💡COLLECTION TIPS: Legacy Planning

 

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/