This is the first of a three-part series on estate planning for special assets. First up, ART. Whether you are an avid collector or have acquired a few pieces of art over your lifetime, estate planning for pieces of fine art requires extra consideration.
Art, including fine paintings, sculptures, tapestries, and others, typically hold a special place in the heart of the owner. Even if a piece of art is considerably valuable, the real value to the owner is in the story behind the purchase, the artist or the emotion it evokes. This sentimentality is what makes extra planning crucial from a personal point of view, but issues of valuation makes the planning crucial for financial and tax purposes as well.
First, consider having your art professionally appraised and inventoried. A proper inventory should at least include a picture, description and appraised value of the piece. Second, consider protecting your art during your life by bringing your inventory to your insurance agent and confirming that your current insurance policy covers the art from theft, damage, fire or otherwise.
The inventory will also be helpful in planning your estate. Providing your estate planning attorney with the proper value of your personal property will allow for accurate gift, estate and income tax planning. Once you know the true value of your art, you can start asking yourself if your family and friends value the art in the same way you do. Would someone in your life enjoy this art as much as you do? If so, does the value of the art match the percentage of your estate you want that individual to inherit? If you doubt your beneficiaries will value the art, your documents can always require a sale at your death so as to avoid a disagreement between trustees and beneficiaries. Finally, is there a charitable organization you may want to leave the art too? If so, make sure the gift will be used for the purposes you wish. The options are endless, but without proper planning, leaving gifts of art can cause problems in the administration of your estate after your death.
As always, this blog is not meant as a substitute for legal advice and you should discuss your specific assets with an experienced estate planning attorney. Check back in soon for Estate Planning for Special Assets Part Two: Firearms.