When it Comes to Your Art Collection, Even the Taxman is an Admirer
Nov 18, 2016
It’s no surprise that failing to plan ahead can have negative tax implications and this includes your art collection. For example, in the US there is a lifetime gift tax exemption of $5,430,000. Or if you decide to give a charitable gift of art, you can be rewarded with a tax exemption. All of these avenues require carful planning as navigating the tax codes can be challenging – especially when dealing with high asset values.
Putting together a team of professionals is key to achieving a great legacy plan
You’re going to need a certified financial planner for any estate planning. But when it comes to art, you should include an art appraiser in the mix explains Xiliary Twil - art historian, collector, and founding valuation expert of Art Asset Management Group, Inc. It can also be helpful to have a curator or gallery involved as these experts can help you decide what to gift, donate, or dispose. Key to this team is an insurance specialist who specializes in art.
Another pillar to your legacy plan is to appoint an art trustee. An art trustee will know which pieces are worth preserving for future generations and which are not.
An art trustee is also going to include the family’s considerations when directing these transactions. This is where talking to your family is key. Find out which pieces of art family members cherish and which ones make their eyes burn.
Maybe one child (if you have any) may love a work that is worth only a few thousand dollars and another child wants to have a work of art worth tens of thousands. You may have to consider the monetary aspects of bequeathing works in such situations.
There is one final step with art legacy planning, and it’s one that anyone can do; buy a good art management program.
This will allow you to catalogue your collection and keep track of all the works and their values. In the event of an unexpected death, your art legacy team and family will be able to account for all of the work in your collection. More importantly your team will work to keep the taxman as far away from your art collection as legally possible.
If you have or are planning to build a collection, our webinar Art Legacy Planning – Life is Long. Art is Longer is worth the watch. Watch Now!
Matt Beasant is a self-taught Canadian artist and experienced writer, born and raised in Northwestern Ontario. Represented by established Canadian Galleries, Matt has exhibited at the Artist Project Contemporary Art Fair and the Toronto Outdoor Art Exhibition in 2016. His work is characterized by crisp lines and bold gradients which are applied by hand using many thin layers of paint –...