In his May 29, 2015 article, Paul Sullivan of the New York Times uses the first sale of the $200 million D. Brent Pogue collection of US coins to explain the strategy for selling private collections. Mr. Sullivan notes that contrary to the splashy news of the one-day art sales breaking the billion dollar mark, selling a collection requires both good timing and a good story. Placing key coins into separate auctions helps carry the more common coins along for the sale. This is also true for how and when the sale is made: public sale v. private sale; auction v. gallery; catalog v. internet.
As good as this article is, I have a few thoughts to add:
- Know what you have and let others know too. Keep an inventory of some kind detailing the times you buy, inherit, or acquire artifacts in your collection. Be sure to construct a narrative in a form that helps others understand the story behind your collection. As Sullivan points out, a good story enhances the aura of the collection..
- Understand the passions involved. Although Mr. Pogue seems very level headed both about the value and the ownership of the coins, most people are not so objective when it comes to either cashing in on the appreciation value of art or collectibles or maintaining ownership and control of a collection. Using a mediator to adjudicate between these rival goals—especially where the collection is co-owned by the heirs of the collector—can be helpful.
- Use block sale to your advantage. The disadvantage of selling all of the collection at once can be used to your advantage when you plan on gifting some or all of the collection to your heirs. According to the IRS regulations, gifts of tangible property are valued as if the items are sold on the date of the gift, which includes the likely discount for selling both the key items and the more common items all at once.
Mr. Pogue is both wise and lucky. He is proactive in organizing and selling his extraordinary collection. However, many collectors do not see the value of spending the time and money to plan for the transfer of the collection now when the results of the transfer may be years from now and may even occur after their death.
It is advisable to spend the time and money to complete the specialized planning for your collection now. The alternative could result in the tearing apart of your collection and your family due to the differing financial and emotional goals of your heirs.