The next time you’re chatting with a client who likes to speak ad nauseam about his or her passions, take note. The conversation could lead to a discussion of personal assets–artworks and collectibles–that should be integrated into a charitable or estate plan.

“Art collectors don’t want to have their collections carved up upon their death,” says Peter May, a financial planner and vice president of Wachovia Wealth Management, Charlotte, N.C. “They want the collection to remain intact for beneficiaries–a foundation, museum or their children.”

Yet, wholesale sell-offs of collections that have taken a lifetime to accrue can happen easily when clients don’t factor these “silent assets” into their estate plans. Too often, sources tell National Underwriter, clients try stealthily to pass on valuable personal property to children, only to be disabused of that notion when the Internal Revenue Service comes calling to do an audit.

To head off that possibility, advisors need to probe clients about artworks and collectibles they own during initial fact-finding sessions. That frequently comes as a big surprise to clients who view such assets as marginally relevant (if relevant at all) to a financial or estate plan.

In fact, says May, generally between 8% and 15% of a client’s net worth comprises their “stuff.” Assuming a $20 million estate, that can add up to $3 million in personal property–well within the IRS’ estate tax crosshairs.

To be sure, not all collectibles carry million-dollar price tags. Joseph Halpin, an automotive enthusiast, financial planner and president of J.P. Halpin & Co., West Chester, Pa., says most of the antique cars he sees at auto shows range from $100,000 to $400,000, and the vehicles constitute but a minor portion of his clients’ estates. Only occasionally does he eye a vehicle of rare vintage, like the Duesenberg or Pierce-Arrow, which can sell for millions.

Gaining a handle on a collection’s value needn’t be an expensive or time-consuming affair. Advisors point to a growing wealth of information on the web, including online auction sites like eBay, that offer detailed pricing information based on an item’s make, provenance, rarity and condition. Clubs and associations that devote themselves to particular collectibles are also a source of ready information.

But the truly prized painting, humidor or music box may require an appraisal by a specialist. Observes Jim Meyer, vice president of the Heritage Group, Melville, N.Y.: “As long as an item’s fair market value can be established–not by a charity, which should never do that–then the owner can incorporate the asset into estate planning in terms of gifting.”

The undertaking need not only be done for estate planning purposes. Observers say an appraisal may also be needed to insure the collectible against theft, loss, damage or to prevent confiscation by creditors.

Such asset protection planning can, in turn, yield estate planning opportunities for advisors. Herb Daroff, a principal at Baystate Financial Partners, Boston, Mass., knows that firsthand. For one wealthy collector of antique pendulum clocks, Daroff proposed transferring the time pieces to a life insurance-funded charitable lead trust to shield them from liquidation. But the objectives of the gifting technique–a charitable income tax deduction for the client, the display of the clocks at a museum while held in trust, and their ultimate transfer to the client’s children tax-free–yielded estate planning benefits.

The public display of prized collections can secure other advantages. Daroff advised one client to allow the Boston Museum of Fine Arts to store paintings created by a famous American naturalist–artworks that Daroff pegged at 75% of the client’s net worth. The client then induced the museum to display the works, thereby raising their prominence and market value. That enabled him to sell one of the pieces to fund long term care expenses for an uninsurable parent and to pay estate tax on other paintings bequeathed to children.

Michael Kilbourn, a principal at Kilbourn Associates, Naples, Fla., cautions that the disposition of collectibles will affect their market valuation and how they’re taxed. If a charity is permitted to display and keep a donated work, then the donor enjoys a tax deduction based on the piece’s fair market value. If, however, the work is to be sold for investment or other reasons, then the work’s cost basis governs.

“There’s nothing wrong with a charity planning to auction off an artwork for fund-raising purposes,” says Meyer. “But the painting has to be held for a certain period of time. If the charity doesn’t meet this requirement, then it actually can nullify the tax benefit of the gift.”

More often than not, advisors say, the tax advantages that clients seek are for their children’s benefit, not that of a charity. Thus, other estate planning techniques–among them the use of irrevocable life insurance trusts, defective grantor trusts and annual gift tax exemptions–tend be more widely used when planning around artworks and collectibles.

“There’s no single best way to deal with valuable collections,” says Kilbourn. “Each situation is different and requires a careful reading of the client’s financial situation and intentions with respect to the collection.”