Estate Planning for an Art Collector: Including Art and Collectibles in Your Plan
Estate planning is important for anyone who wants to have a say in what happens to their assets after their passing, as well as for anyone who wants to ensure that the maximum amount of their estate gets distributed without losing value to taxes, creditors, and other parties along the way. While folks with standard assets like bank accounts, stocks, and the family home have enough to contend with when planning their estate, art collectors have special concerns. Art collections can hold great sentimental value while simultaneously carrying significant investment value. For those reasons, art collectors should take special care to cover all of their bases when creating an estate plan. Continue reading for estate planning tips for art collectors, and call a knowledgeable Vancouver estate planning attorney for help preparing your estate in Washington State.
Gather the Documents to Protect and Value Your Collection
When you’re gearing up to prepare your estate plan, it’s important to ensure that your art collection is properly validated and valued. Make sure that your collection is properly cataloged, photographed, insured, and appraised. Gather the documentation necessary to authenticate, identify, and value your art. Important documents may include the purchase history, a declaration of origin, publications about the piece including press, journals, articles, and press releases, and condition reports. Make sure to keep records of appraisals of individual pieces and the collection as a whole.
What to Do With Your Collection
What will you choose to do with your art collection? Depending upon the nature of your collection, your relationship to your pieces, and other priorities, you have a few options. You can choose to donate the collection, or specific pieces, to museums and other charitable organizations. In fact, donating art pieces to charities can create substantial tax deductions for your estate; donating while you are still living can even give you a significant income tax deduction.
You can, of course, bequeath your collection to beneficiaries. If you have family or friends that would cherish your pieces as you did in your lifetime, you can choose which pieces go to whom. Better for you to decide ahead of time and dictate the distribution in your will than to have unnecessary family squabbles arise over this piece or that. You can gift individual pieces to family members, or transfer the entire collection over to a trust to pass along to beneficiaries after your passing. You can also choose to have the collection go to an LLC, allowing your beneficiaries to share in the value without needing to manage specific pieces.
Finally, you can indicate your desire to have your collection sold. Having your art sold after your death will add value to the estate without incurring substantial capital gains taxes. You may find it easier to have your collection sold and the proceeds passed to your beneficiaries rather than asking your family to carry on your preservation work.
Talk to your family, talk to art experts, and talk to your estate planning lawyer to discuss your options and see what works best for you. You’ll want to weigh interpersonal considerations as well as tax consequences, valuations, legal concerns, and other issues.
Working with a qualified estate planning professional can help you establish a plan that works for you, your spouse, and the rest of your family. We’ll provide you with comprehensive estate planning guidance to ensure that your affairs are in order and your loved ones are protected. Contact the experienced and detail-oriented Washington estate planning attorney John Lutgens in Vancouver at 360-693-2119.