Many entrepreneurs and business owners are collectors. You can see this among your friends, in TV programs about famous collectors, or at estate sales. I know a number of military medal and militaria collectors through a family connection.

Many small business owners neglect to plan for their death or disability’s impact on their company – and many collectors do not think ahead about their collections. If you have been a collector for even a few years, you have heard the sad and bad stories of spouses ripped off by ‘friends’, families riven by arguments on ‘Dad’s collection’, or the whole lot dumped into the trash/Goodwill bin.

Planning what happens to your collection is vital. You know better than anyone what you want to happen to it. And if you love your heirs, you want to be sure that they know too. Collectors have three big considerations in their disposition decisions: emotional ties to the collection, financial aspects, and the time invested. These will influence what decisions you make and how difficult it is to get an action plan developed.

This outline, from an OMSA Convention seminar, is designed to help you think through the process and document your desires effectively. None of us like to think about our death, but it still is necessary.

What Do You Want to Do with your Collection?

A. Gift it

The first thought of many collectors is to pass it on within their family. But if there is not someone already interested, it is unlikely that will change unless yours is a young family. The same is true for friends. So if you are thinking of gifting your collection to someone, do confirm their interest now. Also consider: some family members or friends might like a memento from your collection even if they do not collect anything.

B. Donate

Many collectors hate the thought of anything going into a museum instead of the collecting community. If you want to donate some or all of your collection, do your homework. There are too many museums that already have extensive collections moldering in storage.

Once you have picked an organization, e.g. major museum or community/local museum, university, you need to contact them and learn their process. If they are interested, are they still interested with whatever conditions you may want to make? This is a legal negotiation as well as one with tax considerations. Make sure you have the right advisors on your side.

C. Sell

Selling a collection can be especially emotional. We all think our own stuff is valuable, often far more valuable than is realistic. When you decide to sell your collection, you need a smart plan to ensure you get the maximum value within the needs that you have. You have to consider how much work you are willing to do and how to create a time-frame that makes sense. Collections are not as liquid as other investments that you can sell easily, such as stock.

Do you want to sell your collection yourself? There are always some people at antique shows or collector conventions who have decided to handle some part of their collection directly. But if you have an extensive collection, are you ready to put in the effort and time to sell and ship and track payments?

Perhaps you might decide to sell through an auction house. Plan now but keep up your knowledge of who is best at what – and update your plan as needed. Consider whether you may need several different auction houses or ones in other countries to get the most value. Plan for the fact that this process takes time and even moderately large collections will need to be sold over multiple auctions to obtain maximum value. Talk with the auctioneers you are most interested in to learn their process, time-line, and how costs are handled.

You may also wish to sell all or some of your collection via a dealer. Here too your needs may dictate several different dealers and the right dealers may change over time. Don’t just tell your heirs which dealers are the best matches. Add in a list of those you do not want them to deal with – you know you have some.

In thinking about this part of your plan, also think about when you will begin to sell the collection. Too often disability or serious illness creates a crisis where the money may be needed or the ability of the person to now direct the process is impeded. Years in human resources have made it very obvious to me how few of us prepare for these common happenings.

Write Your Plan Out

Written plans are far more effective. Research shows that they are more realistic and more successful. They provide guidance in your absence or disability. Make sure your spouse or heirs know where your plan is. Having this plan in a notebook as well as an electronic file is often the smartest way to ensure it is accessible but also updated regularly.

  • Start with a full inventory and update it at least annually.
  • Include the information on what you want done with your collection, who to contact, and which tax or legal advisors will assist. Include the contact information for every person or company you want used.
  • Address specific sub-collections individually, as needed.
  • Pick a date – perhaps your birthday – and review your plan at least annually. Update it as needed.

Creating your plan will take some time and thought in the beginning.  Then it becomes easier to manage.  It makes your desires known and is a gift to those you expect may have to handle it when necessary.