Artwork and Your Legacy: Five Planning Options for Stewarding Your Collection

 

Executive Summary

Art collections often represent an important part of a family’s legacy, making their stewardship fraught with emotional and financial considerations. This article explores options for passing on a collection.

Key Points

  • Gifting to heirs - Talk with your heirs about their preferences and interest in your art. Some family members may want your collection, or pieces of it, but may be unaware of the accompanying insurance and/or security responsibilities. Also, consider the different tax consequence between gifting during your lifetime and at your death.
  • Selling your artwork - If you sell your collection, the proceeds can become a portion of the wealth you pass on to your heirs, or they can be used to make a charitable donation.  The timing of a sale has important tax implications; leaving instructions to do so after your death may be the most appropriate choice.
  • Creating a Private Foundation - This allows you to essentially create your own museum although it does require considerable maintenance as well as ongoing financial and administrative support.
  • Donating to a museum - This option lets you share your collection so that it can be viewed by others. Gifting to a museum does not guarantee your artwork will be shown; it could be sold or put in storage. Learn the museum’s policies as some artwork may be in more demand than others and you may find only portions or select pieces are sought.
  • Benefiting charitable groups - You may want to have a charitable impact beyond the art community.  If so, consider whether it is better to donate the work to the organization or sell the work and donate the proceeds.  There may be negative tax consequences of donating artwork to an organization if the artwork is not used in a way that relates to the organization’s charitable mission.

Conclusion

Deciding the future of your artwork is a personal, complex decision.  Some collectors envision their artwork on the walls of a museum or benefiting a charity.  Others hope their heirs will become stewards of their collection, or they may find selling the collection best meets their goals. Planning strategies can provide you with the peace of mind to make the decisions that are right for you.

"Who will treasure your treasures when you cannot?"


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