So, how should families fortunate enough to have valuable collections decide what
to do with their art or other objects? Here are some options.
As the saying goes, “One man’s
trash is another man’s treasure.” So it is with art.
For some people, the most
valuable art pieces are the classics that have survived a few centuries. Other
people prefer styles that may involve a lot of dribbled paint and found objects.
Of course there are people who really appreciate velvet Elvis paintings and
those featuring card playing canines. In the end, to each his own.
The IRS, on the other hand, will
assign a market value for taxation purposes. So, how do collectors and their
estate planning attorneys make proper plans for the transfer of such treasures
Recently, estate planning issues
regarding art have received media attention (to include the strange case of Ileana
Sonnabend) as highlighted in a recent article in the Wall Street Journal appropriately titled The
Art of Passing Along Art.
As the article notes, the major
problem with making an estate plan to transfer art is the nature of “art”
itself. For example, will your heirs appreciate your taste in art and how will
the IRS value your art? In a worst case scenario, the heirs do not like the
art, but the IRS does (for valuation purposes) and levies estate taxes on the
Ultimately, you need to ask
yourself why you are giving the art collection in the first place. Are you
giving to an art-lover or in lieu of liquid assets? Are you actually giving to
the beneficiaries or are you simply trying to find safe homes for the pieces?
Whatever your wishes, there are
estate planning solutions. However, you need to prioritize your own goals and wishes
for your loved ones, as well as for your art treasures.
Reference: The Wall Street
Journal (March 2, 2012) “The
Art of Passing Along Art”