The Wall Street Journal - 21.10.2019

R6| Monday, October 21, 2019 THE WALL STREET JOURNAL.

JOURNAL REPORTS | WEALTH MANAGEMENT

You inherited an art collection from an artist
friend or family member. You think the pieces
have merit beyond cluttering up your home or
a storage unit. But you don’t really know how
to find out—and how to sell it if that’s what
you want to do.

What do you do?
If you are left with only a small number of
works, consider hiring an appraiser to value
the pieces. This is especially important if
there are any comparables—that is, the artist
sold some pieces during his or her lifetime.
Art dealers are unlikely to want to repre-
sent the work of a relatively unknown artist
when there aren’t many works on hand. So
the best approach may be to donate pieces to
an institution—such as the college, university
or art school that the deceased artist at-
tended; a local historical society, if the artist
was a prominent member of the community;
a local library; or a charity auction.
But what if there is an extensive collec-
tion? Then you will need to do what Richard
Lehun, a New York-based art lawyer who reg-
ularly works with artists’ estates, calls “col-
lections management.”
This involves identifying where all the art-
work is located, then having all the pieces
photographed, dated, numbered, described
(medium, subject matter, techniques em-
ployed) and contextualized, or providing bio-
graphical and art-historical information that
would give artworks additional meaning and
interest. Then, that all needs to be digitized

BYDANIELGRANT

Let’s start with your second question. You are

correct: If your former wife files for benefits

as a divorced spouse based on your earnings

history, your benefit (whenever you decide to

claim Social Security) wouldn’t be reduced or

affected in any way.

As for whether you would be alerted if/

when your former wife takes this step, the

short answer is: no.

“When a divorced spouse receives benefits,

the number holder isn’t proactively notified,”

says Darren Lutz, a public-affairs specialist

with the Social Security Administration. (In

this case, you are the “number holder”; your

former wife is eligible to claim a benefit based

on the particular Social Security number you

hold and the work record tied to that number.)

That said, you are entitled to “limited infor-

mation” about who, if anyone, is drawing ben-

efits based on your earnings history, Mr. Lutz

adds. Such individuals, which include your for-

mer wife, are known as “auxiliary beneficia-

ries.” To be specific, you can get the name of

an auxiliary beneficiary; the date that an aux-

iliary beneficiary became entitled to benefits;

the amount an auxiliary beneficiary is eligible

to collect; and whether benefits have ended.

On the flip side, the Social Security Admin-

istration won’t give you the address or con-

tact information for an auxiliary beneficiary,

and the agency won’t give you the size of the

monthly payout that an auxiliary beneficiary

is actually receiving. That’s an important dis-

tinction. The payout can differ from the bene-

fit a person is entitled to collect. For instance,

Medicare premiums or taxes could reduce the

size of one’s Social Security check.

Note: There is no special form to fill out.

You simply can talk to or write the Social Se-

curity Administration.

to make substantial adjustments in spending

to manage” reversals, the society states.

“Many are managing very well.”

For my part, the following hidden costs,

some of which are noted in the society’s

study, are mentioned frequently among retir-

ees I’ve interviewed:

- Replacement costs. Big-ticket buys—a new
furnace, updated appliances, a fresh coat of
house paint—can put sizable dents in your
nest egg. But most people don’t consider that
these outlays can follow them into later life
or that such costs can continue to add up for
decades. A contributing factor: Many retirees
underestimate their life expectancy.
- Relatives in need. This can hit you from
two sides: aging parents feeling a financial
pinch and younger family members who sud-
denly find themselves in a bind. With the lat-
ter, perhaps it can be an adult child who gets
laid off or divorced, or a grandchild who
needs help with tuition.
- Required distributions. Most people know
that, after reaching age 70½, they must begin
withdrawing funds from tax-deferred ac-
counts (like IRAs). What they fail to under-
stand are the ripple effects. Required mini-
mum distributions can, first, push you into a
higher tax bracket and, second, translate into
increased Medicare Part B premiums (which
are tied to annual income).
It’s not possible, of course, to anticipate
and hedge against every financial surprise in

later life. But two steps can make a differ-

ence. First, try to avoid major expenses (new

roof, new car) in the first five years of retire-

ment, the time when you and your nest egg

are most vulnerable to bear markets. Second,

as I’ve noted in an earlier column, keep saving

in retirement. In particular, setting aside

money regularly for home repairs and upkeep

will help keep your budget on track.

iii

My former wife and I are both 65. We

were married for more than 10 years, and

we have been divorced for four years. At

the moment, I am not collecting Social Se-

curity. I have two questions. First, if she

claims benefits based on my work record,

will I be notified? Second, as I understand

it, if she does file for benefits as a di-

vorced spouse, my benefit will not be re-

duced. Is that correct?

The Expenses People Often Forget

When They Plan for Retirement

I’m working on a budget for retirement.
Could you tell me the expenses that peo-
ple tend to miss or overlook after leaving
work? I’m trying to avoid as many sur-
prises as possible.

Good question. “Stealth expenses,” as one re-
tiree described them to me, are waiting be-
hind any number of corners in retirement.
The fact that you’re thinking about these pos-
sibilities now can help reduce pressure on
your nest egg in the future.
Start with a 2017 study from the Society
of Actuaries: “Shocks and the Unexpected: An
Important Factor in Retirement.” (Go to
soa.org and type title in the search box.) This
report identifies the financial surprises that
retirees are most likely to face and offers sev-
eral strategies to deal with them.
Unfortunately, “many people are poorly
prepared for unexpected expenses” in later
life, the study notes. Even worse, about one in
five retirees (19%) and one in four retired
widows (24%) experienced four or more
shocks during retirement. The good news:
Many older adults who get hit with stealth
expenses appear to bounce back.
“Retirees are resilient, and they are willing

Also: We answer a reader’s

question on Social Security

benefits for a divorced spouse

ASK ENCORE|GLENN RUFFENACH

About one in five retirees

and one in four retired

widows have experienced

four or more financial

shocks during retirement.

Mr. Ruffenachis a former reporter and

editor for The Wall Street Journal. His

column looks at financial issues for those

thinking about, planning and living their

retirement. Send questions and comments to

[email protected].

Financial Surprises

Surveyed retirees said they had been hit with

the following unexpected expenses

24%

20%

16%

15%

15%

14%

14%

12%

9%

Major home repairs/upgrades

Major dental expenses

Drop in home value of 25% or more

Illness/disability

Running out of assets

Going on Medicaid

Family emergency

Loss in total value of savings of 10% or more

Sudden loss in total value of

savings of 25% or more

Significant out-of-pocket

medical/ prescription bills

28%

Note: Includes multiple responses

Source: Society of Actuaries

and put in a databank.

It’s “creating an infrastructure, be-

cause that’s what dealers and curators

need,” Mr. Lehun says. And creating

that infrastructure takes time and

money. “Figure five years and

$200,000 just to get going, to try to

move the needle,” he says.

For starters, there’s the initial con-

sultation to determine whether a col-

lection merits all that work. Jason An-

drew, founding partner of Brooklyn-

based Artist Estate Studio, says

consultations cost $200 to $500.

Then there are surveys, which in-

clude making an inventory of the col-

lected material and thematic sorting

of documents (childhood, influences,

association with famous artist X, any

exhibitions and sales, etc.) Janine St.

Germain, an independent archivist,

says surveys can range from $1,000 to

$10,000, based on a collection’s size.

Mr. Lehun also recommends hiring

an art historian, such as a critic or

university art professor, to prepare a

scholarly essay about the artist and

his or her historical importance, if there is

any. Fees can run by the word (typically $3

to $5) or someone might be hired on a per-

project basis. “You want this artist and this

body of work contextualized with other art-

ists, preferably more successful artists,” he

says, “so that you can approach the dealers

of those more successful artists.”

Then comes the harder part: shopping

around a collection.

This involves showing the artwork to peo-

ple and institutions that might find it worthy

of being displayed and/or sold—gallery own-

ers, directors of nonprofit art centers and lo-

cal historical societies, curators at college and

municipal museums, even the directors of li-

braries, hospitals and other sites that are not

specifically identified with art but may some- FROM TOP: MARTIN TOGNOLA; JOHN DEAN

times display it.

One option is to create a founda-

tion to take on the role of overseeing

the organization, management and

promotion of a collection. Setup could

run $5,000 to $25,000, depending on

the scale of the enterprise—and would

require the services of a lawyer and

accountant.

When Frayda Shalowitz, a 77-year-

old Baltimore sculptor, died in 2018,

her sister, Judy Levy, and nephew,

Ariel Levy, found themselves with the

almost 2,000 pieces the sculptor had

created over more than 50 years.

The Levys first went to several

area art galleries and then sought out

a Baltimore auction house to help sell

Ms. Shalowitz’s pieces. The auction

house referred them to Baltimore-

based Full Circle Fine Art Services,

which works as an intermediary be-

tween artists and the art world.

Brian Miller, chief executive of Full

Circle Fine Art, began by digitizing

the collection, creating a “visual cata-

log” of the artwork, then setting up a

website to showcase Ms. Shalowitz’s

work. The Levys also hired a curator

to put together a catalog of the work

that could be sent around to small

colleges and museums.

Mr. Levy says they have spent thousands of

dollars preparing Ms. Shalowitz’s collection

for its close-up. Once a digital catalog and

flier are complete, the curator is going to

reach out to several institutions “to test the

waters,” he says.

Mr. Grant is a writer in Amherst, Mass.

Email: [email protected].

YouInheritSomeArtWork.

NowWhatAreYouSupposedtoDo?

A sculpture created by Frayda Shalowitz

,