The art we choose to value contributes to our stories—those we tell and those that will be told about us. Whether you have a few cherished antiques, splurged on a work of modern art that spoke to you, or invested in a big collection, carefully incorporate your treasures into estate plans.
Estate planning experts stress that art collections warrant particular attention. Considerations include value assessment, tax implications and your intentions about how the artworks are to be managed and displayed upon death. Attorney David Riedel of Adler Pollock & Sheehan offers this guidance:
It’s vitally important to have your collection appraised periodically by a professional. The frequency depends in part on the type of art you collect, but generally it’s advisable to obtain an appraisal at least every three years, if not annually.
Regular appraisals give you an idea of how the collection is growing in value and help you anticipate tax consequences down the road. Also, most art donations, gifts or bequests require a “qualified appraisal” by a “qualified appraiser” for tax purposes.
In addition, catalog and photograph your collection and gather all appraisals, bills of sale, insurance policies and other provenance documents. These items will be necessary for the recipient or recipients of your collection to carry out your wishes.
How Will The Art Live On?
How do you envision your loved ones enjoying your collection in the future? Have a thought that a local art center, museum or university might appreciate it exhibiting it? On the other hand, are their ways in which you would not want your art collection utilized or displayed? What are the tax implications of your decisions for your estate and beneficiaries? All these are examples of what experts encourage you to think through—and discuss with your family—while you have the opportunity.
One approach that may serve your purposes is a trust. As Reidel explains:
If you prefer to keep your collection in the family, you may opt to leave it to your heirs. You could make specific bequests of individual artworks to various family members, but there are no guarantees that the recipients will keep the pieces and treat them properly. A better approach may be to leave the collection to a trust, LLC or other entity — with detailed instructions on its care and handling — and appoint a qualified trustee or manager to oversee maintenance and display of the collection and make sale and purchasing decisions.
What is a Trustee Bond?
A trustee bond is a type of fiduciary bond: it guarantees the beneficiaries that the trust will be administered in accordance with state law. Although sometimes waived if the trustee is a relative or friend, trustee bonds can help inspire the confidence of everyone involved as the trustee carries out the essential duties described in the trust agreement.
Trustee bonds can also be referred to as estate, executor or personal representative bonds. It is quick and easy to obtain any of these bonds from leading, national provider: Colonial Surety Company. Just get a quote online, fill out the information, and enter a payment method. Print or e-file the bond right from your home or office—even the art museum. With Colonial’s direct, digital bonds, it’s that simple.
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