When you breathe your last, which would your heirs (likely) need? A million dollars in cash or a million dollars in illiquid art? The family of Merton D. Simpson can clarify any uncertainty you may have, especially when it comes to having enough cash to bury you.
In short, “illiquid assets” can present a great challenge to proper planning for you, your family, and your estate. Cash truly is king when it comes to estate administration needs in Overland Park and elsewhere.
While there are countless examples, a very recent and public one is the case of the aforementioned Merton D. Simpson. As reported by The New York Times in an article titled “Art Worth Millions, Yet No Cash for Burial,” careful planning is required to meet “liquid” cash needs virtually every estate encounters. Whether paying last health care expenses or other debts, you at least want to have enough cash for your funeral.
Mr. Simpson’s entire estate was worth millions in a vast collection of African and modern art, not to mention art in his own name as an artist of no little esteem. Tragically, in the end there was no money for the funeral. In addition, what happens if and when the taxes come due? That’s when expensive collections of illiquid assets are sold a auction, oftentimes for pennies on the dollar. I've seen that happen.
Now there’s more to the story of Mr. Simpson and many more lessons to be gleaned regarding proper financial an estate planning, as well as a bit of family intrigue for good measure. The takeaway: if one dies with an estate of priceless, illiquid assets, then one’s estate may find itself metaphorically deep in the desert with a purse full of gold, but not a drop of cool water to drink.
Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.
Reference: The New York Times (March 26, 2013) “Art Worth Millions, Yet No Cash for Burial”