A composite of studies of trust and estate attorneys, trust officers, and financial planners revealed that:
- Fewer than 10% of plans for their clients addressed art, antiques, and collectibles
- Fewer than 10% used art assets in intergenerational planning
- Fewer than 15% used art assets in philanthropic planning
- Fewer than 5% realize that the true cost of selling a million dollar painting at auction is approximately 35%
- Fewer than 1% used the services of an art succession planning specialist
So what’s the problem? The problem is that collectors and their families can lose, at minimum, as much as 75% in the value of the collection if upon death items are sold through traditional means.
And the collections of which we write are not all Rembrandts, Monets, and Picassos. The collection could consist of antique firearms, Western American art, African ritual masks, textiles, folk art, stamps and coins, classic cars or just about anything else!
In 2009 art was estimated to be a $40 Billion industry1.. There are approximately 17,500 museums, 25,000 galleries, 25,000 historical societies, and 50,000 art shows in the United States alone. Business Week reported that approximately 1/3 of families with a net worth in excess of $10 million are art collectors. And those personal collections, valued at $4 – $6 Trillion nationally, will be transferred to others over the next two generations. Recent trends show the dramatic increase to much higher possibilities.3 Those numbers are stunning, but what’s even more surprising is that the great majority of these collectors haven’t given a thought to that succession process.
If you are not planning for your client’s most prized possessions or favorite hobbies, their beneficiaries may be the ones screaming all the way to the IRS.
Enjoy our white paper.