WINE APPRAISAL – Protecting your assets!
Many of us who are enophiles have amassed quite a valuable collection of fine and rare wines. We appreciate the artistry of wine, drink it regularly, and often boast to our friends when we acquire a wonderful treasure. This being said, we happily proceed with our passion and pursuit of collecting, never giving a second thought to protecting our wine as we do our other valued assets.
If you have a substantial collection of fine and rare wines, you should seriously entertain the thought of having your wine professionally appraised. Imagine the worst case scenarios such as fire, flood, mechanical equipment failure (i.e. cooling unit in your wine cellar dying), and theft! These disasters could wipe out your entire wine collection instantly. Does your homeowner’s insurance policy protect your wine collection currently? In most cases, your homeowner’s insurance policy would require you to obtain an additional rider to your existing policy to protect your wines. Your insurance company requires that a dollar value be placed upon your entire wine collection, and this is performed by an expert on valuation (i.e. certified appraiser).
Have you ever considered other issues affecting your wine collection such as personal investment, estate planning, charity donations, and tax issues? These legal concerns also require the need for a certified appraisal. According to the IRS Tax Code, any donation you make in excess of $5000 requires the attachment of a certified appraisal to your tax return.
What are the qualifications of a certified appraiser? A certified appraiser is someone who possesses training and certification in the Uniform Standards of Professional Appraisal Practice (USPAP), which is a federal guideline established by the US Congress in 1986. All USPAP certified appraisers are registered with the Appraisal Foundation in Washington DC, and are overseen by the appointed congressional sub-committee. Are appraisers licensed? Only real estate appraisers are required to be licensed in most states. Personal property appraisers (i.e. wine) are not required to have a license, but are certified in USPAP just as real estate appraisers are. Unfortunately, your local wine shop retailers and distributors, although knowledgeable about the wines they handle and sell, are not qualified as appraisers, unless they are certified in USPAP.
How can you spot a fraud? There are many appraisal organizations today awarding designations to appraisers, but do not be deceived by these designations! Only those appraisal organizations offering appraisal certification in USPAP are legitimate. Ask to see the appraiser’s proof of USPAP certification or his proof of registration with the Appraisal Foundation in Washington DC. Footnote: It is a violation of USPAP for any certified appraiser to charge a percentage of the appraised value as a fee. Legitimate appraisers charge a flat fee or hourly rate.
Over the years, I have appeared as an expert witness in many court cases in which issues of valuation were disputed by individuals, insurance companies, etc. More often than not the presiding judge would dismiss the other party’s alleged expert witness, usually a wannabe appraiser, as being unqualified and unfit. I have not lost a case yet, or a case of wine for that matter. Protect your wine assets and have them professionally appraised.
Tom DiNardo is a licensed auctioneer, certified appraiser, writer, and avid wine collector. You may reach Tom through his web site www.DiNardoandLordAuctioneers.com . © 2005 Tom DiNardo – All Rights Reserved.
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