IS THERE A WINE COLLECTION? That is often a question worth asking.
More than ever high net worth individuals own wine collections, with a recent survey by Barclays finding that roughly 25% of such people own significant wine collections. For example, our practice recently appraised a cellar in a disputed divorce with an appraised value of over $3 million. This was an extensive cellar of over 1,200 cases, but with prices of aged wines often topping $200 per bottle it does not take much for a cellar to become an important asset.
In the context of insurance, divorce, estate and other situations, therefore, the existence and significance of a wine collection should be examined, much as one would for art, jewelry and other collectibles. Whether in the context of risk management or pursuant to an unfortunate event, all potentially valuable assets need to be accounted for, wine among them.
Establishing the existence of a wine collection, however, does not end the analysis. There are several different standards by which wine can be appraised, and the disparity in valuation can be significant. For example, some people would argue that a collection’s value is its full retail price, also known as Retail Replacement Value. This is the highest amount required to replace the wine with its precise equivalent and includes, as is relevant, all taxes, premiums, commissions, etc. Others, however, might assert that the Marketable Cash Value should prevail. This is the probable proceeds of a sale - perhaps forced sale - less the expenses incurred in selling the wine and could be as little as 15-20% of the Retail Replacement Value.
Accurately valuing a wine collection requires full knowledge of and familiarity with the wines in the collection and the various standards for appraising them. Feel free to email me at nkaplan@corkcounsel.com for more information.