Despite Mr. Simpson’s collection of museum-quality art, some of it housed in the Manhattan gallery he owned, which is now under lock and key, his family said it lacked the money for a burial.
A million dollars worth of art is quite a collection! But this illiquid asset isn’t exactly helping one’s heirs upon death. When it comes to burial costs, cash is still king. The family of Merton D. Simpson knows this all too well, as they encountered this challenge upon Mr. Simpson’s death.
In short, “illiquid assets” can present a great challenge to proper planning for you, your family, and your estate.
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 at auction, oftentimes for pennies on the dollar.
Now there’s more to the story of Mr. Simpson and many more lessons to be gleaned regarding proper financial and estate planning, as well as a bit of family intrigue. The takeaway: if one dies with an estate of priceless, illiquid assets – then one’s estate may find itself deep in the desert with a purse full of gold, but not a drop of cool water to drink.
Reference: The New York Times (March 26, 2013) “Art Worth Millions, Yet No Cash for Burial”
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