Texans who are thinking about their estate planning needs will frequently focus on the basics, such as asset distribution and basic property matters. However, if it is a person who has accrued wealth and used some of that wealth to collect items, such as art, this enters the realm of complicated estate planning. For those who have collections whose value can be confusion to the uninitiated and might fluctuate based on markets and desirability, it is wise to have strategies to account for these properties. With art, this is particularly important.
For people who collect art, they might do so as an investment or because of a personal preference and eye for what they like. Collecting is different from disposal and if they are ardent collectors, selling the pieces is not something they consider. After death, this can be an issue for heirs, especially if the collection is vast and could have major value. Frequently, these individuals do not consider their art to a major degree when they craft an estate plan. If they do not do so, it can lead to massive costs to the heirs with estate taxes raised significantly.
Some people who have a large and potentially valuable collection of art will not want to think about what will become of their beloved pieces after death and do not take the necessary steps they might take with homes, vehicles, stocks, cash and retirement accounts. There are steps for an art collector to take to protect their loved ones and the art.
For example, a corporate entity can be used for an art owner to deal with ownership and the simplifying of the probate process. Other factors that could arise include proving ownership of the pieces and having certificates of authenticity, proof of purchase, insurance and other foundational matters.
When drafting estate planning documents, having a grasp on everything the testator owns is key. Those who take the time and cultivate their likes and dislikes with an art collection should not shun the importance of accounting for these items when they create their estate plan. Having legal advice from a law firm that has experience in a wide variety of estate planning issues can protect the art and the heirs from protracted legal battles and disputes.
Source: forbes.com, “Estate Planning And Affluent Art Collectors,” Russ Alan Prince, Jan. 8, 2018