Prosperous individuals are fortunate enough to be able to be extravagant when it comes to collecting things they are passionate about, such as artwork or other collectibles. Wealth allows them to purchase the best of the best, affording them the opportunity to be very particular about their taste and desires. However, particular as they may be, it is usually much easier and more fun purchasing these grand items than it is to decide what to do with them after their demise.
When collectors become attached to their artwork, often the value of that piece becomes emotional, making it hard to decipher its true value. Who should the piece go to? Who will preserve the value going forward? Will their heirs want it? All these questions can result in indecisiveness, which results in procrastination when it comes to estate planning.
That is the reason so many wealthy estates end up with beautiful paintings and other collectibles being auctioned off after long periods of probate or feuding among family members. Here are some tips that might help in estate planning if you are an art collector.
Keep files on all of your art pieces, whether they are paintings or beautiful carved vases. Files should include documentation such as certificates of authenticity, receipts or bills of sale and insurance policies for any pieces insured. Note the true value of the item apart from any emotional value.
Speak with your estate attorney about any tax consequences your heirs might have in regards to the value of the art. Ask for advice. Consider donating the art at your death, perhaps to a corporation or a charity that will display the pieces for years to come. You may even solicit opinions from your heirs to see if anyone has inherited your sentimental attachment to a particular piece or pieces.
Making decisions on what to do with your valued collectibles doesn't have to be hard if you are organized and listen to the advice of your estate attorney. It is just a matter of doing it. Don't put it off or your valuable collection may end up in someone's garage.
Source: Forbes.com, "Estate Planning And Affluent Art Collectors," Russ Alan Prince, Jan. 8, 2018