Planning Your Estate: Art + Collectibles

Everyone dies. Bottom Line. You cannot escape death. Often times, you have no control over our death – you have a constant invisible countdown. What you do have control over is determining what happens to your life’s work after your death. All the wealth you’ve accumulated, all the items you’ve collected, all the houses you’ve bought – these are all things you’ve spent your life building towards obtaining. You worked long hours to build a name for yourself and upon death, it is ill-advised to leave everything up in the air. Your items may be dispersed in a manner you don’t approve of. It could be auctioned off to greedy buyers looking to make a quick buck.

There are many reasons one should consider creating an estate plan that includes instructions for art and collectible items. For many, art holds more than just monetary value. When your personal possessions mean something to you – when you connect genuine emotions to things like artwork – that’s when you should really think about putting something down in writing in case you become incapacitated. The amount of time you’ve spent acquiring items and taking care of them adds a sentimental value to them. Once you determine whether or not your collection means enough to plan for it, you should consult with an estate planning attorney to begin the process.

The first step in the process is taking an inventory of your collection. Whether it be a 25 piece art collection or a 2,000 piece PEZ dispenser collection, taking an inventory will make putting the property into your estate much easier, especially if you plan on donating your collection upon death or bequeathing it to a family member/friend. It also has the potential to be a very self-fulfilling process to see just how many items you’ve collected over the years.

Your art collection inventory must include information that identifies the piece such as a serial number, a description of the piece, invoice/bill of sale, and any other item markers you wish to include. It is important that these identifying markers are included so each work can be accounted for. In the instance of a collection agency seizing the artwork, it saves potential claims being filed against the benefactor who has been given the art.

Below is a sample of an art inventory:

Inventories can take many different forms and should be customized to fit your individual collection. The inventory is a crucial tool that provides key information on your entire collection so care must be taken when making it.

Another option for building an inventory is using an inventory management software such as Collectify or Artwork Archive. Using online software can be beneficial as it provides added security and can accomodate larger collections more easily.

Most estate planning lawyers will not have the required knowledge to evaluate art and place it on a monetary value scale. Knowing how much the pieces in your collection are worth can make the taxation process easier after your death. An ideal option is to place your art collection in a life estate, which grants you usage rights until death and then donates the collection to a selected museum/company. Collections can also be used as collateral to pay back any debts. Finding an accredited appraiser to evaluate your collection will make things much easier for your estate planning attorney.

Picking an inheritor for your collection is very important. An inheritor can be family members, friends, mentors, etc. This person will take over the ownership of the pieces/collections you designate in your will. In addition to offering the collection to someone you know, you can donate pieces or entire collections to museums, charities, and other institutions. This option can offer tax return benefits depending on the value of the collection.

Incorporating a clause that dictates what happens to personal item collections such as artwork can make the process much easier for your estate planning attorney and any benefactors listed. It is important to consider all of your options before making any final decisions.