A recent £14.5 million trust dispute in the UK's High Court highlights what estate attorneys already know: even with careful planning, family battles over inheritance can erupt when definitions lack clarity. In Marcus v. Marcus, two brothers found themselves in costly litigation over whether the term "children" in their father's trust included a non-biological son—a dispute that might have been avoided with more precise language. But ambiguous definitions aren't the only landmine waiting in estate settlement. For attorneys whose clients own collectibles, two intertwined challenges pose serious professional liability risks: valuation complexity under IRS scrutiny and the family disputes that inevitably follow.
Valuation Challenges That Invite Audits
Collectibles present unique valuation pitfalls that keep both attorneys and executors awake at night. Over half of collectible owners have never had their collections appraised, and approximately 40% don't know their collection's current value! This creates immediate exposure when estates exceed filing thresholds—currently $13.99 million for 2025. The IRS actively targets estates with hard-to-value assets like art, antiques, and collectibles, even when qualified appraisers provide valuations. For estates over $10 million, the audit rate approaches 22%, and estates with significant illiquid assets face even higher scrutiny.
The subjective nature of collectibles—from provenance and condition to market demand and rarity—makes establishing defensible values particularly challenging. The IRS examines whether appraisals meet the Uniform Standards of Professional Appraisal Practice and whether appraisers properly documented their methodology. Missing critical documentation like original purchase receipts, authentication certificates, or exhibition history can trigger valuation disputes that delay probate for months or years. Without proper proof of ownership and provenance, what is referred to as "empty hook syndrome," heirs may be forced to liquidate at below-market prices.
Family Disputes Over Collectibles Can Turn Ugly
Even when valuations survive IRS scrutiny, collectibles frequently become flashpoints for beneficiary conflicts. As one recent study found, applications to challenge wills reached an all-time high in 2024, with over 3,000 caveats filed in the final quarter alone—a 56% increase over five years. When collectors fail to catalog assets, designate specific beneficiaries, or express clear wishes in estate documents, courts must interpret vague instructions, triggering costly litigation.
The emotional attachment to collectibles amplifies these disputes. Unlike stocks or bank accounts, heirlooms carry sentimental value that far exceeds market worth, making rational negotiation a steep climb. Brothers turn against sisters, children challenge stepmothers, and families that once gathered for holidays find themselves battling in probate court. These conflicts expose executors and attorneys to personal liability claims, especially when documentation gaps or valuation errors emerge during discovery.
The Professional Imperative
For estate attorneys, the message is clear: collectibles demand specialized attention that general estate planning often overlooks. Without proactive documentation, qualified appraisals, and explicit beneficiary designations, even the most carefully drafted wills and trusts become litigation targets. In a landscape where family disputes are surging and IRS audit rates for large estates approach one in five, attorneys who help clients address these vulnerabilities early don't just protect inheritances—they protect their own professional reputations.
Contact us to find out how we can help your clients with their collectible assets!