Some art collectors in Georgia might not know who they want to leave their favorite paintings and sculptures to. This may lead to procrastination when it comes to estate planning. Others might even completely forget to address the future of an art collection. However, if a collector dies without making a plan, family members could end up paying high taxes on valuable art. Furthermore, heirs could end up in litigation if they are not happy with how the art is distributed.
With effective planning, however, these issues may be avoided. Placing a collection in the ownership of a corporate entity can make probate easier since the artwork will not have to be retitled. The art might also be placed in a trust. A trust creator may choose to pass it to individuals or to a charity.
Just as important as including the artwork in an estate plan is having proper documentation of the artwork to reduce the likelihood of questions about its provenance. This should include insurance information, bills of sale and documents of authenticity. A paper trail becomes more important the older the piece of artwork is and the more distance there is from the owner and the artist.
Another important step for art collectors is talking to family members about the estate plan. This can help ensure that they understand why certain choices have been made. There might also be certain pieces of art or other assets that some heirs want, and a family meeting will give them the opportunity to express that. The estate plan should also be reviewed regularly. Changes in family or tax law can all mean the plan should be revised. An attorney could assist a client in creating an estate plan and deciding what tools, such as trusts, would be most useful.
