Rinker on Collectibles

RINKER ON COLLECTIBLES — Column #1720

Passive Collectors

This is the second part of a four-part series on maximizing the return when selling a collection of antiques and collectibles. Part I dealt with the realities a collector must accept when it becomes time to sell his/her collection. Part II focuses first on the question of when is the best time to sell from a collectors’ viewpoint, second the process of making the decision to sell, and third what steps need to be taken when collectors decide not to sell.

Most collectors wait too long to sell their collection(s). By the time they are ready to sell, the secondary market peak for their collection(s) has long passed. Deciding to wait for the market to recover is a mistake. The past four decades have proven that most secondary markets never recover and, If they do, only the high end grows. The common and middle portions of the market, the classifications into which over three-quarters of the object in most collection(s) fit, do not.

There is a collecting curve for every collecting category. Collecting categories no longer recycle across the full breadth of the category. A viable collecting category usually has a life of one, two, or three generations for all objects found within the category. When evaluating the collecting lifetime of a collectible category previously, the standard question was, what is going to happen to all the objects in that category when the generation who grew up and used them dies? Today, the question is what is going to happen to all the objects in a category when no one is interested in collecting them any longer.

[Author’s Aside #1: The modern antiques market’s infancy occurred in the 1890s and 1900s. Its adolescence took place between 1910 and 1950. It matured in the 1950s and 1960s. It broadened in the 1970s and 1980s when collectibles became an integral part of the market. It showed signs of old age in the 1990s and the first decades of the 21st century. In human terms, 150 years is a long time. In historical time, it is a relatively short period. If the antiques and collectibles market learned any lesson in the last three decades, it is that nothing lasts forever.]

There is an individual collecting chronology. While not true for every individual, it is for the vast majority. Collecting interest develops within individuals between the ages of 25 and 35. Their childhood is affordable and they have disposable income to spend. Collectors test the waters, buying a little of this and that until they find a collecting category or categories that excite them. Serious collecting takes place between the ages of 35 and 60. This is when the allure of the hunt and the desire to build a collection are strongest. When collectors enter their early 60s, collecting interest starts to fade.

There are age considerations that face collectors in their mid-60s. Advanced collectors find that 95 percent or more of their collection(s) have been assembled. Pieces that remain to be added are high-end and expensive. Space becomes a premium. The ability to sustain collecting enthusiasm and passion becomes harder and harder. Retirement and worsening health issues, two unavoidable age considerations, rear their ugly heads.

Collectors stop adding to their collection(s) in their early to mid-70s. There is a major difference between the mindset of a sixty-year old and that of a seventy-year old. Thanks to modern medicine, most individuals in their sixties do not feel vulnerable. If 50 is the new 30, then 60 is the new 45. Collectors in their early sixties approach collecting much as they did in their 40s and 50s. As collectors approach 70 years old, the change occurs.

Vulnerability becomes a consideration when one turns 70, a feeling that steadily increases as one approaches 80. I speak from personal experience. All my “it will never happen to me” claims have false bravado. The more I try to ignore my pending vulnerability, the more I think about it. I plan to collect until I die. I would prefer it be long into the future rather than sooner.

The eventuality of downsizing is the true culprit, not retirement nor the continual demand of spouses/partners, children, and friends to get rid of the collection(s) while the collector is alive. The number of individuals who remain in their home until they die is decreasing. Downsizing is a dirty word to collectors. Downsizing means something has to go. Most often that something is part or all of a collection(s).

[Author’s Aside #2: My wife Linda has started to investigate retirement communities. Each brochure she brings home for me to examine has one common element – less space for my things.]

When collectors reach 80, it is time to make the difficult decision about whether or not to dispose of their collection(s). Thinking this is mind boggling. Writing this is painful. The only positive is that a decision not to sell is a decision.

Every collector knows that antiques and collectibles collections are not easily nor quickly liquidated. Developing a proper disposal plan is a multi-year project. Collectors’ primary goal is not to find themselves in a “have to sell now” situation.

In talking with collectors over the years, I found a common theme. Much to my surprise, I found older collectors want to be involved in determining how their collection(s) are liquidated. The older collectors become, the more their desire increases toward disposing of their collection(s) with a warm rather than a cold hand.

Part III and Part IV of this series will discuss what steps collectors should take once they make a decision to sell. What follows are the steps collectors should take if they plan to still own their collection(s) when they die or, heaven or whomever forbid, die unexpectedly. Much to collectors’ dismay, they have no control over the latter.

Collectors need to create a will that specifically spells out how they want their collection(s) to be dispersed. Collectors have a bad habit of not sharing their sources with spouses/partners, children, or executors. A list of who (auctioneer, collector, dealer, or friend) can be trusted is essential to any set of instructions. When multiple collections are involved, there need to be multiple lists. The key is to identify individuals who will put the interests of the heirs first and personal interests secondary or fully removed from consideration.

Collectors planning to bequeath their collections to family members, friends, or institutions are usually deceiving themselves. Ask a few basic questions: (1) where is the person going to put the collection [most individuals today do not have enough room for the things they own]; (2) is the person or institution going to preserve or grow the collection(s); and (3) is keeping the collection intact for another generation adding or detracting to its value. Before willing a collection to anyone or an institution, make certain they want the responsibility of owning it and establish clear expectations of what is expected from them.

Collectors need to issue specific instructions to an executor to have an appraisal done. Again, a list of potential appraisers should accompany the will. Appraisers should be told to do a fair market value appraisal, not under appraise the objects to lessen a potential tax burden. The appraisal price to heirs is their “cost of goods.” If appraisal prices are too low, the heirs face potential capital gain taxes should they decide to sell in the future.

Identify the ultimate units (masterpiece) and upper echelon pieces in the collection. At the very least, create a list describing the top 50 to 100 pieces in the collection, provide acquisition provenance and an estimate of what they would bring on the secondary resale market. Ideally, this should be done for the bulk of the collections.

I need to follow my own advice. I bought computer software and a digital camera to start the cataloging of the items in my collection two years ago. The camera and accessories still are in their boxes. I am determined to get started in 2020. I have made the same promises to myself the last several years. Time is a fleeting commodity. My time to act is now.

In the past, I have suggested that collectors answer the “what is going to happen to the collection(s), when they die” question with “when they are dead it is not their problem.” Although true, this answer becomes increasingly less satisfying the older collectors become.

Part III of this series will explore what happens once the decision to sell is made. Part IV will explore briefly the positives and negatives of various sale venues.

Harry L. Rinker welcomes questions from readers about collectibles, those mass-produced items from the twentieth and twenty-first centuries. Selected letters will be answered in this column. Harry cannot provide personal answers. Photos and other material submitted cannot be returned. Send your questions to: Rinker on Collectibles, 5955 Mill Point Court SE, Kentwood, MI 49512. You also can e-mail your questions to harrylrinker@aol.com. Only e-mails containing a full name and mailing address will be considered.

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