad to see that investment disappear because of ignorance, disinterest or the greed of heirs or estate administrators. Take a few steps now to ensure your investment is protected! FC
Delbert Trew is a freelance writer, retired rancher and supervisor of the Devil's Rope Museum in McLean, Texas. His wife, Ruth, collects antique dolls, is secretary/treasurer of the Devil's Rope Museum and the Old Route 66 Association of Texas, and, according to Delbert, "Queen Mother of the local Red Hat club." The two share authorship of this column and Ruth is the able photographer. Contact them at Trew Ranch, Box A, Alanreed, TX 79002; (806) 779-3164; e-mail: email@example.com