Published in the Union Leader (9/11/2017)
Q: My brother died owning an extensive wine cellar. The terms of his last will and testament give this wine collection to my two adult nephews equally. As the executor, how should I handle these assets?
A: As executor of your brother’s estate, you must take possession of all estate assets, arrange for the payment of any estate debts and taxes, and distribute any remaining property to the beneficiaries. Wine is a unique, perishable asset, so you should consider the following:
Inventorying the collection. Your first step will be to inventory the collection. It is best to consult with a wine expert who can assist you with this process. For instance, any inventory should detail the producer of each wine, as well as the varietal and vintage. Most city auction houses can provide suitable referrals. As executor, you may employ experts to assist in the administration of the estate.
If your brother was receiving periodic shipments of wine from various wine clubs and wineries, these shipments should be inventoried and properly stored, and the clubs or wineries should be informed of your brother’s death.
Preserving the collection. Exceptional wines can be rendered worthless when improperly stored and handled — light, fluctuating temperatures and humidity, and breakage pose the greatest threats to wine. A wine expert, preferably the person employed to inventory the collection, should be able to assist you in ensuring adequate storage. Minimally, the basement should be kept dark and cool (around 55 degrees Fahrenheit).
As executor, you may also consider insuring the collection if it is deemed to be of significant value (or continue to pay the premiums on any existing policy). Homeowner’s insurance often excludes wine collections from coverage.
Valuing the collection. A wine collection can be of significant monetary value, so you should obtain a professional appraisal. This appraisal can be used for estate tax purposes (both federal and state) as well as for determining an equitable distribution of the collection to your nephews.
Distributing the collection: If your nephews wish to keep the collection and divide it between themselves, then you may arrange for the transport and delivery of the collection. Whether the costs of packaging, insuring and delivering the collection should be borne by the estate or your nephews depends on the terms of the will, or, if this is silent, state law.
Alternatively, your nephews may wish to sell the collection, in which case you should first assign the collection to them in writing, and then an expert should be retained to administer an auction sale to ensure the collection fetches optimum value by targeting appropriate buyers.
Brad can be reached at email@example.com.
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