Clutter or Valuable? Collectible Stuff - Risk Management Issues

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Collectible clutter or worthless art? Great stories, valuable tips, solid advice to save you $10,000's

Text of Clutter or Valuable? Collectible Stuff - Risk Management Issues


By Scott M. Haskins, Art Conservator, Preservation Expert, Author of Save Your StuffDoes clutter bother you? What is junk and is it worth anything? How do you know of its it authentic or worth anything? Of course, the clutter bug has a million stories packed away in the memory about people throwing away treasures and, in fact, in my line of work I hear about AND SEE these stories all the time.

Here's a true story that will make you gasp: I was on the phone recently with Scot Levitt, the head of the painting department for Bonham and Butterfields Auction House and he told me a story that he said I could tell you. The story came up because we were talking about the successful sale the evening before and how a painting had sold for twice its $175K estimate. I mentioned to him that is must feel great for him when he helps people to sell their items so successfully and that he must be awash in bottles of wine etc given in gratitude. He mentioned that this never happens and he almost never hears again from the sellers even if the sale is great for them. Well, I said, I can see that because most people dont live their lives with an attitude of gratitude.

Then he said that he agreed but had an exception to that comment: Several months ago a picker (a name in the art trade for people who scour the garage sales etc for paintings of value, then resell them to the auction house or to dealers for a quick profit) found a painting in a Pacific Palisades garage sale (a rich residential community by Santa Monica, CA). The lady watching over her sale was selling a poorly framed item she thought was a poster. He mentioned to her he thought it was a real painting. She blew him off and treated him with indifference so he bought it for the $15 she was asking.

He drove the painting immediately to see Scot Levitt (about 30 minutes) where it was confirmed that it was a painting. It sold a few months later for $375,000.00!!! He was so thankful that he bought Scot an entire case of a fine wine, a highly unusual gesture. But what he did next made me gasp he drove back to the ladys house where the garage sale had been and he surprised her with a check for $100,000!!! Follow me on the Facebook page where I shared this story; CLICK ON THIS LINKAs you might imagine, just anybodys opinion about what you have and what it is worth will NOT be sufficient, appropriate nor probably accurate information. This is the appeal behind the Antiques Roadshow.Here is a personal story a client of mine told me about being involved with the Antiques Roadshow. Participating in the whole process and affair is quite interesting. It is pretty well organized, in spite of all the people. It takes about 2 hours, start to finish, of standing in lines. It might be disappointing to you in that they may not have an appraiser who is specialized in your item after youve gone to all the trouble to show up. I took a painting in to be evaluated and the appraiser actually thought the portrait of the Russian Tsar was of English Prince Edward. Amazing. The appraiser did not really get the idea that the value of the painting lies in the history of this person, a painting actually of the moment of the Russian Revolution. She kept reiterating that the condition of the painting was not good (it had been bayoneted, shot, ripped from its frame, rolled up and smuggled to safety). So, actually the whole experience was pretty disappointing for me, also because the Antiques Roadshow is severely prejudiced and really emphasizes American pieces.The value of an antique or work of art, of a collectible or item of memorabilia can have an impact on people for lots of reasons, as you might guess: family history items document a familys heritage and legacy and therefore contain strong emotional value that probably cannot be insured; Memorabilia items document our lives, loves and experiences like our favorite team or movies or movie stars or cars. The memorabilia sales industry is all about investing in those memories. And, of course, investing in vintage art and antiques has been a popular asset class for millennia. Many items, both collectible and memorabilia, may have important historical value and may be of interest to other people in a locale, region or nation. Collectibles can be an investment or something that holds our memory.

So, given that an item may have tremendous emotional power, significant historical importance or a solid financial value what is something worth? Consider these questions about the items for which you are the curator.1. Can your treasured item be scheduled on an insurance claim in case of damage or loss? Is it insurable? (a painting, yes vintage family photos, no?)2. If the building were going up in smoke, would you be heartbroken about loosing which of your items?3. If your item is damaged, will it be worth restoring? Would you restore it even if the financial value was less than the appraised value because it has emotional or historical value?4. Is your item valuable to others you know (are you a caretaker)?5. Are you aware that the financial valuation (appraisal) will be different in the case of insurance coverage, probate, donation, auction sale or gallery sale?6. Will you get a different evaluation from a garage sale appraiser than from a professional specialist who knows or can research the history, provenance and specialized regional sales for the item? The professionalism and expertise of the appraiser can make a HUGE difference in your expectations from sales, from settling IRS issues, settling estate issues and settling insurance claims.

So, if I ask you what are you doing to protect your investment in collectibles and treasured family history items, would you have a blank look on your face? The above questions bring up a number of risk management questions that should be extremely important to you!

Lets talk specifically about paintings

For many centuries, maybe millennia, paintings have served as the best representation that demonstrates the quality, prestige, style, and class of their owners and patrons. Why else do you think notable hotelier, Steve Wynn, shares his magnificent collections with his guests? It doesnt take many of these valuable paintings to be worth even more than a resort or casino! By proxy, these works of art allow the owner to share in the famous reputation of the artist and connect with the works cultural ties. Keeping track of all this history, value, importance, and prestige is called the provenance. If you collect valuable art, you know you must keep the documentation that establishes this history and background of the artwork safe (see hurricane story below). Even if your artwork isnt an important work by Picasso, you still are interested in whose hands your artwork has passed throughout the ages. Its easy to see why so many people value these works of art and have an emotional and deeply rooted historical connection to them.

That reminds me of another similar sad story: A woman called me one day quite upset, but wouldnt talk about the damage to her family portraits until I went to her office in the San Francisco Bay Area. She had broken up with her boyfriend, and in a fit of rage he had taken a knife and viciously attacked her three family portraits in her office, shredding them to pieces (could this happen from a disgruntled employee?!). By the way, we made them look perfect againbut what a disaster!

In other words, for many, having paintings is not just a way to decorate the office. Whatever type of artwork you have in your office, its important to assess your needs and understanding the disaster preparation tasks for these types of items: It should be a major part of your emergency preparedness plan if you have paintings.

Where do you keep the records of your collection?A Florida client of one of my associates is a major corporate collector. They had an insurance policy, but when a hurricane ripped off the roof and planted a 150-foot yacht on the front lawn, many of his paintings were blown away, never to be seen again. Those that remained were soaked with sea water and in truly bad shape.

When he made his claim for his fine art losses, he was asked to prove the quality of the art and provide documentation to prove the condition of each work of art being claimed previous to the hurricane. These are two important points that can make a huge difference in the value. Unfortunately, his supporting documentation was also destroyed in the storm. A battle ensued with the insurance company that was never resolved satisfactorily for the corporation. This entanglement could have been avoided even though the damage by the hurricane could not have, perhaps.

Paintings, more than any other art form, convey to your clients, public, and competitors an image of status and quality of your business or company. Your art collection tells others you are educated and knowledgeable, and if you collect the right kind of art it will represent that you are at the top of the food chain in affluence and savoir faire. Its been this way for thousands of years.

No matter the value of the artwork, be it Old Master or contemporary, an oil or on paper behind glass, you can see how these items make up the image and contribute forcefully to the company culture. Dont take lightly the importance of protecting, preserving and the risk management of these collectibles and memorabilia.

Take an InventoryThere are lots of reasons to have art besides just owning a financial asset. Here is an assessment checklist to help jog your memory about what you have. Check off what you think you have, and keep in mind there may be some overlap.* Oil paintings* Acrylic paintings, Ancestors portraits, Inherited heirlooms, Family portraits* Founders portraits* Portraits of company officials, high m