Prepare Your Estate Administrator
By Elizabeth C. Pope
Every collector should prepare the person who is to be the estate administrator well before the time comes to disperse the estate. The two foregoing articles have focused on what the collector can do to protect his philatelic estate by organizing, evaluating, and seeking professional counsel from legal and financial advisors.
Let us assume that these steps have been taken. The next step is to convey the results of these steps to the estate administrator. The information produced by these earlier steps should be put in written form. The names, addresses, phone and fax numbers of the legal counsel and financial advisor should be provided for the estate administrator. Then, the collector should provide notations as to the general nature of the stamp collection, the location of the material, and a rough idea of the value. Many collectors are reluctant to divulge an accurate valuation of the collection, for various reasons. This estimate of value can be written down, placed in a sealed envelope, with instructions that the envelope is not to be opened until after the death of the collector.
The collector should also instruct the estate administrator as to whether the collection is insured, and for what amount, along with the renewal date of the policy.
It is advisable for the collector to have written instructions as to the friends or dealers whose advice should be sought in the dispersal of the collection. The name of a specific person, rather than a company, should be stated, since personnel moves around within the industry, changing the character of a stamp firm or auction house. If the estate administrator is a spouse or relative, the collector should seek an opportunity to acquaint the administrator with the dealer or dealers with whom he does business regularly. Having breakfast or a drink together at a stamp show will enable the administrator to work more comfortably with the dealers when it becomes necessary.
The advisors on legal and financial matters will have told the administrator whether a formal appraisal is needed for estate purposes. Once the appraisal is completed, the administrator is ready to explore the selling process.
The various methods of selling should be explained to the estate administrator, with the pros and cons of each method. The administrator should also be prepared for the fact that approaches will be made from collectors and dealers as soon as the death of the collector becomes known. Some of these will offer to sell the collection on consignment, making payments to the estate as sales are consummated. This method can result in the better pieces being sold quickly, leaving less desirable parts of the collection to be sold very slowly or sacrificed in order to wind up the estate.
If the collector has left instructions, it is advisable that these instructions be followed. In the absence of instructions, or where the instructions suggest several names to be contacted, the administrator will have to decide between outright sale and public auction. Outright sale is the route often followed if there is immediate need for funds, to provide liquidity to satisfy estate taxes, debts, or other expenses. Auction is the preferred method of sale to maximize proceeds, to reach the widest market, and to provide an unassailable value basis, which is particularly useful if there are several heirs. Usually an auction house will waive the appraisal fee if the collection is consigned within a reasonable time. The administrator should ask the auction house for a proposal setting out commission terms, insurance coverage, auction estimates, any charges to be assessed, time and place of the auction, date of payment, and providing samples of auction catalogues. Whatever method is chosen, all aspects of the transaction should be covered in a written contract. Clear communication between the administrator and the dealer will help them to work together, not as adversaries, but as partners, to achieve the common goal of successful handling of an estate.
Elizabeth C. Pope is a Vice President of Robert A. Siegel Auction Galleries, a member of the Smithsonian's Council of Philatelists, and is a Director of the American Stamp Dealers Association.
This article provided through the courtesy of Women In Philately, which sponsors a series of seminars that includes information such as that presented here. The information and facts herein are provided as a gratuitous service and are not intended to substitute for personalized professional advice. The reader should realize that these ideas are not updated nor are they tailored to an individual situation, but are provided as an intellectual starting point. Please consult with appropriate professional advisors.