Art collectors in Florida might delay decisions about who will get their holdings when they die. They might have trouble identifying appropriate heirs or even thinking about giving away their art. Collectors prefer to focus on acquisition instead of distribution. Estate plans that fail to address art collections, however, could impose hefty taxes on heirs or lead to disputes among relatives. Potential solutions require careful documentation of art ownership and the exploration of options like giving to charity, shifting ownership to a corporate entity or placing the collection within a trust.
Older works of art have a greater chance of producing questions about ownership as do pieces that have changed hands many times. To establish legitimate ownership, collectors need to assemble bills of sale, certificates of authenticity and insurance records.
Once ownership documents have been organized, collectors should determine a system for transferring the collection that controls estate taxes. People could set up a corporate entity to serve as an owner, which could make the probate process easier and eliminate the need to retitle the assets.
A person who wishes to create an estate plan that includes valuable collectibles or other assets could talk to an attorney about the tax implications. After studying the client’s specific financial situation and goals, an attorney could suggest trusts or other vehicles to address the tax implications of bequeathing art directly to individuals.The establishment of market values by an appraiser could be essential to determining the best approaches for limiting taxes. During discussions with an attorney, the owner might gain insights about the benefits of granting a collection to a charity as part of an overall plan to transfer wealth and protect heirs from high taxes.