Collecting paintings, sculptures and other pieces of fine art can bring residents of Maryland much satisfaction and reflect their appreciation of the artists' talents. However, it is important to consider the financial side of an art collection, particularly when it comes to estate planning.
What will happen to a person's art collection once that person passes away? When it comes to a person's heirs, some of them may appreciate the collection in much the same way as the owner of the collection does, but this is not always the case. In addition, many art collectors may hold the belief that they have a duty to see that the art is made available to the public after their death. The value of an art collection can differ based on whether the owner is keeping it in the family through estate planning, or whether the owner is going to bestow the piece to a museum. It can be difficult to put a price on a unique piece of art, which may not have a comparable piece to compare its value to. Obtaining an independent appraisal may help.
In addition, passing the art down to family members, either through a gift or in an estate plan, can also have tax consequences. One alternative, depending on the circumstances, may be for the owner of the art to sell it to heirs. Another alternative for some art collectors may be to create a trust for the artwork, or transfer the artwork to a corporation and then lease the artwork back.
That being said, all of these options are subject to state and federal law, so it is important to understand how these types of transactions are handled. For this reason, art collectors may want to get more information about the available options before they determine how to handle the transfer of their art collections after their death.