Oct 14

Wine Collectors Face Unique Estate Planning Challenges


Laura Collier, known as “The Spirited Lawyer,” runs a boutique law practice in Raleigh, NC, focused on the food and beverage industry, including wine and beer retail and distribution.   She is part of the legal movement toward highly specialized client-centered solo practice.  In her case, it is an appetizing practice area as well! 

Image: mickstephenson.photoshelter.com

I should disclose that I have a personal tie to Laura:  As a first-year law school classmate, I often relied on her excellent memory if I missed something in Constitutional Law class.  And today, she is again helping me!  I asked “The Spirited Lawyer” if there are any unusual estate planning concerns specific to fine wine collectors, and she helped me with the content for this article:

Laura explains that wine stores frequently encounter an estate planning-related situation:  The family of a recently-deceased wine collector will ask if the store is interested in buying the deceased’s wine collection.  Intuitively, this would make sense.  When a family member dies, the executor, trustee, or administrator of the estate often conducts a sale of property, the proceeds of which are to be divided according to the deceased’s wishes (or according to state intestacy laws).  The sale often includes tangible investment property, which might include rare baseball cards, antique cars, or any other collectible items.  The estate sale can be a relatively straightforward process, particularly if the deceased was foresighted enough to enact a well-drafted estate plan

However, the rules for selling a deceased’s wine collection are far more complex than the rules for selling baseball cards or antique cars.  The legal difficulty is rooted in the unpopular three-tier system for distribution of alcohol in the United States, a relic of the post-prohibition era.  In most states, retailers can only buy alcohol from distributors, and distributors can only buy from manufacturers or importers.  Although these laws were conceived in the wake of the era of Al Capone, they continue to shape modern liquor industry trends well into the 21st Century.  In my state of Illinois (also Al Capone’s state!), the three-tier system remains solidly entrenched.  And the personal representative of an estate does not easily fit into this legal framework.

Fortunately, in Laura’s state of North Carolina, the legislature passed a law allowing for a special one-time permit to sell alcohol received through inheritance or similar circumstances.  The law does require the alcohol be sold by the estate to an end user (which would still prevent the sale of a wine collection directly to a wine store).  However, auction houses can help facilitate sales by an estate to other wine collectors.  Other states have different ways of dealing with this unique situation.  Before attempting to pursue an alcohol auction or any other means of disposing of your estate’s alcohol, contact a local attorney that specializes in this unique area.

One final consideration for anyone considering leaving behind a valuable wine collection:  Protect your assets from physical deterioration due to temperature, light exposure, breakage, flooding, etc.  Also review your insurance policy coverage and limits. It would be a shame to lose a portion of your family’s valuable assets to a physical threat.

Thanks again to Laura Collier, The Spirited Lawyer, for her help with this post!

Published by Ian Holzhauer, Esq. of Nagle Obarski PC in Naperville, IL.   
Note:  The information above is not legal advice and is not the basis of an attorney-client relationship.  If you need assistance, you can hire an attorney to assist you with your individual legal needs. 

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