NOT SURE IF YOU NEED A PROFESSIONAL APPRAISER?

READ THIS

& 

DO IT YOURSELF

If you can identify an item of furniture, jewelry, decorative or fine art, you are on your way to determining a value. 

In 1993, the Getty Information Institute initiated a collaborative project to develop an international documentation standard for the information needed to identify cultural objects. The new standard was developed in collaboration with police forces, customs agencies, museums, the art trade, appraisers, and the insurance industry.  The result is the Object ID Checklist.

OBJECT ID CHECKLIST

Questions to Answer

 

Type of Object       What kind of object is it (e.g., painting, sculpture, clock, mask)?

Materials & Techniques       What materials is the object made of (e.g., brass, wood, oil on canvas)? How was it made (e.g., carved, cast, etched)?

Measurements       What is the size and/or weight of the object? Specify which unit of measurement is being used (e.g., cm., in.) and to which dimension the measurement refers (e.g., height, width, depth).

Inscriptions & Markings       Are there any identifying markings, numbers, or inscriptions on the object (e.g., a signature, dedication, title, maker™'s mark, purity marks, property marks)?

Distinguishing Features       Does the object have any physical characteristics that could help to identify it (e.g., damage, repairs, manufacturing defects)?

Title      Does the object have a title by which it is known and might be identified (e.g., The Scream)? 

Subject    What is pictured or represented (e.g., landscape, battle, woman holding child)?

Date or Period     When was the object made (e.g., 1893, early 17th century, Late Bronze Age)?

Maker      Do you know who made the object? This may be the name of a known individual (e.g., Thomas Tompion), a company (e.g., Tiffany), or a cultural group (e.g., Hopi).

Congratulations!

You're on your way to appraising an item yourself! 

The next steps are figuring out where the items sell most frequently and for how much. 

Estate Planning for Collectibles

Many people knowledgeable about the value of their estates: stocks, bonds, real estate  Few pay attention to their personal property.  I think this is often because your collection represents you and your passions and memories; and a price is not easily put upon that.  So, people avoid addressing it, because they haven't necessarily made financial investments in the item as much as they have coveted, loved, studied, and enjoyed those purchases or inheritances. It's often the most challenging of all your estate planning analyses.  Like writing a personal diary.

You or members of your family have such collections. It can be an emancipation, a liberation and a satisfaction to know that, if you address what will, at least, happen to your personal property, you can truly rest in peace.  If you don't, some relationships you have spent a lifetime making (both friendly, familial and your relationship with your "stuff") can spiral down a long and sad vortex, before they address the collection's value and direction (equitable distribution, estate tax, sale, donation) that should have been the job of the collection's owner. 

Identification And Valuation

A good estate personal property appraiser with high ethical standards, familiar with de-accessioning or tax choices, working in conjuction with your financial and legal team, can truly be a godsend.  Attorneys, accountants, lawyers and estate planners all know about financial instruments, business and real estate.  Your art, antiques, collections and jewelry must be part of your estate consideration, and sometimes will be the most contested. 

An ASA or AAA appraiser is good first phone call to make.  Schedule a consultative visit to come up with an action plan.  Determine the necessary scope of the job and discuss previous appraisals, including insurance, timing,  provenance.  Cataloging and photographing your items is best done by the appraiser in USPAP  (Congressional standards) format, with research and valuation assignation following.  

Get it on your calendar.  We find that our clients are so happy with getting this process underway;  knowing that your collection will be MOST APPRECIATED by future owners is a blessing.  Your spouse, your children, your heirs will love and respect you forever.

Sale vs. Bequething vs. Gifting

Art, Antiques, and other collectibles are often ideal assets for charitable giving, particularly if they've appreciated significantly in value.

1. Who would want them? Who would qualify as an acceptable institution?

2. Is there an endowment requited to maintain the collection at a museum?

3. What about fractional gifting, where you share ownership with the institution?

3. Capital gains vs. taxes?

4. Love a charity and want them to benefit?  Perhaps selling a collection and donating the proceeds should be discussed.

5. Beware of the "empty hook syndrome."  American grandchildren are already assuming a huge burden for an exploding aging population.  Your grandchild might get stuck with this unncessary and princely (with "late fees") bill, too.

Whatever strategies and techniques you use to transfer art and other collectibles in a tax-efficient manner is important to estate planning.  Do it right.

Beware! Of Auction House Appraisals

Victor Wiener was my very first-ever appraisal instructor (USPAP) and my inspiration for pursuing an advanced Appraisal Education. This article was on Chubb Insurance's website today.  


Why Auction Estimates Are Not Insurance Appraisals 


by Victor Wiener, LLC and Charles Wong, LL.M

 
Collectors often have difficulty in deciding what type of appraisal to use for insurance purposes. Aggressive marketing by auction houses (in which valuation services are offered, often for free, in the hope that a collector will decide to sell) has led many to believe that auction estimates can be used. However, it may not always be prudent to rely on these, as insurance compensation based on auction estimates may prove insufficient to purchase replacements for lost or damaged works.

There are many reasons for this. Auction houses are in the business of valuing goods for regular sale. They deal in large volumes and have business relationships and obligations to both sellers and buyers, not to mention their own interests. This can affect an estimate. Note, however, that the litigation cases discussed in this article relate to situations auction houses may find themselves in when providing estimates in their usual business; it is conceivable that they may encounter similar challenges when giving estimates for insurance purposes. 

Is there such a thing as a free lunch? Auction houses may not have time to conduct proper research.

Consider the case of Guido Ravenna of Buenos Aires. In 1999 he received an offer from a South American dealer for a family heirloom known as the Pieta, conditional on immediate acceptance. Coincidentally, his wife was in New York and showed photographs of the painting to Christie's Old Masters expert who thought the Pieta was by Nuvolone, a minor 17th century Italian artist, and worth between $10,000 to $15,000.  Ravenna then accepted an offer of approximately $40,000 for the picture and some items of furniture. Six months later, the Pieta was consigned to the same branch of Christie's by the dealer who had purchased the painting from Ravenna. After a thorough physical examination, Christie's determined it to be a "highly important" painting by the Italian Baroque painter Ludovico Caracci and, in 2000, sold it at auction for $5,227,500 to the Metropolitan Museum of Art, where it now hangs as The Lamentation. 













Ludovico Carracci, ca. 1582; A faithful photographic reproduction of an original two-dimensional work of art. The work of art itself is {{PD-US}}: public domain - copyright has expired.
 
Ravenna sued Christie's. The federal district court acknowledged that Christie's was aware Ravenna would be relying on their estimate, but found that Christie's did not owe Ravenna a fiduciary duty as the advice was free and there was no previous or other relationship between Ravenna and Christie's. This is an important consideration when relying on a free appraisal. Always consider the legal implications of free advice; if in doubt, obtain reliable legal counsel. 

Is this what I think it is? Due diligence

 
Sometimes less than three months transpire between consignment to an auction and final sale. In an atmosphere of quick turnaround, omissions sometimes can occur.

The collector William Foxley acquired a Mary Cassatt from Sotheby's in December 1987. Sotheby's had indicated that there would be a letter from an expert 'discussing' the work. That letter arrived nearly six years later, and was based on an examination of color transparencies rather than an actual view of the original. Foxley later sent the painting for auction by Sotheby's; they informed him that the Cassatt Committee had determined that the work might not be authentic. 

Torn between two lovers: Auction houses may have divided loyalties

 
On any item sold, auction houses have two possibly conflicting relationships: with the seller, and with the buyer.

In 1946 the collector, Jane Koven paid $1,400 for a Braque pastel. In 1990 Christie's auctioned it on her behalf to Barbaralee Diamonstein for $600,000. Immediately afterwards, however, Diamonstein questioned the Braque's authenticity. Although Christie's experts were convinced that it was genuine, they felt compelled to refund the purchase price, but Koven declined to return the proceeds. Christie's underwriters paid Diamonstein, and sued Koven. The federal district court found in favor of Christie's, noting that Christie's had a 'dual loyalty': a fiduciary duty of loyalty to Koven, but which was superseded by their statement to Diamonstein that the work would be genuine. 


In another instance, Christie's, in 1991, was asked to value the works held by the Andy Warhol Foundation for the Visual Arts. Christie's appraised the collection at $95 million, but following related litigation, the New York County Surrogate Court held that the assets were worth $509 million. Surrogate Preminger's judgment noted that, at the same time as conducting the valuation, Christie's was also negotiating to sell Warhol works on the Foundation's behalf - conflict of interest that should have been disclosed in their appraisal. 


The court also observed that in appraising the Warhol works, Christie's had had a limited focus which was unacceptable. They had not sought evidence of Warhol's marketability, nor evidence of his importance as an artist. Nor did they consider comparable sales: they did refer to some Christie's sales figures, but not those of other auction houses. The judge held that sales by dealers, private treaties and auctions should all have been considered. 

A change is as good as a holiday: Revisions of estimates

 
Auctions houses are known to revise their estimates. This, not unnaturally, raises questions as to the reliability of the initial estimate.
In the Ravenna case an estimate of $10,000 to $15,000 on an initial view rocketed to a far higher figure when re-examined, admittedly physically rather than from photographs, which disclosed physical clues that led to its final attribution. 


Another case involved a Faberge egg described by Christie's as an Imperial Easter egg. It was bought, sight unseen, in 1977 for $250,000. On viewing it, the buyer thought it was not authentic and tried to withdraw, but paid when Christie's provided a written opinion from an outside expert that the egg was genuine. When the buyer consigned it to Christie's some years later, the same expert declared that it was not an Imperial Easter egg, but something lesser, and of lower value. 

How much is that Dufy in the window? Type of value used

 
Apart from considerations affecting estimates, there may be a more fundamental issue. Under most insurance policies, collections should be valued according to their retail replacement value, that is, what a buyer or collector would have to pay to replace a lost or damaged work in as short as time as possible. This value is calculated from the point of view of the owner who wishes to maintain a collection.


On the other hand, auction estimates are calculated from the perspective of an owner who wishes to sell, namely: the fair market value, or how much the seller would receive at auction. This can dictate where replacements may be obtained. Dealers generally have stocks of specialized items at most times. However they charge a premium to cover their rental and storage costs, and consequently one usually pays more for the convenience of immediate replacement: in fine arts, dealers' prices can frequently be twice as much as prices realized at auction; in decorative arts, they can sometimes be as high as three to four times auction prices.


While auction prices can be lower, buyers must wait - sometimes years - for an appropriate piece to come up at auction, and items are frequently sold in an unrestored state, whereas dealer offerings are almost always restored. In another case, Levin v. Harned, appraisers alleged that the Levins had overpaid for certain antiques. However, the appraisers used as comparables unrestored pieces from the auction marketplace, whereas the Levins' pieces were all highly restored, sold by exclusive dealers. Generally, "retail replacement value" means that a collector would be compensated enough to obtain an appropriate replacement immediately rather than waiting for a similar item to appear at auction.


As a protection against rising market prices, collectors frequently select an insurance policy that compensates for the higher of two values: the retail replacement value, and the current market value, a term which is undefined in most policies. Be aware that when settling a claim, market value will most likely be interpreted as being analogous to fair market value. Accordingly, compensation will be based upon the price the work would have obtained if it were to have been sold as at the date of loss, and not what the insured would have to pay to purchase a similar work on the same date. 

Objectivity of Appraiser: USPAP considerations

 
Though reduced or no fee auction estimates may appear economical, as we have seen, auction estimates may be predicated upon inappropriate values and marketplaces. In contrast, a properly qualified appraiser who is not involved in the commercial aspects of the auction room should provide an appraisal report written in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP), in which factors such as appropriate value, appropriate market place, appropriate comparable sales, title, authenticity and condition are covered and explained thoroughly. 


This may prove more labor intensive and perhaps costlier than obtaining auction estimates. But should there be a loss, one should receive adequate compensation, and be able to move on.

What do you want to know?

I never would have guessed the top 10 searches of items people want to know about on this website, would you? WorthPoint

The TOP 10 inquiries at our firm:

1. Stuff

2. Antiques

3. Silver

4. Furniture

5. Art/Paintings/Prints

6. Jewelry

7. Statues/Figures

8. China/Crystal

9. Books

10. Asian works

What's your inquiry? Visit us and send us an email.

America's Top Doggies Market

Dog Lovers and Dog Art at Harding Gallery Sure do love our puppies here. Visit Polly and Sasha, mother and daughter Bijons (Polly ex-Westminster show!). Reagan Fausel will be visiting us soon, too! Lauren Magnusson and Billy have adopted Atlas.

And, we even have a few for sale.......

The Prince and The Pauper

Print signed L/L Carl Arnold

Brittany Spaniel Photograph, RW Tauskay (1888-1979 Upper Saddle River) Tauskay was the official photographer for the American Kennel Club

Dog on Point Oil on Board, Albert Willms (French, L.19th C.)

Guilty Conscience Oil on Canvas, Herbert William Weekes (British, L. 19th C.)

The Angry Historian: Don't Get Scammed: Use Common Sense

The Angry Historian: Don't Get Scammed: Use Common Sense: "I’ve written about fakes before, since I consider finding one both exciting and annoying. They are exciting because some detective work i..."

Who you gonna call? Pay Attention or the Tax Authorities will getcha

Just because an appraiser says they know about art or antiques or home contents, doesn't mean you should hire them. Some "appraisers" pay for an association with a appraisal society. That doesn't mean they've ascended to MEMBERS. It's important that your due diligence includes hiring the right appraiser: one who is ACCREDITED by the American Society of Appraisers or CERTIFIED by the Appraisers Association of America.

"In recent years, there have been many important changes in substance and in procedure in how appraisals of works of art are treated for tax purposes," Gilbert Edelson, administrative vice president of the Art Dealers Association of America, told audience members at the October 14 and 15 Visual Arts and the Law conference in Chicago.

Among those changes are the specific qualifications for those submitting an appraisal for tax purposes, and there are also increased penalties for appraisals identified by the Internal Revenue Service's Art Advisory Panel as being errant by more than 20%.

APPRAISALS for TAX PURPOSES

In general, the donated object must be a capital asset - "that is, held for at least one year before being given away" - and donated to a nonprofit institution to be used for its exempt purposes. A fund-raising auction "is not one of the exempt purposes of a not-for-profit organization," he noted. If the institution decides to sell the donated item, it may not do so for at least three years. Charitable contributions may not exceed one-third of a taxpayer's adjusted gross income. Since 1985, donors to charitable institutions have been required to include a valid appraisal on their tax returns if, when the gift is an object, it is valued at $5000 or more, or over $10,000 when it is a closely held stock.

Special attention has been given by Congress to appraisers, and Edelson cited both the 2004 American Jobs Creation Act and the 2006 Pension Protection Act as having introduced "new standards for the appraisal of donated work." The Internal Revenue Service has written up guidelines and is awaiting final approval from the Department of the Treasury.

Under the proposed rules, the appraiser must be designated as competent by a recognized professional appraisers' organization or must have passed professional or college-level courses in valuing relevant objects. In addition, the appraiser must be paid to perform appraisals on a regular basis. Neither the donor, the person from whom the donor obtained the item, nor someone employed by the institution receiving the donation may perform the appraisal. The appraiser's fee may not be based on the estimated value of the object.

Valuations found to be grossly incorrect by the 25-member Art Advisory Panel may trigger a range of penalties for the appraiser, either 10% of the tax underpayment due to misstatement, $1000, or 125% of the income received for the appraisal. In addition, the appraiser may be subject to a civil penalty for aiding and abetting an understatement of tax liability and may be prohibited from submitting appraisals for tax purposes for a period of five years. Taxpayers are assessed 30% of the tax underpayment if the appraised value of the object is found by the IRS to be off by 150% or more. This is in addition to the payment of the adjusted tax and interest on that amount.

The contents of a qualified appraisal must include the identity of the artist, if known, and if unknown, to whom the work is attributed (school of or studio of, for instance), the title, media, dimensions, date, if and where signed, provenance, and publication and exhibition record. If the donated artwork is a multiple, the appraisal needs to include the edition number and size of the edition (if a sculpture, the name of the foundry). In addition, the appraisal needs to cite the cost of the work, when and how it was acquired, its condition, and when it was donated, and must supply a good photograph or transparency of the object.

---Maine Antique Digest, December 2010 by Daniel Grant (edited)