It Could Happen To You:
That heirloom you inherited might be worth a fortune. Or it might not. (Consumer Reports Money Adviser, June 2014)
For most of Deborah Keehn’s life, the collection of contemporary paintings her parents had amassed when the family lived in India during the 1950s was prized for sentimental reasons. “I don’t think any of us were thinking what it would mean” financially, recalls Keehn, a retired educator living in New York City.
Keehn and her five younger brothers were in for a surprise. By the time their father died in 2009 (their mother had died in 1996), India’s new wealth had created a market for contemporary Indian art. Keehn discovered, “People around the world were interested in paying big money for exactly the sort of stuff we owned.”
How big? The auction at the New York offices of Christie’s, one of the top auction houses in the world, brought in more than $2 million. But before getting to that point, Keehn, now 67, recalls, “We had to get serious about what we actually had and what it was worth so we could decide what to do.”
Appraising it. If you unexpectedly inherit something that could be of great value – your great-aunt’s complete first-edition set of Laura Ingalls Wilder’s “Little House” books, for example, or a late 19th-century enameled silver samovar – your first step should be to have it professionally appraised to tell you how much a buyer might pay and what you should insure it for.
Find an appraiser who specializes in that area, advises Linda Selvin, executive director of the Appraisers Association of America. “Almost anyone can hang up a shingle and say they’re an appraiser,” Selvin adds, so make sure they comply with Uniform Standards of Professional Appraisal Practice (USPAP), i.e., they follow the guidelines put out by the Appraisal Foundation. The American Society of Appraisers (www.appraisers.org), the Appraisers Association of America (www.appraisersassociation.org), and the International Society of Appraisers (www.isa.org) all enable you to find local professionals through a ZIP-code search on their website.
A written appraisal can be expensive. Most professionals charge between $200 to $400 an hour to look over your goods, research their background, and write up a detailed valuation. A less-expensive option is an online estimation of value: You upload photos of the item and provide a detailed description, and the appraiser sends back an estimated valuation. If the item is easy to transport, auction houses often give free appraisals, as do jewelry stores, carpet merchants and antiquarian book dealers.
Before you hire an appraiser, you may want to do your own digging, either on the Internet or through your public library. “Librarians are tremendously helpful at getting catalogues which will help you decide whether you have a 1750 antique Chelsea porcelain or a 1930 reproduction,” says Mary Miley Theobald, author of Stuff After Death: How to Identify, Value and Dispose of Inherited Stuff. Kovels.com provides an online price guide for more than 900,000 antiques and collectibles.
Insuring it. While you decide whether to keep or sell your heirloom, make sure it’s insured. Standard homeowner’s insurance policies provide some coverage, says Dan Corbin, director of research at Professional Insurance Agents, a trade association of independent insurance agents, but many set a limit for the amount of coverage – say, $1,500 for jewelry – and most won’t cover one-of-kind items that can’t be replaced.
“At the very minimum, you might need to increase your limit for personal property,” says Corbin, noting that the cost of upgrading your home security system might be offset by a discount on your homeowner’s insurance. However, to specifically cover a valuable object, you’ll either need to add an endorsement to your existing policy or a floater, a separate policy with similar coverage. The cost usually ranges from $48 to $75 a year per $10,000 of jewelry coverage or $100,000 of fine arts coverage, says Corbin.
Selling it. If you don’t want to keep the item, you have a range of options for monetizing it. If you think your item is worth selling by one of the top auction houses, such as Christie’s or Sotheby’s, send them a photo and inquire whether they’ll handle it. “Believe me, they’ll tell you if it’s not worth their time,” says Theobald. At the other end of the spectrum are local auctioneers or antiques shops but, Theobald warns, they may not know enough to price your heirloom accurately and their audience is most likely neighbors browsing for a good deal, rather than serious collectors. In the middle are gallery owners who specialize in particular areas, such as Chinese carvings, and regional auction houses, which are large enough to categorize objects, rather than selling lots at a general auction.
When Theobald inherited her uncle’s collection of German military uniforms, she contacted Cincinnati-based Cowan Auctions (www.cowanauctions.com), whose specialties include historic firearms and early militaria. “The next thing I knew, they were auctioned off for more than I thought,” she recalls. You can find auctioneers and auction houses in your area by doing a ZIP code search at auctioneers.org and auctionzip.com. Expect to pay a sales commission of between 20 and 50 percent of the sales price. You may also have to pay a net capital gains tax for collectibles of up to 28 percent.
If you want to sell the item yourself, eBay works best for items that are easily shipped, such as antique linens or baseball cards. “If it’s big or needs to be examined, like a guitar,” Theobald advises, opt for Craigslist. eBay charges fees of about 20 percent, says Lynne Dralle, who runs TheQueenofAuctions.com, a site that helps people sell goods on eBay.
Selling a valuable heirloom isn’t an easy decision. “There was a lot of sadness,” recalls Keehn. “But each of us gained something that we could translate into improving our own lives.”
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