There are no limits to what people collect throughout their lives, but art collectors are in a distinct category. Their collections may hold both sentimental and great investment value.
Adding your art collection to your estate plans is essential if you want your heirs to benefit from it.
What should you gather as you add your art collection to your estate plans?
There are many factors to consider when adding your art collection to an estate plan, according to The Smithsonian American Art Museum. It is useful to have as much information on the provenance of the individual pieces as possible, including:
- Purchase history: Where the piece was acquired, when and by whom
- Declaration of origin: From the seller or artist
- Certificate of authenticity: Contains all bibliographical and physical information
- Publications: Records of any catalogs, articles, auctions, press releases or websites in which the piece has appeared
- Condition report: Identification and preservation status
- Appraisal: Getting the entire collection appraised by a professional is key to documenting the value of the art collection as a whole.
Sometimes beneficiaries divide and sell off individual art pieces when the value of the collection may be greater than its components.
What else should you do to protect your art collection?
You love your art collection, so you naturally want to see it preserved. With that in mind:
- Talk to potential beneficiaries: Do they have the means to preserve and protect the art collection? Do they hold the same sentimental value that you do for the collection? Are there parts of the collection that they do not want? These direct questions can greatly help in the estate planning process.
- Consider all the options: You may want to sell the collection yourself and put the proceeds directly into your estate. Another option is to create a Limited Liability Corporation (LLC) and place the art collection in the LLC. This way multiple beneficiaries can be named as co-owners, and they can decide together the fate of the collection.
There are many strategies available with professional legal counsel that is experienced in estate planning. It is important to know your options and your rights as an art collector in Washington state.