Today I just heard the story about a woman who bought a painting in a garage sale – a painting that could turn out to be an original Picasso.
This $2 purchase could be worth a couple million dollars on the art market. What a find if it proves to be true!
As I work with clients documenting the details of their wishes for their personal items, I come across a lot of things that could easily end up
in a garage sale by mistake “waiting to make someone’s day.” The generation coming up stands to inherit not only large sums of money, but true works of art or collector’s items. So what happens when the time comes for the family to transition the items? How do you split up valuable pieces of art between siblings? Worse is when the family doesn’t know the value of items in the house and hires someone to just sell it all because they don’t have time to deal with it. (thus the newsworthy garage sale finds)
I recently had coffee with two of the most interesting ladies who own Whimsey Appraisals to learn more about the value and process of getting an appraisal. Kristel and Glenda Overfelt are extremely sharp ladies with a skill for appraising anything from antiques to fine art. I was amazed at what I learned over coffee and thought I would share it with you.
What is an appraisal?
An appraisal is a professional estimate of the value of something. People usually have items appraised for insurance purposes, tax strategies, estate planning and settlement, etc. I was surprised to learn that in order for an appraisal to stand up in court, there are specific things that need to be in an appraisal report. This is the difference between a written statement of value and true appraisal report.
Value of a True Appraisal Report
Many times family members come in to do an inventory for the probate court when a loved one passes away. They assign what they think things are worth for the sake of the estate settlement. Glenda told me that it is common they go to appraise someone’s valuables, and the values assigned to the items are not close to what they should be – either over or under an appraisal price. A lot of times it will alter the course the family takes – either keep the item or sell the item through a channel other than a garage or estate sale. A good appraiser should be able to help you with information on how to go about selling valuable items and your options for asset disposition. I am currently working with a client who has many works of fine art and it will be a true challenge for his heirs to split up and dispose of the property in an equitable fashion. Unfortunately, I think this will have an impact on his heirs after he is gone.
If you have valuables that need to be insured, you will also need a professional appraisal report to stand up to an insurance claim. If you have a 14th century chair you insured for $5000, then you will have to prove the value of that chair if your home burns down or it is stolen. Values can be nebulous when it comes to settling an insurance claim. Better to be safe than sorry later for not being able to defend it.
There are a lot more reasons for getting an appraisal report such as settling a divorce, donating to valuables to a charity for tax write-off purposes, downsizing your estate or even if you want to purchase an object. Since I am in the planning business, I am especially interested in the process and value of appraisals in estate and survivorship planning.
It is a true challenge facing the next generation – what to do with all that stuff! There are emotional obligations being passed down along with the responsibility to dispose of it wisely for the benefit of the heirs. Addressing the value of your personal belongings now, as well as the disposition of your property, will lessen the load on your family when you are gone. Your lack of planning could end up in the news when someone purchases your extremely valuable painting for a few dollars in your family’s garage sale.