Carnegie Investment Counsel Blog

A Quarter of Your Net Worth Is Hidden In Plain Sight

Posted by Linda Fousek on Oct 28, 2014 4:51:00 PM


Why do I need to think about my collection in terms of wealth management?

Numerous studies, including one operated by BMO Private Bank, have suggested that 10% to 25% of a family’s net worth can be comprised of art, jewelry or collectibles. This can be the result of a passionate hobby that is enjoyed throughout the course of one’s life or the result of an inheritance. Given the demand for rare artifacts of legitimate value, the price of these items can be astoundingly high.

Unfortunately, some of those same studies suggest that these items are typically left out of the estate planning and wealth management process. Most collectors see their passion as simply a hobby and not an investment, but whenever you are invested into something of significant value, finding the appropriate means to manage it becomes crucial, even if it’s just a collector’s item. In addition, many wealth advisers don’t have the proper knowledge to consult on these items, making it even more difficult to integrate rare collectibles into estate planning.

The lack of attention toward rare items can cost money. Many times the sale of an artifact might result in an unnecessary tax bill or might be sold significantly below its actual value. Even more issues to consider are the potential multi-generational feuds that could result from a wasted financial opportunity on a rare item or the exorbitant fees auction houses charge for each sale.

Your Collection Represents

  • a significant portion of your finances
  • the learning and life experiences of the collector
  • a legacy
  • significant financial opportunities, as well as significant potential pitfalls to you and your heirs

What Makes Carnegie Different?

Our investment team has avid collectors and trustees from museums with real world experience to handle the unexpected issues that inevitably arise from the sale or acquisition of rare collectibles. We understand from a hands on perspective how to handle the delicate decision making process regarding collectibles in order to avoid the unintended consequences resulting from a lack of preparation and improper execution.

What Can We Do For You?

  • We can help structure a plan that accomplishes your goals for the collection, whether we focus on keeping it together, using it for charitable purposes or maximizing its after-tax monetization for you and your heirs.
  • We can provide the guidance needed to determine what you have and what it’s really worth.
  • We can assist you with negotiating, structuring and using complex charitable gifts to serve multiple purposes, including ways to turn such a gift into current income and legacy funding.
  • We can assist you in finding the appropriate venue for monetization of your collectibles, including negotiation of fees.
  • We can provide estate planning for artists with the aim of preserving their work and monetizing it over generations.
  • We can offer advice on when it is the right time to monetize a collection based on trends and market research. The art market is highly cyclical and certain categories of rare items go in and out of favor.

Let’s Get in Touch Today!

Your collection has a special meaning to you and represents a significant monetary asset. It was built through a great deal of  effort and thought. The management of it requires a level of hands-on experience and expertise the team at Carnegie Investment Counsel can provide. For unbiased advice on a completely confidential basis,contact us.

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Topics: Investing

Linda Fousek

Written by Linda Fousek

Linda Fousek serves Carnegie Investment Counsel as Portfolio Manager. With experience, integrity, and empathy, Linda helps her clients reach their unique financial goals. Linda’s focus ranges from working with individuals and families to endowments and foundations as well as public funds.

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