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Tuesday, April 5, 2016

De-Cluttering Your Life: Artwork, Collectibles and Jewelry, Part Three

This is the third and final article in a series about how to simplify your estate.  This article covers ways to dispose of special artwork, collections, and jewelry.

Fine artwork, jewelry, and collections pose a particularly thorny issue for successor trustees and executors that are in charge of administering a trust or probate estate.  There are a number of questions you should consider when deciding how to handle this type of property.

What is the Artwork or Collection Worth? 

People tend to over value their fine artwork, collections and jewelry.  The estate value of such property tends to be much less than the retail value or the insurance or replacement value.  Typically auction companies and consignment shops charge commissions of up to 50% to sell fine art, collections, and jewelry.  In addition, it doesn’t seem fair to require an executor to sell artwork or collections piece by piece on Craigslist, eBay, or some other do-it-yourself auction site. 

What Does it Cost to Maintain?

There is often a cost to keeping and maintaining large collections, including artwork.  First, the cost of maintaining the space where the artwork is displayed or where collections are securely stored.  Second, the cost of insurance, maintenance, and security of the property.  Third, there may be estate taxes or property taxes that need to be paid to maintain the property in one collection.

Are You Sentimentally Attached to the Artwork or Collection?

Clients often develop a strong emotional attachment to their collections and hope that it means as much to others as it does to them.  They also hope to keep the property intact as one collection after they pass away.  But in reality, family members rarely have the space, financial ability, or passion to keep or store such property. 

Is a Museum, University or Charity Interested in the Collection?

Finally, museums, universities, or other charities are always interested in donations for valuable property, however, they have policies that can limit their ability to take collections that do not conform to their charitable mission or purpose.   Moreover, sometimes charities will actually sell the artwork sooner or later to raise money for other charitable purposes.  Donors who expected their college or university to keep and display valuable artwork long into the future might be surprised if they learned that it was sold to a private collection.

Can the Donation be Made While You Are Alive?

If you are able to complete the donation of your artwork or collections while you are alive, you will be taking a huge burden off of your successor trustee or executor.

How Can You Plan Ahead?

We asked Monica Shah, Director of Collections at the Anchorage Museum the best way to plan for your artwork and collectibles.  “We love it when people think of the museum as a possible home for art that they have enjoyed and cherished,” she said.  “While the museum can’t accept everything, we have been extremely fortunate to receive donations that are wonderful additions to our growing permanent collection.  It is a privilege for us to help people who want to leave a legacy with their art.”

Ms. Shah suggested that art donors consider notifying the charity while you are still alive to start the donation process.  This will allow you and the charity to work out any special details or problems that might arise. 

If you are interested in starting a conversation about donating artwork or collectibles to the Anchorage Museum, you can contact Julie Varee at jvaree@anchoragemuseum.com or call 907-929-9213.

Five Things You Need To Know When Donating Artwork and Collectibles.

If you have artwork or collections that you would like to donate to charity, here are the Top 5 things that the Anchorage Museum thinks that you need to know:

1. Rather than including a donation in your will without notifying the museum, consider starting the process when you are updating your estate plan. This will allow you to learn the mission of the charity and how your donation would be handled.

2. Most museums have a collections committee made up of staff and volunteers who follow policies regarding donations of artwork and collectibles.

3. As with most non-profit organizations, museums seek donations of artwork with minimal restrictions from the donor which allows more flexibility and creativity about how the artwork is displayed.

4. It’s a good idea to secure a written gift agreement regarding your donations to avoid misunderstanding between your successor trustee or executor and museum staff.

5. At the Anchorage Museum, a collections committee and curatorial staff will review a number of questions when it is offered a donation of art:

  • Does the art help fulfill the Anchorage Museum’s mission?

  • Will the museum be able to care for, exhibit, and educate about the art?

  • Are there any undue restrictions on the use or display of the art?





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Foley, Foley & Pearson, P.C. is a full service Estate Planning law firm. We offer our clients services in Probate Administration, Estate Taxes, Wills, Trusts, Disability and Incapacity Planning, Estate Administration, Corporate and Business Law, Business Succession Planning, and Planned Giving and Charitable Bequests.