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Estate planning basics for New York art collectors

Wealthy art collectors in New York are usually very passionate about their art, and art aficionados who can afford to amass impressive collections aren't too concerned about disposing of any of their prized possessions. This usually means that when an affluent art enthusiast passes away, they have a sizable stash of valuable works of art. Unfortunately, another thing that wealthy art collectors have in common is a lack of proper estate planning.

If estate planning wasn't a priority during an art collector's life, the first major issue for heirs will likely be significant estate taxes. There may also be an unfair division of art that results in squabbles among surviving family members or even lengthy and costly legal battles. With a well-structured estate plan, however, art can be left to designated loved ones or donated directly to charity or a specific museum in a way that's as tax-efficient as possible.

Some wealthy art collectors end up putting off estate plans if they are unable to decide what they want done with their collections after their death. One option is to transfer ownership to corporate entities to simplify probate by eliminating the need to retitle art. It can also be wise for art collectors to maintain files with records of ownership, especially with older pieces that may not have been obtained directly from the artist. It can be equally beneficial for collectors to keep certificates of authenticity, bills of sale, insurance records and other related documents in one convenient location.

A lawyer may help a wealthy art collector put together a personalized estate plan by helping them understand their options. This often means encouraging a dedicated art collector to discuss estate plans with their family members to avoid surprises when it comes time to divide their assorted art assets. An entire collection or specific pieces can be left to certain people in a will. A lawyer might suggest putting an entire collection into an LLC. With an LLC, various pieces could still be left to multiple individuals. One or more managers can also be selected to control a wealthy collector's art.

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