The daughter of a recently deceased client is on the phone. She's been getting her father's estate organized but isn't sure what to do with his coin collection. She has no idea about the coins' value, whom she can trust for a fair valuation or how to sell the coins. Can you help her?
It's a plausible scenario. In 2007 the U.S. Mint estimated that 140 million Americans collected coins in some capacity. The attraction doesn't seem to have faded in the intervening years: visit the U.S. Mint's site (usmint.gov) and you'll see that the Mint constantly rolls out new collectible coins.
Advising clients on selling coins that they didn't collect personally poses several challenges.
Coins that appear to be identical to the casual observer — silver dollars issued in the same year, for example — aren't fungible. An expert inspection of the coins can reveal differences in rarity and grade-quality that affect price significantly. There are resources for pricing coins, but a non-collector isn't likely to know about them.
Another potential problem is the disparity of knowledge between buyer and seller and the resulting conflict of interest. Coin dealers and traders profit from the buy-sell spread. Uninformed sellers who rely on prospective buyers for objective price evaluations risk receiving less than fair value for their coins.
Accumulation or Collection?
The first issue to clarify with the collector's heirs is whether they're dealing with an accumulation or a collection.
"Every family has some family member with a small handful of some old, odd or curious coins," says Jeffrey Daniher, CFP, with Ritter Daniher Financial Advisory LLC in Cincinnati, Ohio. Daniher has been a collector for the last 37 years and has advised many clients on the best way to convert a coin collection to cash. "The issue that I find is most of the time you don't run into someone who actually collected," he says. "You run into someone where there is this accumulation."
It's an important distinction for several reasons. It's unusual to find valuable coins in an accumulation because accumulators keep coins that interest them, but those coins often lack numismatic value.
These coins are often stored casually—the classic change jar comes to mind—and consequently get scratched. Collectors follow a grading scale and a good condition rating for a circulated coin is the lowest grade many collectors will consider. Low-quality coins may still have value but it will be for their metal content, not their collectible potential.
Recognizing the accumulation versus collection distinction will influence the optimal way to sell the coins, Daniher says.
For accumulations, "… the key is to make sure that with a minimum amount of hassle and effort, the family gets a fair value for their items."
