As many people who know me and read this blog know, I have collected wine for the past 20 years, and take great pride in my wine cellar. For my estate planning clients, wine is an asset like any other, it must be planned for. A large collection may have to be sold or may be passed on to a family wine lover. While wine is the ultimate liquid asset, it is not really liquid for paying estate taxes, so that must be planned for as well.
A recent article by Julie Sherlock of Ace Private Risk Services also provides some advice for you and your heirs.
Ms. Sherlock had three main suggestions for wine collectors:
1. Keep a wine inventory and track values, which should be updated every couple of years. After all, you can’t insure something if you do not know its value.
2. Obtain what is called a Valuables Policy for your wine because it is not likely your homeowners policy would cover a loss for your collection.
3. Safely maintain your collection to prevent loss including the following: maintaining the appropriate temperature, do not store your collection in a location that could flood, store your bottles on their side to prevent oxygen intrusion, and hiring shippers that specialize in shipping valuables.
I’d add the following suggestions:
1. Be sure to select who is going to receive your wine at your death. You must provide for an orderly disposition.
2. Make sure that your Executor knows that the wine you have may be valuable. There are too many stories of unknowing Executors either selling the wine at ridiculous low prices or just throwing the wine out.
3. Drink your wine while you are alive, after all, the main purpose of wine collecting is enjoying your wine and sharing it with your friends and family!