Written on August 22, 2011 – 5:20 am | by Elaine Blades
A short while ago, I decided to divest myself of some comic books I’d been holding onto for many, many years. A quick search on Kijiji led me to a local potential buyer. We met a few days later to review the collection. He offered a modest payment which I accepted.
I can only assume the amount offered was fair. The buyer explained my collection was in reasonably good condition, but noted I did not own any really special (in other words, valuable) issues. Given that I had no interest investing the time to research the potential value of the collection, coupled with the fact the buyer seemed like a decent guy, I was okay with the offer.
A couple of days later I received an e-mail from the buyer in which he mentioned that in addition to collecting comics, he also collect Japanese Arms and Armour and has ‘strong experience in ephemera (paper collectables such as postcards, posters etc.) as well as other militaria collections’.
This got me thinking about both the estate planning and the estate administration implications where (valuable) collections are involved. On the planning side, a prudent testator will want to ensure their collection is put to what they consider its ‘highest and best’ use. This may mean ensuring the collection passes intact to a family member, friend or fellow aficionado. Or, it may mean gifting (whether inter vivos or via a testamentary bequest) to an appropriate museum or archive. Or, it could mean selling or auctioning off the collection. An astute testator/collector likely has some idea as to value of their collection and may be in the best postion to provide guidance with respect to its ultimate dispostion.
Assuming the collection is not disposed of during the testator’s lifetime, it will fall to the executor to handle the dispositon. An executor has a duty to maximize the value of the estate for the beneficiaries. An appreciation of the collection’s value is therefore critical. A fair market valuation may also be required in respect of the calculation of Estate Administration Tax, Income Tax and Executor’s Compensation.
As such, where the testator/collector wishes to ensure their collection is ‘properly’ dealt with, it would behoove them to provide guidance to their, perhaps naive, executor. While I was free to accept whatever price I wanted with respect to my collection, executors should be on notice that they do not have the right to exercise such flippant behaviour and will be held to a higher standard of care.
Coincidentally, a recent discussion developed on Linkedin’s Canadian Will & Estate Professional Group related to the question “[a]ny advice on protecting a collection of historial documents and artificacts’. Given the number of comments received, this issue arises more frequently than I might have expected.
Thanks for reading.