Practical Planning for Art Collectors and Their Advisors, Part 1 The Ancillaries
SUMMER IS A GOOD TIME TO TAKE CARE OF THE CHURLY CHORES THAT WE ARE TOO BUSY TO ADDRESS THE REST OF THE YEAR. REPAINTING A BEDROOM, GIVING AWAY THINGS THAT ARE UNUSED OR NEVER WORN, AND ON A MORE SERIOUS NOTE, HANDLING THE PART OF ART COLLECTING THAT DOESN’T HAVE THE SAME THRILL AS THE APPRECIATION OF A WORK ACQUIRED SOME TIME AGO THAT CONTINUES TO BRING JOY OR THE EXCITEMENT OF THE MOST RECENT ADDITION.
THE MORE YOU COLLECT AND THE MORE VALUABLE THE HOLDINGS, HOWEVER, THE MORE IMPORTANT IS PLANNING FOR THE FUTURE OF YOUR ART COLLECTION.
TODAY, WE HAVE THE HONOR OF WELCOMING RAMSAY SLUGG TO THE LRFA BLOG TO DISCUSS ALL THE WAYS, ADVANTAGES AND DISADVANTAGES, OF THE ASSET MANAGEMENT OF YOUR ART COLLECTION.
Ramsay H. Slugg is a managing director and member of the National Wealth Planning Strategies group at U.S. Trust, Bank of America Private Wealth Management. He is a past chair of the Trust and Estate Division’s Charitable Planning and Organizations Group and current co-chair of the Art and Collectibles Committee of the Income and Transfer Tax Planning Group. He is the author of Handbook of Practical Planning for Art Collectors and Their Advisors, published by the Section.
Art is an asset of passion. Coupled with its unique financial characteristics, this makes art perhaps the most difficult asset to incorporate into an overall estate and financial plan.
This is the first of a two-part article based on the author’s book, Handbook of Practical Planning for Art Collectors and Their Advisors. Part 1 focuses on “The Ancillaries,” those matters that the serious collector should take into consideration regardless of the ultimate disposition of the collection. Part 2 will focus on planning for the ultimate disposition of the collection. Although this article focuses on art, most of the discussion applies to the broader world of collectibles, including coins, stamps, antiques, and collectible firearms.
For many collectors, not only is their art among the most valuable assets that they own, but also they are more passionate about it than they are about their stocks, bonds, real estate, and sometimes even the family business. They have spent considerable time, energy, and resources to develop their own art expertise and have built a collection according to their personal aesthetic tastes. Collecting art is far more than a weekend hobby or merely an activity of home decoration; collecting has become a passion.
Although collectors probably realize that there will be some sort of disposition of their art, they most often are focused on the passion of collecting, not disposing. When they do consider the ultimate disposition of their collection, they are often overwhelmed by the seemingly endless number of choices of what to do. When faced with so many perceived choices, human nature takes over and often results in the selection of the default planning option—doing nothing. And often, a collector’s advisor is not aware of the extent or value of his client’s collection, and planning consists of a simple, standard bequest of tangible personal property to the surviving spouse, or the children or other heirs, to divvy up as they agree.
NEXT WEEK, POST 2 OF THIS ARTICLE! START BY READING THIS AND THEN TAKE ACTION.
Published in Probate and Property, Volume 30, Number 2, ©2016 by the American Bar Association.