Many Ohio residents are appreciative of the fine arts, and some have amassed an impressive collection of artwork over the years. How those assets are handled within estate planning can be complex and depends on a number of factors. For many collectors, hiring an advisor who specializes in art and estate planning can make it easier to create a plan that meets one’s goals.
The first thing that a collector has to consider is whether the collection should be handed down to one or more heirs or donated to a museum or organization. The tax ramifications for these options are very different and should be factored into the larger estate plan. If a loved one wants to receive part or all of the collection, it may be advisable to have that individual sit down and discuss the matter with the art advisor to discuss the tax burden that may accompany the inheritance.
One way to pass down wealth without incurring a sizeable tax burden is by means of a trust. This approach works for artwork in much the same way as with any other type of asset. The art is placed within the trust, and becomes the property of the trust itself. An essential benefit of placing art within a trust is that it shields the assets from loss due to jurisdictional matters. For example, if a piece of art is housed in another country at the time of the owner’s death, that asset could be subject to that country’s estate tax rules.
Including an art collection within estate planning can be a challenge, but Ohio collectors should know that there are options available to ease that process. One approach is to hire an art advisor to assess a collection and help create an approach that meets the needs and goals of the owner. A variety of choices are available, and having professional guidance can take a great deal of guesswork out of the process.
Source: The New York Times, “Estate Planning Can Get Tricky When Art Is Concerned“, Conrad De Aenlle, Oct. 1, 2015