The value of a fine art collection is both monetary and sentimental. Unlike other investments like stocks or real estate, art is often a passion and becomes very personal.
It can be challenging for collectors to think about how they will incorporate their collection into their estate planning. Careful forethought is essential for the collector to maintain control of what happens to their beloved collection, even after they are gone.
Planning is Critical
Collectors who do not specify what will happen to their art after they pass risk having their collection dealt with in a way they would never want.
Careful planning, however, will ensure the fulfillment of the collector’s wishes. Collectors have three options for what to do with their collection after they pass. Most collectors either gift, donate or sell their art. No matter what the preferred course of action is, they should be sure to have all relevant paperwork, such as bills of sale or appraisals, in a safe and accessible place.
Gifting to Heirs
The first step to planning the art collector’s estate is to speak frankly with children or any other potential heirs to determine their interest in the collection. The entire collection, or individual pieces, can then be gifted upon the passing of the collector to whomever they choose. Collectors should beware of the potential for conflict between heirs should they disagree on what to do with the collection. They also should recognize that their loved ones may not want to maintain the collection for which they have so diligently cared.
Donating to a Museum or Charitable Organization
One way to keep a collection together and know that it is appreciated is to donate it to an art museum or other charitable organization. The collector can also create their own museum to preserve their legacy in the art world. This option can potentially benefit a cause close to the collector’s heart and comes with tax benefits.
It is vital to put into writing specific guidelines for the display of the art, though, to be sure the collector’s wishes are followed.
Selling the Collection
Selling art can be more expensive than other assets. There are commissions, shipping, insurance and complicated tax rules to follow. However, it may be the right choice for some either while alive or after death.
Consult an Attorney
It is critical to consult an estate planning attorney who can protect and guide a collector when making these highly personal choices. Meticulous planning will protect both the art collection and the loved ones of the collector. At the New York estate planning law firm, Littman Krooks, LLP we have over 25 years of experience helping families plan for their future. To learn more about the varying services we provide and how we can assist your family with its unique needs, call 914-684-1200 to schedule a meeting today.
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