Friday, June 01, 2007

Some great info from a wine auctioneer

Many of us who are enophiles have amassed quite a valuable collection of fine and rare wines. We appreciate the artistry of wine, drink it regularly, and often boast to our friends when we acquire a wonderful treasure. This being said, we happily proceed with our passion and pursuit of collecting, never giving a second thought to protecting our wine as we do our other valued assets.

If you have a substantial collection of fine and rare wines, you should seriously entertain the thought of having your wine professionally appraised. Imagine the worst case scenarios such as fire, flood, mechanical equipment failure (i.e. cooling unit in your wine cellar dying), and theft! These disasters could wipe out your entire wine collection instantly. Does your homeowner's insurance policy protect your wine collection currently? In most cases, your homeowner's insurance policy would require you to obtain an additional rider to your existing policy to protect your wines. Your insurance company requires that a dollar value be placed upon your entire wine collection, and this service is best performed by an expert on valuation (i.e. certified appraiser).

The Wine Zealot Network wanted answers to our wine appraisal questions. We interviewed "The Wine Pragmatist" - Tom DiNardo. With five world records to his credit for the price of wine sold at auction, Mr. DiNardo is considered one of the country's preeminent charity wine auctioneers and wine appraisers. Tom DiNardo is a sommelier candidate, certified master appraiser and the founder of DiNardo & Lord Auctioneers. Tom is also a contract wine auctioneer for ERI, and a freelance wine writer for and Wine Enthusiast, Santé and Wine Adventure magazines.

WZ: Tom why should someone have their wine collection appraised?

TD: For anyone of a number of legitimate reasons. Top of the list is usually for insurance purposes. I have also appraised wines for legal purposes such marriage dissolution and probate.

WZ: Are there other reasons why the readers should have their wines appraised?

TD: Reasons such as personal investment, estate planning, charity donations, and tax issues come to mind. All of these legal concerns require the need for a certified appraisal. The 2007 IRS Tax Code requires that any donation made in excess of $500 dollars requires the attachment of a certified appraisal with the accompanying tax return in order to claim a full the charitable tax deduction a donor might be due.

WZ: What are the qualifications of a certified appraiser?

TD: "A certified appraiser is someone who possesses training and certification in the Uniform Standards of Professional Appraisal Practice (USPAP)." This is a federal guideline that was established by the US Congress in 1986. All USPAP certified appraisers are registered with the Appraisal Foundation in Washington DC, and are overseen by the appointed congressional sub-committee.

WZ: Are appraisers licensed?

TD: Only real estate appraisers are required to be licensed in most states. Personal property appraisers (i.e. wine) are not required to have a license, but are certified in USPAP just as real estate appraisers are. Unfortunately, your local wine shop retailers and distributors, although knowledgeable about the wines they handle and sell, are not qualified as appraisers, unless they are certified in USPAP.

WZ: How can someone spot a fraudulent wine appraiser?

TD: There are many appraisal organizations today awarding designations to appraisers, but do not be deceived by these designations alone! Only those appraisal organizations offering appraisal certification in USPAP are legitimate. Ask to see the appraiser's proof of USPAP certification or his proof of registration with the Appraisal Foundation in Washington DC. It is a violation of USPAP for any certified appraiser to charge a percentage of the appraised value as a fee. Legitimate appraisers charge a flat fee or hourly rate.

WZ: Do you offer any other services?

TD: Over the years, I have appeared as an expert witness in many court cases in which issues of valuation were disputed by individuals, insurance companies, etc. I have not lost a case for a client yet, or a case of wine for that matter.

The best way to protect your wine assets, aside from proper storage, is to have them professionally appraised. Tom's advice is to thoroughly inventory your wine and photograph it as well. This also applies to any and all preemptive measures that you may utilize to protect your wines such as wine storage units and storage containers. These steps you take will act as a record, as well as saving you time and money before you hire a certified appraiser.

Tom DiNardo is a licensed auctioneer, sommelier, wine educator, certified master appraiser and wine writer. © 2007 Tom DiNardo. All Rights Reserved.