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Philatelists spend a great deal of time accumulating their collection which is an enjoyable activity that consumes both time and capital. Integral to the consideration at time of acquisition is the intrinsic value of the investment. Ideally, as collectors, if one were able to dispose of the asset on ideal terms and conditions, then the investment would likely realize, its true value. However it is not always possible to achieve these ideal conditions and one may not to be able to dispose of the material themselves for a variety of circumstances, not the least of which could be the death or incapacity of the person, and for that reason there is a need for what is termed “estate planning”.

Estate planning is perceived by some to be a difficult task, and it is often approached with much reticence and trepidation, simply because it is perceived as requiring much legal expertise. It is true that professional advice is required, however the primary aspect of estate planning is simply documenting what the individual wishes the executor’s will accomplish when acting on the individual’s behalf in accordance with his aspirations. Thus the first step in the “ESTATE PLANNING PROCESS FOR PHILATELISTS” is to document what the individual wishes to accomplish with regards to the disposition of his/her collection.

Philatelists are not unique in their avocation, wherein they concentrate on acquisition but do not contemplate; with as much enthusiasm; the disposition of the collection. Since your stamp collection is likely to be the most unusual and difficult portion of your estate to administer, it is essential that you safeguard your wishes, desires and aspirations with regards to your collection in a written document. The chances are that none of your family members nor your administrator are experienced philatelists, so with some advance planning you can help them attain maximum value from your material. Time is also one of the allies of the executor in achieving the best realization, so a little foresight on your part can make a major contribution towards this goal.

Thus the A B C’s of Estate Planning:

A. Advance planning for the disposal of your collection, essential for several reasons
B. Build a valuation document.
C. Cataloguing your collection.

• An organized collection makes it clear what you own and thus what is required to fill the gaps, should you continue collecting.
• Your inventory will be an invaluable document should you have to negotiate with your insurance company in the event of a loss.
• In the event of incapacity or disability the collection can likely be disposed of in an orderly fashion possibly generating funds that may be required for your care.
• Clear instructions on value and method of disposition will avoid confusion and possible differences among beneficiaries. (Dealers/auctioneers generally cringe at the thought of having to deal with a collector’s spouse or heirs who are generally confused and untrusting)

1. Get organized and stay organized
2. Prepare an Inventory (catalogue your collection)
3. Prepare a reasonably accurate valuation
4. Record special bequests
5. List Options for Disposal
6. Prepare instructions for your administrator
7. Consider the Tax Implications of the Sale

• Lifetime accumulations of loose stamps and covers stuffed into thousands of envelopes, shoeboxes, tins, etc.
• Avoid the house that is full of unorganized material (most dealers/auctioneers will cringe at the thought of handling its disposal.) It is possibly the worst case for your heirs because:

o there is too much material to handle in an orderly fashion.
o one can’t easily tell the gems from the run-of-the-mill,
o the fees charged to evaluate the material will likely seem too high.
o pilfering is easy
o disposal may take a long time
o anyone willing to buy it outright will likely offer what seems a very low price.

• Intact exhibits - They tend to sell better than if they are broken up.
• Covers and specialist items, on pages along with relevant research findings will help the assessor make a timely and proper valuation.
• Printed albums – Since they are arranged according to catalogue order making it easier to prepare an assessment. In addition the more valuable items are easier to identify.
• Stock books – If the contents are arranged in catalogue sequence.

The value of your collection is not market value. Remember that items you acquired at a fraction of catalogue will sell at the same kind of discount. Condition is the essential factor in stamp value. If you have acquired damaged or defective items, you are kidding yourself and your heirs if your collection is valued or insured at full catalogue. In making an inventory, list nominal catalogue, the discount value to replace with comparable material, and then a deeper discounted value, which might be realized at a forced sale. Any collector who stays current with auction realizations knows the difference between the prices for superb copies and the discount realizations for average or defective copies.

Finally, all this information should be kept with your other valuable papers so that it is easily available when the time comes. Also, if you have thought it best not to reveal to your spouse the true amount you spent on your collect, consider placing your valuation in a sealed envelope with instructions as to when it is to be opened.

Whoever is retained to do an assessment of your collection, deserves to be properly remunerated. Make this clear to your administrator and your heirs. It is not the time for them to be cheap. Insist that this be done as a business transaction with fair rates of pay. Insist that they receive two appraisals or offers. You need to prepare a short list of those you want to do this job otherwise the first two names in the yellow pages of those closest to the office of the administrator will be the ones that are used. Be sure to leave precise instruction for your administrator clearly identifying the material to be disposed of and in which fashion. In addition, list names and contact information. Otherwise, your valuable collection that took you decades to build maybe sold on the basis of looking in the yellow pages.

4. RECORD SPECIAL BEQUESTS

If you have promised any item(s) to another collector or organization, such designation must be in writing along with the terms of transfer. Your heirs may be swamped with alleged promises of this type. The way to protect your heirs is to leave a detailed list, with images where necessary, of any items, along with the names of individuals or organizations to which you wanted them given.

Leaving the collection to an heir – Should you be in the enviable situation where your spouse, child or a close relative is a knowledgeable collector able to appreciate you collection, then this might be your chosen option.

Bequest – Especially if the material has a particular significance, you might decide to donate it to a fellow collector, a museum, a society. In some instances, the recipient will issue a tax receipt to you and/or your estate.

Outright gift –Consider passing the collection, or part of it on to a young relative or friend of the family to start them in the hobby or to a stamp club so they can encourage others into the philatelic pursuit.

5. LIST OPTIONS FOR DISPOSAL

There are many ways to dispose of your stamp collection or parts of it. Protect your valuables by insisting that any third party evaluation take place in your presence or in the presence of someone, you trust. Theft is always a concern.

Managing the dispersal of your collection yourself is the most desirable.

Reduce your exposure and consider selling major portions of your collection once you reach the position of having enjoyed the exhibiting and or research of various components.

Some of the pre-eminent circumstances for self liquidation are:

• you know what you have
• you can best identify the valuable items
• you know the best places to sell the various items
• you have control of an orderly disposal
• you are less likely to get taken advantage of than your spouse or executer
• you will have the peace of mind knowing that the disposal has been done according to your wishes

• Selling to a dealer – This maybe the most convenient method of disposing of your collection. You should instruct your administrator to obtain at least two offers. Also caution the estate to ensure that the firms and/or individuals are financially sound. Be advised that not all dealers are reputable and that they should bear in mind the proverb “caveat Emptor.” However if you choose wisely the returns could be much more than what you thought possible.

• Auction - If your collection has considerable value, then the best method of disposal is likely by auction, and you should include a list of firms whom you recommend.

• Society Auction – If your Specialist Societies run regular auctions then parts of your collection may be best sold through them. The members are most apt to know the value of the specialized material and pay good prices.

• Fast – dealer or individual, outright purchase, likely this will yield a lesser price, but perhaps no fees.

• Medium – dealer after a thorough assessment, weeks to months, likely at fair market value with allowance for the dealer’s profit upon resale. Dealers often do not charge an appraisal fee if the material they assessed is eventually sold to them.

• Slow – private treaty, weeks to years, at your set price. Fees to be paid for referrals. Well established auction house, many months to a year or more, at market value. Fees to be paid.

• the location of your inventory list
• the name of the company with which your collection is insured, the amount, the renewal date and the location of the policy
• the names of colleagues, dealers or individuals working for auction houses who can advise the administrator on your material. If possible introduce the administrator to these people.
• where you suggest your collection be sold
• the valuation papers (Be sure to leave precise instruction for your administrator clearly identifying the material to be disposed of and in which fashion. In addition, list names and contact information.)
• the location of any special bequest list
• whom you want the material sold to or through
• how quickly the dispersal should be made

When attempting to grasp the impact of taxation on your estate, consider that all of your assets are subject to taxation within certain boundaries, and that the liability for tax on your philatelic collection happens by virtue of a definition within the Income Tax Act referred to as Listed Personal Property, which specifies that :

"listed personal property" of a taxpayer means the taxpayer's personal-use property that is all or any portion of, or any interest in or right to, any print, etching, drawing, painting, sculpture, or other similar work of art,

(a) jewellery,
(b) rare folio, rare manuscript, or rare book,
(c) stamp, or
(d) coin;