Designing An Estate Plan For Your Art Collection
Estate planning for a person who owns a large collection of art can be a process of balancing an emotional need to preserve the collection with the financial reality of the cost to the beneficiaries to keep the collection intact. If a person has spent a lifetime creating a collection, having to come up with a plan on how to handle the collection when he dies requires careful consideration.
One of the first things that a collector must do in developing a plan for the disposition of the collection upon his death is decide how important it is to him to keep the collection intact. If the collector is happy to enjoy the collection in life and would not be tormented by the thought of the collection being separated after his death, then bequeathing heirs specific pieces in a will may be the easiest route.
If the collector would prefer the collection to remain together, he can leave the entire collection to a person he trusts to follow this wish. The collector can leave instructions when gifting this collection to the person who is likely to keep it intact detailing the collectors wish for the collection. An institution, especially a charitable one, is more likely to receive a gift of a collection and abide by the wishes of the collector than an individual.
If giving the collection to an institution, the collector can make the gift conditioned on the institution keeping the collection intact. The collector can provide an alternate disposition for the collection if the institution tries to sell some pieces of the collection. Not many institutions like to accept conditional gifts, especially if the gift is not of a certain value. It is important to approach an institution before writing them into the will in order to gauge its level of interest in receiving the collection under any circumstances.
A collector who cannot find an institution that is willing to take on a conditional gift may decide to build his own museum to house the collection. This should be considered as a last resort in many cases because of the startup and continued cost of running a museum. If the collector has the means to support the museum through an endowment or trust that allows the museum to operate, then it may be easier to set up the museum.
The collector may also consider the option of setting up a limited liability company that would hold title to the pieces in the collection. The collection could then be loaned out to museums and galleries with the fees collected from the loans distributed to the collector’s heirs. Under this option, the collector’s pieces would be kept together, there would be income generated for the heirs, and the costs of storage and security for the collection would be somewhat reduced.
Let Us Help You
Making a plan for how your collection is handled after your death is a big step. For assistance in formulating a solid estate plan that includes the disposition of your art collection, contact an experienced estate planning attorney in The Villages, Florida by calling the Millhorn Elder Law Planning Group.