Family Fortunes: Cashing Out on Antiques and Heirlooms

“That has been in our family for generations.”  There is almost no more impressive statement regarding objects in our homes except maybe, “David Bowie gave that to me.”

Heirlooms are anything that has been of value to a relative, that we hope to inherit, and sometimes that we argue over when a loved one has died.  We cling to some items, hoping they will be worth a fortune someday and turn our lives around.  Others, we can practically feel the ghost of Great-Great Grandma breathing down our neck, forbidding us to get rid of the wedding gift from her best friends in Ireland.

Letting go of heirlooms can feel like a gamble - financially and emotionally.  But there are ways to help avoid missing out on your relative’s real gift of bringing joy into your life, and let go of what you no longer need.

1. Decide how much pleasure you receive from owning the heirloom.   No matter how much an object is worth, it is always possible that the joy you experience in seeing and using the item might outweigh any monetary trade.  I have art that is relatively worthless, but which I would not trade for less than the value of a small country estate.  The same may be true of your aunt’s, grandmother’s, or great-grandfather’s former possession.  Don’t let someone talk you into selling something you would regret letting go.
2. Consider the value, not just the price, of your heirlooms.  While it may seem like the “right” thing to do to set aside an ancient antique or trinket for your children or grandchildren, consider if the value of the object would be offset by the benefits the extra income could provide.  If you were to provide the heirloom, they would have a piece of family history.  If you were to sell the heirloom, the profit could be invested into your family’s future.
3. Have it valued by an expert.  Even if you don’t plan to relinquish an item, you should take the time to have antiques and heirlooms valued.  Even small items, like Chinese horn cups, could be worth a significant amount.  Don’t get your hopes up, but even if you plan to keep an item, it is worth knowing the actual value so you can have it properly insured.
4. Make sure it is insured.  Whether or not you’re selling an item, it is a good idea to have it insured.  If you were in the process of transporting your valuable piece to a buyer and it was damaged, you could lose the whole value of the piece.  Similarly, if it were damaged or stolen from your home, you would want to make sure it could be restored or replaced.
5. 

   Check with your family before selling it.  While you may not find the need for an antique armoire in your own home, you may have a relative who has always admired the piece.  Don’t be afraid to let them know you had the item valued and would be willing to sell it to them at a fair price, or ask to trade for an item you have your eye on.  Also, don’t be afraid to give a valuable piece to a relative as a gift.  Doing so could help you avoid steep taxation on “investment profits.”
6. Set aside tax money.  If you do sell an item, particularly for a high profit, be aware that you need to budget for paying tax on the difference between the original purchase price, such as what your great-great grandmother’s parents paid, and the sales price.  Check with your tax agent or research tax law on how much you will have to pay in taxes, and set at least that much aside for tax season.