If you’re an art enthusiast or a collector, you may purchase art for one of two reasons: You’re either buying art that you love, or you’re buying art that you think will see an upward shift in value over time, looking at it as an investment. Sometimes, these two things can be done at once.
No matter why you bought it, though, you should know that having a lot of art, or some very expensive pieces, can make estate planning in New York that much more complicated.
Sometimes, the complications are of a more personal nature. Your children may not care about your art collection, or they may actively dislike the type of art you prefer. If you have a very nice collection, though, you may want it all to be kept together so that the public can appreciate it. You have to decide if you want to leave it up to your children or if you want to set aside funds—perhaps in a trust—so that your collection can be maintained by someone else after you pass away.
When transferring art to your children, there could also be tax ramifications. This can be an issue when children don’t like the art, as they may not want to be taxed on a valuable piece that they’re not interested in keeping anyway.
Plus, just figuring out how much the art is really worth can be hard. An official appraiser may need to work with you to get a real number that is recognized by the art community. This could be vastly different—lower or higher—than what you paid or what you feel the art should be worth.
If you’re an art collector, make sure you consider all of these things when deciding what legal steps you need to take.
Source: The New York Times, “Estate Planning Can Get Tricky When Art Is Concerned,” Conrad de Aenlle, Oct. 01, 2015
