How to manage the succession of your collection

Reading time 13 min

1. Introduction
2. Why take inventory of your collection?
3. How to estimate a collection?
4. How to calculate inheritance tax?
5. How to share a collection?
6. How not to forget anything when the time comes?
7. Making a donation or bequest from your collection

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 Introduction

“Your collection is something of a life's work. You have devoted your free time, your heart and often your savings to it. You have in mind the subject of succession but, in the family, these are questions that one does not discuss too much… We will see later. Your children are not very interested in your passion, nor is your partner. In the corner of your mind, you wonder what will happen to your prized possessions after the grim reaper has passed, and then you think about something else.

If you find yourself in these few lines, I encourage you to read the rest of our article which will certainly help you ask the right questions at the right time.

In fact, a good transmission of one's heritage, and more specifically of one's collection, cannot be improvised. It must be organised during one's lifetime in order to protect one's loved ones by preparing the steps. During this difficult period, you don't want your estate to become a bone of contention for your family and sound the death knell for your collection.

Why should you make an inventory of your collection for an estate?

Even for a specialist who has devoted his life to a collection theme, inventorying it is not an easy thing. The state of the art of knowledge in a given field can change over time, certain identifications can be questionable, experts can make mistakes, very fine copies (ancient or modern) can be made, and the collection can be lost; Some beautiful copies (ancient or modern) are often hidden even in prestigious collections, or more simply, labels can get mixed up during transport.

It will obviously be easier for a hoarder to get away with a collection of commendable 2 euro coins than with a set of ancient Egyptian antiquities... But in any case, this period of life is not the right time to make an emergency inventory of a collection, especially if we have always considered our loved one's passion as a nice fad without ever really getting into it.

Case of an inventoried collection

In the ideal situation, the deacon took the lead and, during his lifetime, began to inventory his collection as thoroughly as possible. This sometimes tedious work is one of the most important things to do, and ideally should be done as acquisitions are made throughout his life.

The difficulty in keeping a precise inventory lies in the eventuality of acquisitions. It is almost impossible for a collector who has acquired works from the 1960s to have in his or her possession all the evidence of the provenance of his or her possessions. The slightest information recorded will, however, allow one to prove one's good faith about the consistency of the whole.

Case of a non-inventoried collection

The trouble starts for the owners of a collection that is not inventoried, or whose inventory is incomplete. Tracing has not always been a societal issue, and proofs of ownership are not always present in case of litigation.

A seemingly modest collection can be full of real treasure when a collector has devoted his life and money to his passion. It is not impossible that this passion includes items of cultural or financial importance.

As scarcity often hides in the details, dealers will often be confused by a collection they know nothing about. And it's a mild understatement to say that a holiday is not the best time in one's life to manage this phase.

The call for an expert will therefore be essential. But many questions will then arise:

• How to find the right expert?
• Should more than one expert be involved?
• Does the expert have to be on site to value the property?
• How long does it take to get my collection appraised?

How to value a collection in an estate?

Having an exhaustive inventory of a collection is necessary before looking at its estimation. But I advise you not to rely on an old purchase price indicated on a label, it can be misleading for many reasons:

• There are fashion trends in certain collection themes. These trends can cause prices to fluctuate sharply up and down, and inflation has certainly come and gone.
• It is possible that the buyer got a very good deal. It is not that uncommon for a collector to make x10 or even x100 on the price of an item.
• And conversely, it happens to any collector to buy an object that is too expensive, whether it is by mistake, under the influence of alcohol or drugs; It's a good idea to have a look at some of the items that are available on the market, but it's also a good idea to have a look at some of the items that are available on the market, so that you can see what they are.

In the context of an estate, the valuation of a collection can be established in 3 different ways:

• By the price of a public sale held within 2 years from the date of the sale.
• If no sale is held within 2 years, the price stated in the inventory of inheritance will be considered for the purpose of calculating taxation. This inventory must be drawn up by a notary, a judicial auctioneer or a bailiff.
• If no legal inventory has been drawn up, the estimated value in the parties' declaration of intent must be retained. This estimate may not be less than 5% of the value of the other assets of the estate.

If you wish to have your collection appraised, we advise you to call on a professional in the sector with a good reputation. You should not hesitate to consult several professionals. These professionals may be dealers, auctioneers or independent experts.

If the collection is insured, the estimate in the insurance contract may be used to calculate the inheritance tax. If this estimate is overestimated, the bill will be paid by the heir(s) on the day of transmission. Be careful, therefore, to have your objects valued at the right price, even if this is not necessarily the case, as this data can be subjective.

How to calculate inheritance tax on an estate?

The transfer of works of art or collectors' items is subject to taxation.

First of all, a distinction must be made between 2 types of goods. A collector's item such as a statue or a painting with a purely decorative use will be considered as a furniture.

Property placed in a collection or gallery loses this qualification, and will therefore be subject to the tax treatment applicable to art and collectibles.

Determining inheritance tax accurately is therefore not so simple. In addition to the 2 possible classifications, your inheritance tax depends on the debts, the relationship with the deceased, the amount of the allowance, etc.

Furniture case

If you do not have an inventory of your assets, the tax applied will be that of movable property based on a lump sum of 5% of the gross estate assets (net assets = gross assets - debts).

Concretely, this means that if you inherit a house worth 500,000 euros, without an inventory of assets, and the collectibles are considered as furniture, they will be arbitrarily estimated at 25,000 euros. If you think these items are worth less, you will need to have an inventory made to prove it.

Case of art and collectibles

If your collectibles are not considered to be furniture, the inventory will be essential and you will not be able to pay the flat-rate tax.

A collectible is characterised as such if it possesses all or some of the following properties: rarity, age, greater value than a similar object still in circulation, discontinued manufacture, cultural or historical interest, belonging to a specific person; This category includes stamp collections, vintage cars, antique coin collections (See article Why-and-how-to-buy-gold? for the particular case of post-1800 gold and silver coins)...

The estimate used in the inventory will therefore be used as a basis for calculating the amount of the donation. We invite you to refer to the previous paragraph detailing the 3 ways to estimate your collection.

How to share a collection?

When inheriting a collection, the first and not least question is the fate of the collection. Some collectors may wish to sell the objects and get the money back in hard currency, while others, out of affection or passion, may wish to keep all or part of the collection. In both cases, it will be essential to have the most accurate inventory in order to facilitate the sharing process. The valuation process will be greatly facilitated if the inventory is as accurate and comprehensive as possible (photographs, descriptions, invoices, certificates of authenticity, valuation).

A will makes it possible to organise the distribution of one's property during one's lifetime and to formulate one's last wishes.

As a reminder, the heir is the person who succeeds the deceased, either by law because of a family relationship or by a legacy made by will. To find out whether you inherit a succession and to calculate your share of the inheritance, two situations must be distinguished. If the deceased did not make a will, the order of priority of the heirs determines the shares of the estate.

In order to prioritise the heirs, they are divided into four Orders. Each Order is further divided by Degrees.

In the absence of a surviving spouse, the table of Orders and Degrees is as follows:

If the deceased has made a will, he/she must reserve a portion of his/her estate for certain heirs and may allocate the remaining portion to persons of his/her choice.

Some items may have a particular history with one of your children or relatives, so it is very important to avoid disputes that they are interested in your will to facilitate the division.

It is possible that not all heirs are interested in the collection. In this case, the dealer wishing to keep the collection will have to pay compensation to the other dealers.

This situation is not necessarily straightforward where the collection is difficult to estimate.

And if you thought you were passing on your heirloom to your pet as you may read in the press regularly, French law forbids it!"

How not to forget anything when the time comes?

Is your collection scattered all over your house, some of it hidden in a table leg? Some of it has been preserved in a museum and some is stored in a safe deposit box in the bank? Is your inventory on your personal computer, which is password-protected? Do you have multiple accounts on multiple online forums?

Having a ready-made inventory of your collection is a good thing, but your loved ones still need to know about it and how to access it.

We invite you to take a look at Legitbee, a solution that allows you to facilitate the management of your estate through the creation of a listing of all your possessions, whether physical or digital.

Concretely, on CollecOnline, you can make a precise and exhaustive inventory of your collection, and on Legitbee, you will be able to indicate the existence of your patrimony in a more global way, listing for example:

• Your online accounts (CollecOnline, Clouds, trading, cryptocurrency, online games, social networks...)
• Your assets in France and abroad (accounts, securities and investments, real estate, professional assets...)
• Your digital memories (photos, videos, genealogy, recipes...)*
• Your administrative and contractual data (all information necessary or useful to manage the estate)

The point of this solution is to be able to sign off on people you trust and to secure important information . Once the time comes, all this information will be automatically transmitted to the people you have signed and your notary if you wish, so you don't have to start a real treasure hunt in your cellar, attic or computer!"

Make a donation or bequest of your collection

A donation to the state to pay off tax debts

In a market of protection of heritage, following the Malraux law of 1968, it is possible during an inheritance to extend one's tax debts relating to the inheritance by making a gift to the State; the succession by donating to the State (if the latter is interested) collectors' items. However, be careful not to spend the amount of money, as the state will not reimburse the overpayment.

Donate his brokers

When inheriting a property, you can benefit from a tax allowance. In addition to this allowance, you will have to pay taxes which will be calculated according to a progressive scale. This deduction for a child is 100,000 euros, below this amount there will be nothing to pay.

Moreover, this abatement is renewed every 15 years! If you have a large collection, it may therefore be worthwhile to anticipate your inheritance by giving part of it to your children during your lifetime.

If your collection is too valuable, your children may not be able to afford to buy it back when you pass it on and will therefore be forced to sell all or part of your collection to pay the inheritance tax. A little tip in passing for “patrimonial” profiles. You can take out a Prévoyance décès viagère which allows you to cover inheritance costs.

Donation to an association, a foundation or a museum

If you own a work of art or a collection item of great cultural value, it may be of interest to a museum, a You can then avoid paying inheritance tax on this work by donating it to a charity or a foundation of general interest. It is possible in this case to avoid paying inheritance tax on this work by donating it to one of these organisations.

The donor may even, in this case, negotiate with the museum the conservation of a right of enjoyment for his or her work during his or her lifetime. That is, he will keep the work in his home until his death before it is actually passed on to the museum!

Legs with load

We also invite you to dig into the issue of bequests with encumbrances. If your estate is heavily taxed (absence of close family, for example), and you wish to benefit both a friend and a general interest organisation with part of your estate, this choice will allow you to combine the useful with the pleasant.

 State assumption of a National Trésor

The sale of an exceptional collection can yield many surprises for the heirs. A piece that is considered a national treasure can be loaned by the state or national museums. In other words, the latter may acquire the object in place of the last bidder. He may also prohibit the removal of the work from the territory.

Loïc Schappacher, de CollecOnline

Sources

• Lethal finishing of the notion of collection 

• The universal leg with charge

• Legal valuation of movable property and collectables

• Inheritance tax calculation simulator