Art collectors are in a unique category. Unlike other collections, art collections can be both sentimental and valuable investments. Because art collections can involve special care and conservation, they should be handled with special considerations when undergoing estate planning.
Proactive estate planning can help to reduce the risk that an art collection will be treated improperly. There are many estate planning factors concerning art collections.
Four steps to proactive estate planning
According to The Smithsonian American Art Museum, here are a few things to think about:
- Documentation: It is necessary to proactively gather all documentation about the provenance of each art piece in the collection, including purchase history, declaration of origin from the seller, certificate of authenticity, publications where the art piece has appeared, condition reports, etc.
- Appraisal: It is important to not only have an appraisal of the individual art pieces, but also the value of the art collection as a whole. Sometimes, the value of the collection may be greater than its individual components.
- Potential beneficiaries: It is important to communicate clearly and honestly with the people who are intended to receive the art collection. Many art collections require special conservation measures. Do they have the means to preserve and protect the art collection? Direct questions can help to gain clarity in the estate planning process.
- Consider all the options: Some art collectors decide to sell the collection themselves and put the proceeds directly into their estate. Others choose to create and place the art collection into a Limited Liability Corporation (LLC). With an LLC, multiple people can be co-owners of the collection.
Estate planning can be a sensitive task. Don’t be afraid to ask for help. Legal guidance from someone experienced in estate planning can help you be aware of all the options an art collector has under Colorado law.