The increased popularity of wine has led to an increase in fine wine prices around the world. In 2013, Christie’s Auction House received a winning bid of $476,280 for a case of Romanée-Conti Grand Cru — Vintage 1978, Côte de Nuits – a world record for a case of 12 bottles of wine. Of course, you don’t have to make a winning bid to Christie’s Auction House to build a valuable wine collection. Many clients have established valuable wine collections in their homes or in storage facilities without ever participating in an auction. A client may want the collection to stay in his or her family for future generations to enjoy. A purpose trust for the wine collection may be just the tool to achieve the client’s goals. A purpose trust is created to carry out a specific objective of the person who creates the trust rather than creating a trust for the benefit of individual beneficiaries. A purpose trust can be an effective planning tool for a wine collection that is meant to be held long-term by providing some of the following benefits:
- Naming an experienced fiduciary to preserve and store the collection appropriately;
- Allocating sufficient funds to maintain the collection;
- Naming a a trust protector to remove and replace fiduciaries, periodically check on the wine, and review trust records such as auction results, consignment agreements and records of sales;
- Containing a provision for termination when the wine has been sold, drunk, or otherwise liquidated (the trust may provide the remaining bottles of wine are to be donated to charity when the inventory reaches a certain level);
- Providing appropriate sales strategies if the wine is to be sold to ensure no blockage discounts when it comes to pricing; and
- Provide a concise location for the collector’s records so the fiduciaries can locate all the bottles of wine, both present and future (if a member of a wine club that ships regularly).
If you or someone you know is an oenophile (a lover or connoisseur of wine) then a wine trust may be just the tool they need to ensure their prized collection is administered and enjoyed as they intended long after they have passed.
