For some of the people living in Tennessee, collecting art is a passion, not just a hobby. Accordingly, these people spend a considerable amount of time searching for beautiful works of art to add them to their collection. However, plenty of art collectors don’t take the time to think of what would happen to their precious art collection when they pass away.
Art collectors who don’t address what they want done with their collection upon their passing risk subjecting their family to extra costs. This is in part due to the fact that the family might have to give the IRS higher estate taxes. Another reason is that an unclear estate plan can lead to conflict within a family and ensuing litigation.
Consequently, art collectors are advised to specify in their estate plan what should happen to their art collection, be it getting passed to other individuals or being donated to charity. In the end, a clear estate plan means that the art gets passed on in a tax efficient manner.
However, it’s not enough for art collectors to have a clear estate plan; they also need to go a few extra steps. For one thing, several art collectors are advised to build files of ownership for their art. In such a manner, the art owners can ensure that no disputes regarding provenance will arise once it’s time for the art to be transferred. These files, which include certificates of authenticity, bills of sale, and insurance records, are all the more pertinent when the artwork is old or when there is a large distance between the art collector and the artist.
The bottom line is that art collectors stand to gain from establishing a clear estate plan that protects the ones they love. Accordingly, they might benefit from reaching out to an experienced attorney who may be able to help them draw this estate plan and ensure its execution when the time comes.