When does luxury become lost? Unlocking the hidden gems in an estate administration…

2nd February 2024

In a post-pandemic world, the luxury market continues to grow at an impressive rate, with luxury being sought out by Gen Z and many shoppers looking to buy jewellery, watches and bags with an investment outlook in mind.

As an example, Chanel typically has price increases twice a year (sometimes more) so the same Chanel small flap bag bought in 2021 for £6,210 is now priced at £8,180 as at January 2024 (a 31% increase). Therefore, even if the bag is not sold for the current market price, there is a likelihood that even on the resale market, a higher price than the original purchase price can be attained. Whilst luxury brands are eye wateringly expensive, it is worth noting that not all luxury brands are made equal and only a few retain their value.

During a recent conversation with my friend about her latest bag purchase, she suddenly had a bout of anxiety and asked:

but what if I die and my husband sells my handbags for the price I told him I paid….or worse yet, throws them all away.

With luxury sales on the increase, my friend is certainly not alone in her fears. How many family or friends share the same passion for luxury and truly know an item’s worth, let alone the true purchase price?

This makes the choice of executors in a Will even more important, as they are responsible for dealing with the estate on death and collecting and realising the assets. Where an individual knows their Birkins from their Balenciagas, they may be a desirable executor choice as they are more likely to recognise the potential unlocked value to your estate. Alternatively, these “lux-savvy” individuals can be consulted by the executor as a first port of call when the personal belongings are being reviewed.

In addition, it is vital to draft a letter of wishes or compile an inventory detailing the luxury items that may retain their value on death as this will help guide your executor, who can then take further advice as required. Of course, this letter can be kept confidential until your death to avoid those awkward conversations with family and friends on your current spending habits!

Whilst death planning may not be at the forefront of your mind when buying that Tiffany blue Fendi baguette, a little organisation and forward planning can ensure those precious items are not overlooked later and don’t end up at the local charity shop by that well-meaning but ill-informed executor.

At Blake Morgan, we understand the intricacies of estate administrations and the importance of planning ahead. If you would like to ensure that your treasures are always treasured, please contact one of our succession and tax solicitors for assistance with your Will and estate planning.

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