Via Marketwatch.com:

A generation of older adults is getting ready to pass on their collectibles — everything from rare books to comic books — to their adult children and grandchildren. But without proper planning, these prized possessions could wind up being dumped in a yard sale.

Collectors, in many cases, hope their children will share their passion for accumulating and preserving, say, an assortment of “Stars Wars” action figures. At the very least, owners of such collections may anticipate that another collector will write their heirs a sizable check for the items, or that a museum will gladly accept — and display — their treasures for posterity.

But as Veronica Dagher recently reported in The Wall Street Journal, such hopes often clash with the reality of indifferent family members or a fickle marketplace. Collectors who fail to plan carefully could see the fruits of decades of labor discarded without thought — and could miss out on tax savings, says Katherine Dean, managing director of wealth planning at Wells Fargo Private Bank in San Francisco.

If you have a collection that you hope to pass along, sell or donate, consider these steps:

Passing it on

The first step: gauging family members’ interest in your treasures. If someone does, in fact, share your passion, you need to make sure that he or she can afford the upkeep, including insurance and storage, says Carol Kroch, managing director of wealth and philanthropic planning at Wilmington Trust in Wilmington, Del.

People who want to pass on some of their collection while they still are alive could consider making annual gifts to start removing the value of the collectibles from the taxable estate, Dean says. (Individuals can make such gifts of up to $14,000 annually to anyone they wish without tax consequences.)

Selling it

If your heirs aren’t interested in your collection, you might decide simply to sell it. In that case, you would first need to determine the collection’s fair value, using an independent appraiser, says Tim Speiss, chairman of personal wealth advisers at EisnerAmper in New York.

Note: Collectibles are taxed at the higher capital-gains rate of 28%, and the sale also may be subject to other costs, such as commissions and shipping.

Donating it

Finding a museum or a similar institution to accept your collection could be tougher than you think, says Wilmington Trust’s Ms. Kroch. Even if you find one, the organization might require an endowment fund to maintain the collection, she adds.

Gifts of appreciated tangible personal property held more than a year and donated to a public charity are deductible in the year of the gift to the extent of up to 30% of the donor’s adjusted gross income, and the unused deduction can be used for the next five years, subject to the 30% limit.

In addition, the charity must use the donated property for a related purpose or the donor won’t be permitted a full fair-market-value deduction.