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If Your Assets Include A Wine Collection It May Not Be Protected. Learn The Secrets to Liquid Asset Protection For Your Wine Collection Including Insuring, Protecting and Passing on this valuable asset.

PROTECTING YOUR WINE Collection: If you buy wine as an investment, keep the following in mind:

A homeowners' policy is not adequate for wine collection coverage. Most homeowners' policies specifically exclude coverage for perishables and fragile goods, such as wine.

In fact, according to Robb Frees, a licensed Pennsylvania property casualy insurance agent, "Wine collections are excluded under homeowners' policies and must be scheduled on a separate policy."

Robb also advises his high end insurance clients to consider an agreed upon insurance value and to keep records of the collectstion purchases, sales, and consumption to avoid insurance disputes in the event of a loss.

Finally, according to Robb, "Setting the deductible is one of the best ways to manage the cost of insurance, to keep it reasonable, but to have a coverage directly coordinated with your risk aversion and balanced with the cost of coverage."

Wine auctions this year have been strong. One of the first fall 2009 auctions in Hong Kong, held by American-based wine auctioneers, showed strong results. Over 1,100 lots were offered and all sold - totaling nearly $6.4 million in sales.

Wine market experts confirm long term value. Thomas Jenkins, brokering manager at Justerini & Brooks, one of London's oldest wine merchants, believes that growing global demand and a fall in production by some leading chateaux should help maintain prices.

Wine value is transparent. There is a high level of transparency in the market price for investment-grade wine due to the accessibility of retail and auction prices. Web sites such as vinfolio.com and cellartracker.com allow collectors to check the retail value of their wine. In addition, major wine auction houses such as Zachy's, Acker Merrall & Condit and Hart Davis Hart release their results. Access to information makes it easier for collectors to know and track the value of their collections.

New buyers are entering the market. Lower prices have encouraged new buyers to invest in wine

Ideal Storage conditions include: Stable temperatures of 50-60°F. Stable humidity, preferably between 50-80%.

Odor and Vibration-free environment (do not store in a garage or laundry room).

Proper security: locks, key codes

Thanks to Doug MacGray dMacGray@compass-ionadvisors.com for allowing us to republish his newsletter article and the information above.

Here are a few more pointers from my perspective:

Check with a specialty lines or high end property casualy agent to see if your collection can be insured under a rider to your homeowner's policy or under a separate policy for such collections and for limited risks.

When if ever should a collection be owned by an entity such as an LLC rather than as personal property? (Only when the ownership and sale is for investment purposes andthe wine is no longer for personal use. That would be sad.)

Make sure that your collection is properly mentioned in your estate planning documents. For example, should it be the subject of an informal memorandum or should it be specfically mentioned in your will or trust?

Should your wine collection be sold?

If it is to be sold who should the executor consult and to whom would the proceeds go to?

If your wine collection is being divided are the recipients able to afford to properly store and deal with the collection?

Should you advise them of dealers and where to get expert advice and information about sales or retention of the collection?

For now, enjoy your wine. But, if your collection has become a major asset, it should be treated like one and some planning might protect it for you and as a legacy to those who matter.

David M. Frees III, Esquire

For an appointment with an advisor experienced in these matters or to update your estate planning documents to handle your current assets and those you might aquire in the future please email dfrees@utbf.com or call Ms. Brownback, or Ms. Fox at 610-933-8069 and mention this article for an initial consultation at no charge and at no risk to you.

David M. Frees III is Chairman of the Trust, Estates, and Wealth Preservation section of Unruh, Turner Burke and Frees with offices serving all of South Eastern Pennsylvania including Chester County, Montgomery County, Berks and Bucks counties, Philadelphia and Lancaster counties including Malvern, Phoenixville, West Chester, Devon, Berwyn, Chester Springs, Doylestown, Kennet, and many more communities.

David Frees is rated highly by Martidale.com and has attained the highest rating by AVVO.  His rating of 10 (Superb) on a scale of 1-10 and client and lawyer reviews be viewed here.

You can schedule a consultation in person, or by phone with David Frees through his assistants/paralegals Donna, Denise, and Tara at 610-933-8069.

David can also be reached by email at dfrees@utbf.com

Please note, however, that David meets with many clients each week and in order to give them his full attention, he is not always availble to reply immediatly to cell phone or email requests.  However, immediate assistance can always be reached through 610-933-8069.

David Frees is a prolific author on legal topics and in addition to the articles and blogs featured on this site, please feel free to view his postings at http://www.utbf.com/trust-estate

For more info from David M. Frees, III

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