In an interview for Northern Trust, Wealth Advisor Stacy Singer describes the nuanced and often challenging path to estate resolution when valuable, one-of-a-kind objects are passed down to heirs. She offers her four strategies for navigating wealth transfer involving valuable fine art and collectible objects, which align directly with our holistic approach to collection management.
Here, we drill down the four key elements of this planning strategy.
Keep Current Appraisals
Experts recommend updates every 3-5 years.
Pay attention to the purpose for which the appraisal was created. The purpose of the appraisal drives the valuation reported. Tax and insurance valuations are each based on different market conditions, therefore based on different data sets. The greater the investment in fine art and valuables the more important it is to be aware of the value regularly - for both tax planning and insurance purposes.
Maintain Adequate Insurance
What does "adequate" mean to you? Have an honest conversation about risk tolerance. Ask yourself:
You'll want an appropriate overall tally along with a home inventory document for your homeowner's policy. Certain specialty items - like art, wine, classic cars, jewelry, silver, etc. - you will want to schedule and most of the time you'll need an appraisal report document detailing what it is you wish to schedule on a policy and the replacement value of the object that is used to arrive at the total policy amount.
Plan for Passing Down the Art
It's only practical to plan the future of your collection. It's a legacy that outlives the collector.
Actively Engage with Advisors
Managing a valuable collection is nuanced with art-specific considerations as well as legal and tax implications and its wise to have an advisor in each of these areas and meet with them annually to review the art portfolio along with other investments.
If you or your clients wish to learn more about our art advisory services and tailored collection management services, contact us to learn more about how we can assist you in growing your art portfolio and enjoying fascinating objects.