The Three “D”s of Collection Liquidation

Debt, Divorce, Death: Many militaria dealers claim these are the three factors driving our hobby. Heck, most of us can attest to at least two of those, and we are all moving toward the third. As collectors, how we prepare and react to the three Ds, will determine whether the historic relics we love are anchors that drag us and / or our families down, or sails that can propel us / them to new opportunities.

See what I did there? “Sails that can propel us…” It’s all about those sales. When all is said and done, chances are someone is going to want us—or our heirs—to sell our collection. As caretakers of history, it is a duty incumbent upon us to have a plan for when “debt, divorce, or death” come looking for us.

Plans regarding debt and divorce are best left up to you. Having endured both (more than once on each front!), I don’t feel I have developed any skills that I can offer in the form of advice. In regard to death, though, I am surprised how much I have learned through the years about estate liquidation.

Too many of us have a cop-out exit strategy. It goes something like this. “I have told my wife / kids, ‘When I die, my collection is their inheritance.’” You would be surprised how many collectors say this, believing they are doing their a family a favor! For those who still believe, let me tell you how this plan usually plays out. Let’s use the example of five different military vehicle collectors I have known.

Each of the five died during the last ten years. Each of the five left their vehicle collections to their family, believing the sons, daughters, and grandchildren would gratefully become caretakers of the collection.

The timeframe varied slightly from family to family, but here’s how each scenario played out: One year after the collector died, the family made an effort to take vehicles to the same shows that the collector had supported—not as many, but a very solid effort. Year two after the death: The families took a couple of vehicles around… the other vehicles no longer started or the family just didn’t want to put in the maximum effort required to keep the same level of commitment. Year three: The families of the departed decided to begin selling the collections—most not knowing where to start.

The dilemma of “collector-death-without-a-plan” came back to the forefront of my thoughts while I was at the Show of Shows. Glancing at my Blackberry after it buzzed in my pocket, I read a letter that began, “My father-in-law recently passed away. My wife and I have inherited his very large collection of World War II and Vietnam-era military collection…”

Here were two people who had no desire to become collectors, but had a lifetime of gathering heaped on them. Just like fresh road kills attract the vultures, they began getting the phone calls, “I was a friend of your Dad. I will make you a fair offer on the whole collection.”

The couple admitted to me, they wouldn’t recognize a “fair offer” from a complete scam. They were desperate, “We don’t want this stuff. But we don’t want to be taken. What should we do?”

The departed collector thought he was giving the couple a great gift, when in fact, he had—unnecessarily and selfishly—complicated it.

 

PREPARE AN EXIT STRATEGY

Who goes into combat without a plan for getting out of it? Usually, the foolish or stupid. Now we know we collectors are not stupid, and generally not foolish, but you would be surprised how many don’t have an exit strategy for their collection.

Perhaps it is a denial of death or simply that collector gene working overtime that won’t permit us to actually consider parting with hard-won relics, but whatever the reason, those of us who don’t plan are placing an undue burden on the family we leave behind.

Determining when it is “time to sell” is a lot like Collector Russian Roulette. “I am going to sell when I turn 70,” or “I will sell after I complete my collection of every patch ever worn by the 2nd Division,” are a bit vulnerable to outside influence. That bus speeding past you every day as you drive to work might swerve and finish you off before you reached that goal of 70. Or a dangling light falls from the convention center ceiling and lands on top of you as you reach for that illusive bullion-trimmed WWI Machine Gun Company, 6th Marines patch. There are just too many variables to rely on a specific age as the trigger to sell.

Personally, my goal is to keep my collection up to about a week before I die. It’s a plan, but I am coming to grips with my daughter’s opinion that it isn’t a good plan.

So, I have initiated a new plan. Knowing that I can’t plan anything until I have gathered facts, I began with a comprehensive inventory. Sure, “inventory” sounds tedious (especially to anyone who has lived in a retail environment) but this is the collection I have grown to love. Compiling a list of everything has reawakened my awareness to so many cool items in my collection.

Creating an inventory forced me to tag items in groupings. Too often, I have seen great groups of material once belonging to a single soldier broken apart by the heirs. They don’t know that a particular helmet came with a specific uniform or that photos and diaries came with a collection of medals. Tagging the items and noting it in the inventory is a step towards preserving the history.

Once I finished the inventory, I paid someone to appraise the collection. This is an important step. You can’t be your own appraiser. There are just too many factors involved that inhibit the appraisal.

Remember: The appraisal isn’t for you, it is for those who are left with your collection. Don’t leave them thinking your $100,000 collection is worth $2 million. You are providing them with a strong tool with which to enter negotiations. The appraisal isn’t an assessment of how smart of a buyer you were or an evaluation of the significance it has to you. It has to be an accurate assessment of the retail value of your collection.

Finally, don’t assume your family has been paying attention. It is your hobby, not their hobby. Make a list of dealers you trust, complete with email addresses and phone numbers. This will give them a starting point when the time comes to dispose of everything.

 

TILL DEATH DO US PART

Dying with your collection is only one option—and in my experience, perhaps one of the more selfish. It puts the responsibility of disposal of a collection on your heirs. And if they could be honest with you, they would probably say, “We would just rather have the money.” So, if you want to take death by the horns, you can follow a similar path as described above.

It all begins with that all-important inventory. Once that is done, hire an appraiser to get a realistic estimate of value. Now, you are as well-armed as a double-gun-toting lawman. You—or your heirs—have the weapons to go face-to-face with any potential buyer.

After you have your appraisal, determine how you want to sell. Money and time are closely related. The more time you are willing to take to sell, the potential for realizing the most money grows. If the goal is to put money in your hands immediately, that will cut into the amount of money you will receive.

If you have endless amount of time, patience, and ability, you can sell your collection, piece by piece at shows, through list-it-yourself auctions, your own web site, or good old-fashioned price lists. This takes a long time, and invariably, you are left with a lot of stuff that just doesn’t sell until you lot it together in “desk-sweepings” sales bins.

Exchanging your collection for money today is possible, but chances are, you are going to sell to a dealer. Dealers are retailers who buy at wholesale. Take that appraisal you have and cut the final number by about 50-60%. That is the price you can hope to use in the beginning of negotiations. But remember, this isn’t about you, your knowledge, or the quality of collector you are, it is about putting money in the hands of your heirs.

 

WE ARE JUST TEMPORARY CARETAKERS

Captain Newell Weed earned his Distinguished Service Cross for his activities near Foret de Argonne, France, on 26 September 1918. Captain Weed advanced—alone— through heavy machine-gun fire some 300 yards ahead of his tanks and supporting infantry. He was trying to find passage for his company of Renault tanks. While examining the German trenches, he was surprised and captured by German infantrymen. As they conducted him to the rear, Captain Weed heard one of his tanks. In spite of being unarmed, and the threat to his life if he moved, he signaled the tank forward. In the confusion that ensued, he made his escape back to the American lines.

I am fortunate to be able to look over my monitor and stare at Weed’s tunic. But I know, I am just the temporary caretaker of it.

If I am hit by that swerving bus tonight, I want to be sure of two things: 1) My daughter knows how to convert that tunic into dollars, and 2) The story of Captain Weed remains with the uniform—there will be another generation of history enthusiasts who will look upon the tunic and remember the valor Captain Weed displayed back in 1918.

To meet those two goals, I have tagged the uniform. That tag corresponds to a number on the inventory served as the foundation of an appraisal conducted in 2010. My daughter has a copy of the full inventory, the appraisal, and a list of dealers whom I know will value her, my collection, and the legacy of the artifacts with respect each deserves.

In the meantime, I am going to look up at those dangling lights, watch the buses as they pass me, and enjoy my collection for another 25—no, 35 years!

Preserve the Memories,

John Adams-Graf
Editor, Military Trader and Military Vehicles Magazine

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One thought on “The Three “D”s of Collection Liquidation

  1. Paris33 on said:

    A couple of comments on this excellent article:

    1. I would emphasize John’s point about getting an appraisal. On numerous occasions, I have had to deal with widows/children who tell me “He just paid a few dollars for these things”. At the risk of opening up domestic wounds, it is important that the family know that there is value in the collection — often substantial value. If you expect your collection to be an inheritance of significance, leave information about the value of individual items and the total package.

    2. I’d recommend that you make a second list beyond “dealers you trust”. This list will contain names of individuals you do not want to be involved in the disposition of your collection. The obvious names for this list will be the collectors/dealers you don’t trust. The less obvious names can often be collectors you know well, but who will not necessarly have your family’s best interest at heart when disposing of your collection. Your best collecting buddy, who you’ve known for years and who collects very similar items, may really, really want that Type 2 widget you’ve discovered is actually unique and quite valuable. Don’t put him/her in the position of facing a conflict of interest. He may choose your family’s interest over his collecting interests, but there’s no reason to make him face that choice.

    If our collections are to be a source of income for our family after we’re gone, we need to leave information that will help that process. Failure to do that will open your family up to the sweet-talking “friend” with a pick-up truck and a $100 bill.

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