A checklist of things to think about if you collect art
​and  
want to be able to dispose of it in the best way possible - whatever that may be.

Artists are not the only people whose estates can run into problems after the death. 
It also happens with the Estates of Art Collectors

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Art Collectors need good advice if their collection is to be disposed of in an appropriate way after their death.

• Some people collect because art because they genuinely appreciate it
• Some people collect art as part of an investment strategy for their wealth
• Some people do both

It's very much easier to generate questions about what an art collector needs to think about with respect to the eventual disposal of his or her art collection - than it is to come up with the answers!  

However if you don't know some of the questions to ask it's certain you'll never come up with the answers.

Here are some things to think about if you collect art and want to be able to dispose of it in the best way possible - whatever that may be.

William Hogarth - The Battle of the Pictures

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Handbook of Practical Planning for Art Collectors and Their Advisors
by Ramsay H. Slugg

Paperback: 144 pages
Publisher: American Bar Association
Publication date: November 7, 2015

This book is intended to be accessible to the American art collector as well as those who provide professional advice to art collectors.

It addresses three key issues relating to the ownership of art

• planning for the ultimate disposition of the art - including charitable solutions
• how to represent the wealth represented by the art in any estate and financial planning, and
• practical considerations for collectors as they collect and plan for the art's eventual disposition.
  

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Check List for Estate Planning for Art Collectors
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THE VALUE OF YOUR ART COLLECTION
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• The value of your art collection may well exceed your estimate
• Who is best placed to provide an accurate valuation of your art collection for probate?
• Does the death of an artist in your collection affect its value?
• Is your art more valuable as a collection or as the sum of the valuations for individual pieces?​

REFERENCE: ​Estate Valuation

• Artbusiness.com - Do Prices Increase When an Artist Dies? Facts About Death and Art Values
  Q: I bought six paintings from a pretty well-known local artist over a twenty year period during his career. He's pretty old now and I'm starting to think about selling. When's the best time to do that? Should I wait until after he dies?
• Valuing Art for Tax Purposes : Journal of Accountancy
  Beauty may be in the eye of the beholder, but art valuation requires reason and objectivity.Copyright: American Institute of Certified Public Accountants
• Geffen's Art Collection Tops In Value
  Wealth-X released a list of the top 10 billionaire art collectors worldwide. The collections have a combined worth of $9.18 billion, or about 18 percent of the group’s net wealth.

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DISPOSAL OF YOUR ART COLLECTION

Disposal of a small or large art collection can be tricky.

• do you use bequests of specific artworks to specific people - and will they be able to house/insure it?
• do you sell the collection off and use the proceeds for beneficiaries or philanthropic ventures?

The key thing is to make sure that an art collection that goes to auction is placed with the best auction house to reach the right people. I've seen some absolutely "art criminal" decisions in relation to disposal of some art - where it's very clear those interested in collecting such work were wholly unaware that it was being sold.



Key Questions

• Will your Executors know the best way to dispose of your art?
• Should you be considering a charitable donation?
• What happens to your art collection if you donate it to a museum?
• If your art collection goes to auction, which is the best auction house for disposal?  Do you want to research which company this should be in advance of death?

REFERENCE:
​Estate Planning - Disposal - for Art Collectors

• Making Plans for Prized Collections, Heartstrings Included | The New York Times
  In estate planning don't forget the collectibles. A collection can be sold, passed on or given away. But since its value is harder to estimate than publicly traded securities, even that process is complicated. 
• Estate Planning for Art Collections | New York Estate Planning Lawyer Blog
  With the economy improving, seasoned collectors are now watching the fine art estimates in New York's upcoming auctions. 
• Where there's a will, there may be a Monet -  a guide to estate planning for senior artists. Article in Lawyers USA, May 7, 2007
• Estate planning for valuable art
  If the client has valuable art, it is important that he or she assemble a team of advisers that understands how to deal with it. The team may include an attorney, financial adviser, tax specialist, and an art succession planner. 
• Succession Planning for Art and Collectibles | Whitney Trust and Asset Management
  
• Estates in Waiting: Which Collectors Are Being Courted by Auction Houses and Museums? | ARTNews

REFERENCE: ​​Keeping the Collection Intact 

• Withers Worldwide - Cultural assets & art
  Have you appropriately safeguarded your art and cultural assets?Do you have an appropriate succession plan in place to avoid your collection being divided upon your death?Will your art collection be protected against divorce proceedings?

DONATING ART - AND TAX DEDUCTIONS

A number of art galleries and museums have benefited from the donation of art over the years - in a donor's life time and on their death

There are however a number of considerations in relation to:

• purpose
• valuation
• tax status of a donation

A Tax-deductible Donation (USA)

The rules in the USA to realise a charitable income tax deduction are as follows

1. You have to donate to a public charity formed within the United States
2. The artwork must have been owned by you for more than a year
3. The donation must relate to the charity's charter and help it continue in perpetuity
4. The charity must agree to keep the artwork for at least three years
5. the value of the donation must be assessed by a fully qualified appraiser
6. You must really be an art collector (i.e. you can't be the artist or an art dealer)

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Donations of artwork to a public charity, such as a museum or university with public charity status, can entitle you to deduct the artwork's full fair market value. 

If you donate art to a private foundation, however, your deduction will be limited to your cost.

REFERENCE: ​Donating Art

• Donating to Charity | USA Government - Before donating to a charity or non-profit organization, make sure to do your research.
  
• How the New Tax Cuts and Jobs Act Impact the Art World | Hyperallergic - Under the new tax laws, the wealthiest will have even more incentive to make charitable donations, while the average middle class family will have less.
• Artbusiness.com - How to Donate Art - People who donate art to museums don't always realize the hopes and dreams they have for their donations. 
• How to Make Tax-Deductible, Charitable Donations of Artwork |  BNY Mellon - Where will your art collection end up? Will you pass it on to heirs, or will you donate it to a charity? If you want to donate art and take a tax deduction, make sure the donation meets IRS criteria.
• The Tax Deduction Ins and Outs of Donating Artwork to Charity​ | Doeren - In general, donating appreciated property is doubly beneficial because you can both enjoy a valuable tax deduction and avoid the capital gains taxes you’d owe if you sold the property. 
• No, You Can’t Get a Tax Deduction for Artwork You Donate to Charity | Hyperallergic - Some arts organizations misleadingly suggests that artists can get tax deductions for works they donate to charity. Here’s why that’s unfortunately not the case.

The Internal Revenue Service (IRS) rules contain detailed requirements about the qualifications an appraiser must possess and the contents of an appraisal. Doeren

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THE THORNY ISSUE OF TAX!
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• Have matters related to taxation - both your tax and the tax affairs of your beneficiaries - been considered when making decisions about the approach to disposal of the estate?
• Did you know that in the USA the IRS also has a service which reviews and evaluates appraisals of artwork in conjunction with federal income, gift, and estate tax returns"
• What are the tax myths about art collections?
• How can you make tax efficient decisions about your art collection?
• Have you considered your financial or tax adviser? Do they have adequate expertise in this field of interest?
• SEE Art and Inheritance Tax​

REFERENCE: Tax Considerations

• Withers Worldwide - The UK as a jurisdiction for the international art collector 02 March 2009
  As individuals become more mobile and society increasingly international, there is a growing awareness that the tax policy of different jurisdictions can influence lifestyle choices. 
• "Canyon" Controversy - Blame The Advisers Not The IRS - Forbes
  The lesson is that Scenario Planning, in the face of possible reactions by the IRS, is necessary to give owners of art and collectibles options.
• Advanced Estate and Tax Planning for Art and Other Fine Collections | InKnowVision - JDSupra
  So what's the problem? The problem is that collectors and their families can lose, at minimum, as much as 75% in the value of the collection if upon death items are sold through traditional means.
• The IRS Art Advisory Panel Has Its Head In The Clouds - Forbes
  Art pros never considered the fact that Robert Rauschenberg's famous collage "Canyon" can't legally be sold, before valuing it at $65 million in Ileana Sonnabend's estate. Surreal.
  

The Art Collector's Handbook:
A Guide to Collection Management and Care
by Mary Rozell

Series: Handbooks in International Art Business
Hardcover: 232 pages
Publisher: Lund Humphries;
Publication date: New edition March 1, 2014

Provides the first comprehensive overview of art collection management, for collectors and professionals. There are There are chapters on how to acquire art, cataloguing the collection, approaches to valuation, insurance, shipping and storage, conservation and collection care, sharing collections, and parting with the collection.

• Includes coverage for the first time of legal issues for non-legal professionals 
• An essential resource for art collectors at all levels, managers of art collections, art advisers, appraisers, artists, and auction houses and their clients

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• Estate Planning for Artists
• Famous Artists Estates
• Artwork Inventory
• After the Death of an Artist
• Copyright and Resale Rights for Heirs
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