Hidden Treasures: The Unseen Value of Collectible Cards and Your Estate Plan

After a very lengthy consideration process I recently decided to start collecting the First Chapter of Disney’s Lorcana cards.? I even decided to be ambitious and try to complete the full set with PSA 10 grades.? If none of that made any sense to you, you may be in for an interesting read.

Little Hidden Treasures

I’m a huge collectible and trading card game fan (commonly referred to as CCG or TCG).? In the world of collectible cards we’re not just talking about a small hobby or children’s game, we’re looking at a multi-billion dollar industry that’s expanding at exponential rates.? What might seem like mere pieces of cardboard to some, in reality, are valuable assets.? While many scoff at the idea of collectibles, make no mistake about it, this is a growing industry and cards are investments that can appreciate significantly over time.

To the untrained eye or inexperienced collector, collectible cards may be discarded as child’s play but to those who understand the industry; these cards can fetch thousands, if not hundreds of thousands of dollars in the market.? At the extreme end, you have the Mickie Mantle and Honus Wagner baseball cards worth over $10 million, Steph Curry’s national Treasure Rookie for $5.9M, or the legendary Black Lotus from Magic the Gathering selling for over $500k at auction recently, but it’s not uncommon for sports or collectible cards to easily fetch 4 or 5 digit price tags.? The allure of these cards isn’t just their financial value, but also the stories they tell, the time commitment, and the communities or relationships built.

The Impact on Estate Planning

I can’t stress enough the significance of including your card collection in your estate plan.? Card collections not only hold financial value but often carry sentimental value.? Neglecting to account for them in your estate plan can not only lead to challenges, disputes, and missed opportunities, but also financial loss or emotional stress.? It is essential not to overlook these assets to ensure proper management, valuation, and their ultimate sale or distribution.

So then what are some of the considerations when it comes to protecting your cherished collection??

• Documentation:? Like all your other assets, you should create an inventory of what you own or at least note the important cards.? This shouldn’t be difficult since we all love keeping checklists in our collection but it’s not just about knowing what you have; it’s about ensuring your executor can identify, locate, and manage your collection appropriately.?
• Valuation – If you’re really serious and have high-end cards then consider getting the appropriate grading, appraisals, and putting safeguards in place to ensure your collection is protected.? This also guides your executor in understanding the importance of maintaining the cards.
• Clear instructions – Your estate plan should detail your intentions for your collection, whether they should be sold, donated, or distributed to specific individuals.

Buried Loot

The stories of discovered treasures hidden in attics or sold unwittingly at garage sales are not urban legends.? We’ve all heard the stories, read the articles, or seen it on the news; people finding expensive comics or cards hidden away and almost lost forever.? Many collectors have a secret stash of cards hidden away and unfortunately, this poses risks because no one else may know its value or even existence.? I too play this gambit as my wife understands I have a lot of collectibles and cards but she may not fully comprehend the full extent of the pirate treasure hidden on all those shelves.? Having said that, the fact that she knows there’s value in the cards may save them from being put in a bargain bin in a garage sale or discarded as junk when I inevitably pass away.? It is important to choose an executor that understands what they’re dealing with, knows what to do with your collection, and respects your wishes.

For the Non-Collector Executor

What if you don’t share the same passion for collectibles and are called upon to act as executor?? Stepping into this role when you don’t understand what assets you’re dealing with can be daunting.? Some steps to take may include:?

• Collecting the assets – See what I did there? As executor you are tasked with collecting all of the deceased’s assets and with cards it’s very important that you secure the collection ensuring there won’t be a loss from theft or damage.? You should also document the collection to confirm what you have retained.? It’s not just about gathering the items; it’s about understanding their worth and ensuring their protection from damage or loss such as not leaving them in a damp area or direct sunlight.
• Valuation – As part of your role of being executor you have to value the estate assets so getting the collection appraised makes sense.? Knowing the value of the collection is critical, not just for estate valuation but for potential a sale or distribution to beneficiaries.
• Expert Advice – Don't go in this alone! Legal, financial, tax, or even advice from hobbyists will be important.? If the deceased operated a card shop, card business, or was regular in flipping collections, there may be tax implications.? You should also seek input from hobbyists and card specialists so you can understand the cards and assets more.? The card collecting community is a wonderful network and?no one wants to see cards mishandled.
• Educate yourself about the hobby and market – If you’re not already versed in sports or collectible cards then it may be worthwhile for you to learn some basics such as what cards are of value, how card values fluctuate depending on factors such as reprints, other sales, and what’s happening in the collectible or sports market.? This information will help you make informed decisions getting better outcomes during estate administration.

Conclusion

Proper planning and administration involving collector cards require specific attention.? It is important to incorporate those assets into your estate plan to ensure that your executor and estate are well-informed of the existence of the assets, the value involved, and understand what your wishes are.? If you are a collector then this should resonate with you and you should consider incorporating planning for your collection and if you’re an executor ever tasked to administer an estate with cards and you don’t understand it, don’t be quick to dismiss them as simply cards as they can have not only significant financial value but significant sentimental value as well.

A final note...

I'm in the market for a PSA 10 DDS Blue Eyes if anyone knows a seller. Send me a DM!!

This posting is my own and does not necessarily reflect BMO's position or viewpoints. The information herein does not constitute any financial, legal, tax, investment or other advice.