Minnesota residents who collect valuable art can make provisions in their estate plan regarding their collections. However, many of them fail to properly plan for what should happen with the art after they die. With the proper planning, conflict and litigation between family members and high estate taxes can be avoided.
One of the reasons that art collectors fail to make proper plans is that they are unsure what to do with the art or to whom to leave it. This issue can resolved by placing the art into limited liability companies or corporations. Not only does this strategy resolve ownership issues, but it also streamlines the probate process by eliminating the necessity of having to retitle the art.
Proper planning entails more than just creating an estate plan, particularly if the art collections are valuable and meaningful. Records of ownership should be safeguarded to ensure that the provenance of the art is not challenged. Appropriate documents may include bills of sale, certificates of authenticity or insurance records. Doubts about provenance tend to be more likely the older the artwork is and the more separation there is between the artist and the collector.
Working with a qualified professional on an estate plan can help individuals with significant art ensure that their wealth is transferred to the intended persons or entities in the manner in which the collector wishes. It may also help mitigate taxes. An attorney with estate planning experience can advise clients about which types of estate planning tools may help them achieve their goals.