Many of us have collections – some valuable, some not. The wealthy are particularly avid collectors, according to a new study.
Nearly six in ten high net worth households collect valuable items that they keep as assets, ranging from classic cars to rare coins to fine wine.
Most of the collections are worth more than $100,000, and nearly one in ten millionaires owns a collection that is worth more than $1 million. That’s according to the 2013 Insights on Wealth and Worth report by U.S. Trust, the nation’s oldest trust company.
The types of collections owned by the 711 respondents to the survey – all of whom had more than $3 million in assets in addition to their primary home – include:
- Fine watches or jewelry, 35 percent
- Fine art (paintings/sculpture/photographs), 31 percent
- Rate coins or stamps, 20 percent
- Fine wine, 13 percent
- Classic/vintage/high-performance cars or motorcycles, 12 percent
- Rare books or papers, 7 percent
- Something else, 2 percent
While the primary reason for the collection is personal enjoyment, one-third of the collectors see their collections as investments. Of them, 40 percent of men and just 19 percent of women expect a return on their investment, according to the report.
Perhaps surprisingly, many have not taken sufficient action to protect their collections.
- Nearly 40 percent do not maintain documentation of authenticity and purchase/sale records
- Half have not purchased supplemental insurance coverage
- Nearly 60 percent do not have an up-to-date appraisal
- Up to 80 percent have not outlined wishes for the collection in their estate plan
- Nine of ten have not sought professional tax, legal or financial advice
If you’ve assembled a significant collection, consider addressing the issues above as soon as possible, as well as meeting with a financial adviser to assess how your collection fits into your overall financial and estate planning.