Sunday, March 9, 2014
Michael Campbell (2014 J.D. Candidate, Texas Tech University School of Law) recently published an article entitled, Art and Antique Estates: A Guide to Planning for Life and Death, 6 Est. Plan. & Cmty. Prop. L.J. 83 (Fall 2013). Provided below is the introduction to his article:
Whether it is fine art, antique furniture, classic movie posters, or baseball cards, nearly everyone collects something. But what does this mean in terms of estate planning? When art and collectables are not properly handled, the potential for loss is proliferated. Many collectors do not view themselves as collectors and most estate planners are not particularly well versed in art succession planning. Often times, for lack of better classification, unsuspecting planners simply lump such collections into the “personal effects” category. Art is a special asset and includes many different legal aspects: title, valuation, provenance, restoration, insurance, taxes, and several others. In addition, art tends to hold a special place in the heart of its owner, making planning for art succession an even more important and more personal issue than planning for mere stocks and bonds.
This comment will explore three broad topics: the current art market; art as an investment while a client is still living; and estate planning for a client’s art estate. Part II will provide an overview of the art market as of 2011, espousing the viability of the market as a prudent investment vehicle. This section will also address the issues associated with the current lack of art-specific estate planning. Specifically, Part II will address common fallacies that estate planning practitioners are likely to run into. Part III will look at the options available to clients who wish to maximize the value of their collections for benefits while they are still living. However, much of this discussion will carry over to Part IV. Part IV will set out a framework to adequately plan for succession of a client’s art estate. This section will address the basic taxation issues that a client may face, but it will not provide any specific calculations, as the tax code is ever in flux, tending to change year by year.