Wednesday, November 7, 2018
On November 1 at Bonhams in New York City, three experts in the field of trusts and estate planning discussed the various options available to clients regarding planning for art disposition, the need for appraisals and the importance of communicating one’s wishes with the next generation.
“Intentional planning is the most important issue to address with your clients,” Sherri Cohen, vice president and director of valuations, Trusts & Estates at Bonhams stated. Many clients also seem to overlook the big picture of disposing or transferring a collection. Many pieces may have monetary value but others may have emotional value, possibly due to knowing the artist that produced a piece or simply because the client has had that piece for decades.
Warren K. Racusin, a partner and chair of the trusts and estates group at Lowenstein Sandler LLP in New York City, noted that, “collectors are good with acquisitions but often make mistakes regarding the four methods of disposing their art.” Those method are selling, gifting, bequeathing, and donating to a charitable organization or charitable remainder trust. Appraisals are necessary to establish basis, no matter how the pieces are disposed of from the estate.
Communication within a family when it comes to art collections is vital, and lack of it is a prime cause of litigation. Parents must be transparent about their reasons for disposing of their art and ascertain their children’s preferences. If parents want to dispose of their art, the first question to the children should be: “Do you want this stuff?”
See Dawn S. Markowitz, Estate-Planning Strategies for Art and Collectibles Explained, Wealth Management, November 5, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.