Artworks need special estate planning consideration

On Behalf of | Feb 15, 2021 | Estate Planning

Dividing up cash and assets that easily convert to cash between your heirs isn’t that hard. Dividing up special items, like artwork, can be entirely different.

Whether you have a couple of paintings or an entire art collection forgetting about them when creating your estate plan will make things complicated when you die.

Leaving art to your family might not be the best idea

If you do not make specific arrangements for your artworks in your estate plan, they will typically pass to your family along with your other assets. However, that is not always ideal. Here are some reasons why:

  1. Your family may not have the means to preserve a piece: Artworks are susceptible to light, temperature and humidity. You may have your house climate-controlled to keep works safe. Those you would like to leave a piece to might not. Or they may have a young family, with kids and dogs bounding through the house who are likely to knock over ground-standing ceramics or sculptures.
  2. Your family might not place the same value on items as you: A piece may have great sentimental value for you. Yet, art is subjective. If your child or their partner do not feel the same about it, they might not display the work in their house.
  3. A collection may be worth more than its components: Splitting a collection or a series of pieces between your family might seem a fair way to handle things. However, it could significantly reduce the value as many collectors are willing to pay more for a complete set.

One option you could consider is selling the pieces and passing the money to your family instead. Remember that any art you sell will be subject to capital gains tax. Any artworks you transfer on death will count toward the federal estate tax threshold. Strategic estate planning can help you preserve as much value as possible for the art you own.