‘Wine’ not come home from a hard day of work, pour yourself a glass of wine, and enjoy your evening? Now wouldn’t that be even more satisfying if the bottle of wine came from your own private collection? It seems like the answer to that question is yes, as the popularity of wine and spirit collections have been on the rise in recent years. However, what happens to these collections when the owner passes away?

While they may be a physical liquid, wine and spirits can become an illiquid asset upon the death of the testator. In their will, the testator could leave an alcohol collection to a specific beneficiary, however, the issue arises in situations where the will is silent on the distribution of the collection. In that case, the executor needs to realize the value of said collection for the benefit of the beneficiaries. Given Ontario’s fairly strict laws surrounding the sale of alcohol, this can prove to be an endeavour.

There are two main ways for an executor to deal with an alcohol collection left in an estate. The first is to donate it to a charitable auction. An executor would inform the charity of the inventory they had available, and an appraiser approved by the Canada Revenue Agency would then assess the value of the collection. Should the executor decide to donate the collection, the estate would receive a tax receipt for the appraised value. The value of the tax receipt would not change based on the amount the product eventually sold for at the auction. Dealing with a collection this way can be a great way for the estate to provide a gift to the deceased’s favourite charity.

The second way for an executor to deal with an alcohol collection is to sell it. The Liquor Control Board of Ontario (“LCBO”) uses an auction, appraisal and collection management company named Waddington’s to run their auctions of fine wine and spirits. Should the executor choose to go this route, Waddington’s will meet with the executor to discuss the price the bottles should be listed for and then will handle the marketing of the items prior to the auction. Once sold, Waddington’s will take a commission based on the price the bottles are ultimately sold for. Similar to Waddington’s, there are private companies that will conduct auctions for fine wine and spirits who would also catalogue, market and store the product and take a commission once the alcohol is eventually sold. These are good options for an executor that wants to increase the distributions to the beneficiaries.

If you are the executor of an estate with a wine or spirit collection, these are viable options for you to look into.

Thank you for reading!

Darien Murray