Back

Art News

 

Collection Tips

 

Introduction:

“How objects are handed on, is all about story-telling. I am giving you this because I love you. Or because it was given to me. Because I bought it somewhere special. Because you will care for it. Because it will complicate your life. Because it will make someone else envious. There is not easy story in legacy. “

At a recent conference in London, organised by ICRA (International Catalogue Raisonné Association,  https://icra.art/news/icra-celebrates-fourth-annual-conference-success), the British artist, master potter and author Edmund de Waal started his keynote lecture by reading the above quote from the introduction to his book, The Hare with Amber Eyes: A Hidden Inheritance (2010).

Here, de Waal does not talk about his own work, but about a collection of Japanese Netsuke he inherited, and which has subsequently found a home on permanent loan in the Jewish Museum in Vienna. De Waal states about this own legacy planning: “The decision to place the netsuke on loan allows them to tell the story of migration, identity and exile to a new audience”. (https://www.edmunddewaal.com/news/netsuke-collection)

This brief story, which unfolds the story of a whole family and its histories in the 19th and 20th Century as explored by de Wall in his first book, summarises both the pain but also the pleasure when thinking about an art collection’s legacy: How does one deal with the complicated question of what happens to one’s art collection when one can’t control its fate anymore? And how can we plan for it?

 

Tips for successful legacy planning:

There are several ways to think about estate planning and different routes to take. We will first provide a few of the most common options, before talking about some of the key points to consider whatever route you choose.

The most important element is to think about estate planning early enough, if you want to ensure there is some control you can exercise about the future of your collection. And to give it time and consideration. There are different ways and legal options in order to pass a collection on – whole or in its parts:

 

1. Deaccessioning: while it might be always a good idea to review your collection and sell art works that don’t fit your interest anymore, some collectors might consider selling their whole collection in one go to liquidate their assets during their lifetime. However, as Dr Loretta Würtenberger, expert in artist estates (http://www.artists-estates.com/de/institut/) points out: “A collection is a living corpus, it is based around the eye and the soul of the collector. It is far more than the sum of individual works, they enter into a unique dialogue, based on the taste of the collector. Sometimes I am astonished how quickly collections are dispersed after a collector’s passing.”
 

2. Gifting: It might be a good idea to gift works to family members, institutions, or any other beneficiary during your lifetime. This might be for personal or philanthropic reasons but can also include tax benefits. Gifting or donating art works, maybe in discussion with your family or respective institutions might even become a fulfilling initiative. Furthermore, it might avoid high tax liabilities for the heirs. In the US, charitable donations can be helpful in reducing one’s tax burden: 92 Percent of the collection of the Metropolitan Museum of Art in New York come from donations from private collectors. However, different countries have very different laws, and it pays off to engage professional advice to discuss these matters in detail. Gifting to institutions also is a complicated process and might take years to negotiate, so do ensure you start the process as early as possible.
 

The most important conversation to have is with one’s heirs and to ask children or other beneficiaries if they want the collection. It’s not only ownership which is a responsibility but the care that goes into it, which demands resources, in regards to finances, time and commitment, but also emotions. Children have the right to say, I do not want this.” (Dr.  Loretta Würtenberger)
 

3. Moving a collection into a foundation or trust: if you want yourself or your heirs to have some control still over the collection as a whole it might be an idea to set up a foundation or trust to govern it. A famous example for such a legacy choice is the collection of Don and Doris Fisher, founders of American clothing brand GAP, who set up a foundation to manage the loan of their collection to be displayed in a special wing of SFMOMA (https://www.nytimes.com/2010/06/06/arts/design/06fisher.html). Different options might be available depending on the size, remit, and destination of the collection and each country probably has their own star examples of both successful and unsuccessful relationships between formerly private collections and institutions.

 

If you want to ensure that any of the above decisions are conducted in the best way, consider the following recommendations:

1. Be clear about your priorities and main goals in planning your estate. Do you want to divide your collection between family members or keep it together? Do you want to raise cash? Do you want to keep your name as a collector alive? Do you want to give something to your hometown or country? A clear list of aims can go a long way not to lose sight of your main objectives which should guide you in your planning. Do not believe it will sort itself. Many estate collections come up at auction because the heirs obviously didn’t agree on how to proceed, and an auction sale seemed the only way out to resolve conflict. Collecting is a very personal endeavour and as much as children might not share their parents taste in fashion or furniture, the same might apply to art.
 

2. Consult a professional solicitor, estate planner or tax advisor if you want to ensure that you achieve the best outcome for your collection and beneficiaries. Regulations, tax systems, laws and procedures are complex in many countries, and it is advisable to have professional support, especially such support where you are the main client and there is no conflict of interest with other parties. If you for example work with a private dealer or an auction houses as advisor, they might want to sell your collection above all, rather than ensuring you get the best outcome to suit your needs.
 

3. “One size fit all” might not be the best approach to determine the future of your collection. Some pieces might want to stay with the family, others might do best donated to an institution, others might fare well at auction, while some might require patient placement by a private dealer. While auctions often advertise single owner sales, be cautious what the best approach for your collection might be.  
 

4. Whatever steps you take, ensure you know the current value of your collection and the individual pieces within it. Markets can change drastically and not every carpet, old master painting or ceramic object might still be worth what you paid for it. Be realistic.

 

Summary

Reflecting on passing on an art collection might not be an easy task. However, owning art brings responsibilities with it, not only for future heirs but also for the art itself. We are custodians of objects meant to exist for many years once we are gone, and so it is important to ensure that there are kept in the best way possible and with the least amount of burden for our own families or heirs.

Keeping a collection well managed and putting planning in place for its future can ensure that not only the collection but also the collector build a lasting legacy. For the family and beyond.

 

Dr Würtenberger gives one final tip:

“Whatever a collector or the heirs decide to do, I would always recommend to consider a publication of the collection, as it reflects the soul of the collector which has shaped the collection, maybe over many years, and that’s worth commemorating.”

 

 

Useful online resources:

 

https://itsartlaw.org/estate-planning-for-art-collectors/

https://www.artbusinessinfo.com/estate-planning-for-art-collectors.html

https://www.privatebank.bankofamerica.com/articles/your-art-collection-and-legacy-planning.html

https://www.investec.com/en_za/focus/investec-cape-town-art-fair/leaving-art-as-a-legacy.html

https://womeninfamilybusiness.org/building-art-collections-as-a-family-legacy/

 

 

 

 

 

 

  1. Man writing on paper

Personnel information

ARTE Generali sets personnel course for further international growth
 

  • Iris Handke takes responsibility for expanding into new markets as Head of International Business Development

 

  • Julia Ries takes responsibility for the German market as Head of ARTE Generali Germany

 

  • Anna Maria Amato becomes Head of International Underwriting and Exhibition

 

Munich, 13/12/2022 - Following the successful launch of ARTE Generali in 2019 and the expansion of the business unit in France, Italy, United Arab Emirates and Austria, the Specialist for Art Insurance of the Generali Group announces the following personnel changes to accelerate its business development:

After successfully launching ARTE Generali in Germany and Austria and her many years of international experience, Iris Handke (45) becomes Head of International Business Development. The aim is to expand ARTE Generali's business geographically to new countries in Europe, North America and Asia.

Julia Ries (50) succeeds Iris Handke and becomes Head of ARTE Generali Germany. Julia Ries is an experienced manager and comes from the ERGO Group. There she successfully built up the international Fine Art & Specialty business. She has many years of experience in business development as well as strength in sales, which she will bring to the expansion of the cooperation with brokers and the specialised financial advisors of the distribution partner of Deutsche Vermögensberatung.

Anna Maria Amato is Head of International Underwriting and Exhibition at ARTE Generali, responsible for major risks, exhibitions and institutions. In addition to her expertise in the art market, she has more than 20 years' experience in the international art insurance market with Lloyd's, Lockton and WTW. She will be based in London, working across Europe and reporting to Italo Carli.
 

 

ARTE GENERALI

Inspired by almost 200 years of passion for art, ARTE Generali offers specialized insurances for art collections, valuables, household and property portfolio. Our personalized solutions are supported by cutting-edge services and digital tools to help and reward art owners. The teams of ARTE Generali GmbH have a solid background in Underwriting Insurance Fine ART risks and managing related claims with senior experts who have more than 20 years of experience in the specific sector.

New ARTE Generali App version released!

ARTE Generali has partnered with Wondeur to bring innovation to the art sector through accurate and unbiased analysis of the market through AI-technology. WATCH THE VIDEO to learn how to use the My Art Market Trends tool and gain access to exclusive in-depth analysis on 95% of contemporary artists in the market.

 How does My Art Market Trends work?   

Just type in the name of your favorite post-war or contemporary artist, and you will instantly receive in-depth AI insights on the following data in real time: Artist growth, benchmark value, liquidity value, recent auction transactions, recent dealer transactions, risk of change in value, museum support and future outlook.   

Who can use the App?

The App can be downloaded for free by everyone. Its features are unlimited for ARTE Generali clients. Other users are given access to a trial version that provides them with an active account for 180 days and 50 free artist searches. When the user reaches 50/50 searches,to continue using this function he or she can contact ARTE Generali at: arte@generali.de

 

All features of the App:

  • NEW My Art Market Trends: Learn more about the latest market developments of contemporary artists 
  • NEW My Evaluation: receive an expert evaluation of your artwork
  • My Collection: create a virtual collection of your existing artwork
  • My Concierge: request professional concierge services for your art (for ARTE Generali clients)
  • My Documents: upload and access all your art and insurance documents in one place (for ARTE Generali clients)
  • My Claims: submit claims through the App (currently available for German accounts only)

 

.

Introduction:

Art has no extrinsic value, it can’t be used, and as most work of art are unique, we don’t know how much they are worth. When we buy the works we only know how much we pay when we bought them, but how does the price change a few months, years, or even decades later? Or what if you inherited a work that has been in your family for ages, and no one possesses any relevant documentation? It is easy to find out the daily rates of a troy ounce of gold as one gold bar is the same as another gold bar, but it is not as easy with art. Unlike commodities, there are no regulated global exchange markets for art. Furthermore, every work of art is different from another and many contextual factors such as its condition, provenance, subject matter, colours, etc. determine an object’s value. So how does one determine the financial value of a work of art?

First, it is important to acknowledge that there are many reasons why someone might want to know the value of a collection or individual work. Getting a work of art appraised, i.e, valued, does not necessarily mean someone is looking to sell it. Keeping the value of your collection up-to-date should be an ongoing element of collection care.

 

The most important reasons for valuing a collection are:

1. Establishing accurate insurance valuations, so that you can be sure that if the works get damaged, you have adequate.

2. You might need to know how large your assets fixed in art are- and if you are able to use them as collateral for a loan.

3. Your family assets might need to be split due to a divorce, death, or disaster (bankruptcy, for example) and you need to know – often quickly – what you have. The famous three Ds still make up the reason why most works of art come up at auction.

4. You might want to lend a work to an exhibition and need to be sure that the institution you’re loaning it to insures it for the right value.

5. You might need to pay taxes if you inherit a collection. These should be based on accurate financial values.

While this might sound straightforward and easy, valuations and appraisals can be a nightmare. As with many other elements of the art market, valuation services are not always regulated, and the laws governing different countries vary widely. For this reason, a collector needs to conduct thorough research and work with trusted people, to feel confident regarding the services provided.

What are the different ways to go about getting valuations and appraisals?

 

Getting your collection appraised

1. It is important to understand the difference between the term valuation and appraisal. A valuation is not as thorough as an appraisal. A buyer could go back to the gallery or auction house they bought their work from and inquire about the current market value of a similar piece by the same artist. They might give you a ballpark figure, probably without putting it in writing. This might give the owner a good idea but nothing more. A valuation is usually not legally binding and often based on opinions. However, an appraisal,  is a clearly defined process in which an expert appraises works of art independently and without interest and is paid for their services. According to the American “Uniform Standards of Professional Appraisal Practice” (USPAP), an appraiser is someone who “is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.” A professional appraisal should come with an extensive written report which includes cataloguing details, provenance notes, condition, and the appropriate value of the object.

2. There are three types of values associated with appraisals: Fair market value gives an opinion on what the work would sell for at a given moment between fully informed parties. Retail replacement values can be higher and are used mainly for insurance purposes – what would it cost to replace such an artwork? Marketable cash value is the Fair market value minus any expenses such as selling fees. This value should be used when assets need to be divided up as transaction costs can be high.

3. Unless someone wishes to sell a work at auction and therefore is interested in getting competitive valuations from different auction houses, it is advisable to work with an independent appraiser rather than having auction houses value the works. An auction house’s interest is always in consigning and selling works, and while most of them offer valuation services, there might also be an interested party. And of course, their valuations are based on ranges of estimates and don’t offer more assured valuations. Usually, countrywide appraiser associations have their own lists of independent appraisers, so it is advisable to go with someone who is registered with a trusted industry body.

4. Art values can remain fairly stable, but they can also change quickly overnight. It depends of course on market activity as much as on other circumstances, for example if an artist is showing in a major retrospective, has been taken up by a major gallery, has died, and so on. These events might drive prices up, but others of course can also cause prices to go down, and even collapse. So, ensure you keep your valuations updated regularly, for instance every 1 to 3 years, depending on the type of the collection and your personal need to know.

5. If you want to go out on your own, there are price databases you can subscribe to (against a fee), such as Artprice (https://www.artprice.com/) and Artnet (https://www.artnet.com/price-database/). If you have an editioned work which is fairly known or a very typical work by a well-known artist, then you might be able to find current values (based on auction prices) yourself. However, this doesn’t give you a precise valuation of your work as other factors such as condition, location, edition number, provenance etc. play a major role in accurately determining the value of a work, as mentioned above.

 

Summary

Valuations are not only an important part of estate planning, but are also helpful in protecting your art investments. They give you confidence in your buying activities and monitoring your collection’s value should be a regular part of your overall financial planning, even if you do not plan on selling. As in many areas of the art market, trust is key when asking someone to determine the value of your collection. Whichever route you take, make sure you feel assured the outcome does benefit you and not the valuer. Being kept informed about the developments in the art market regularly is probably a good way to get an overall feeling about the ups and downs of value in general, and about your collection in particular.

 

 

Further Reading:

Mary Rozell: The Art Collector’s Handbook. The definitive Guide to Acquiring and Owning Art. Lund Humphries London 2020

A recent, very extensive guide with lots of resources for all elements around collecting, including legal and financial elements, and an extensive chapter on appraisals.

Garrett Wendell D and Appraisers Association of America. 2013. Appraising Art: The Definitive Guide to Appraising the Fine and Decorative Arts. New York NY: Appraisers Association of America.

A very detailed guide to appraisals with focus on the US American market.

https://www.christies.com/features/how-is-an-artwork-appraised-10033-1.aspx

This article gives a good overview of the range of expertise needed to value different types of art objects.

https://observer.com/2019/05/winston-art-group-elizabeth-von-habsburg-interview/

Experienced Art Advisor Elizabeth von Habsburg on appraisals and investment