Wealthy people in Connecticut often enjoy collecting art, buying it for personal and aesthetic reasons while also enjoying its appreciation in value. While some of these collections may be invaluable, many collectors fail to properly plan for how they will be passed on to beneficiaries.
When wealthy art collectors fail to properly plan for how their collections will be handled, their families might be forced to pay higher taxes. The art collections may also be divided in a manner that is considered to be unfair by one or more of the heirs, leading to family conflict and litigation.
Art collectors should make certain that their collections are clearly described in their estate plans and divided according to their wishes. When estate holders plan correctly, their art collections can be passed to others in a tax-efficient manner. Art collectors should also build files that include insurance records, bills of sale and certificates of authenticity to avoid questions of provenance. Furthermore, it’s important to have a proper valuation done of their collections so that they can divide everything in a fair manner. If collectors want to keep their collections together, they might create corporate entities to own the collections so that the probate process can be simpler.
Proper estate planning is important for people at all income levels. However, people who are fortunate enough to have amassed great art collections and other complex asset classes may especially benefit by consulting with estate planning lawyers. An attorney could help a client determine the most efficient way to pass down assets.