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.
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Reference: The New York
Times (March 26, 2013) “Art Worth Millions, Yet No Cash for Burial”