Collectors can spend much of their lives amassing items that not only bring personal enjoyment, but may increase significantly in value over time. Whether its fine artwork, collectibles, memorabilia or rare objects, these are items that need to be regarded as important personal assets. Much like stocks and bonds, these tangible assets are an important component of a comprehensive estate plan.
However, this asset class is the most overlooked and, as a result, is not given the careful attention needed to help preserve value and ensure safekeeping for the long term.
Working with an expert team will ensure fine tangible assets will receive the deserved attention during their lifetime and beyond.
Identify and protect tangible assets Fine art management experts can assist individuals with identifying valuable items that should be evaluated to help preserve, and in some cases, maximize worth. Many people may not understand the true value of their fine art objects or the processes needed to protect them. In addition to identifying financially significant pieces, a trusted advisor can also provide counsel on the following areas:
- Preservation. Collectors should be knowledgeable about preservation and understand all options for restoration;
- Proper storage. This will extend the life and value of artwork by properly controlling climate, securing and keeping inventory, suppressing fire and insuring property;
- Transportation. Experts who specialize in proper care and handling of fine art can ship nationally and internationally, which can be critical to the longevity and value of assets;
- Adequate insurance. It is important to work with someone who has a solid understanding of special risks and needs of artists and collectors. This will help ensure adequate coverage is secured; and
- Identify the right appraiser. Work with appraisers who are certified in their field – American Society of Appraisers or International Society of Appraisers – and in proper business practices – The Uniform Standards of Professional Appraisal Practices or Ethics of Appraisers Association America – to help guarantee the most fair and accurate appraisal.
Organize and document assets Another critical component is proper documentation and cataloguing. Having a professional who can help record the history as well as provide a comprehensive inventory of all pieces is crucial in maintaining value. Much like a museum systematically inventories its assets, individuals should work with a firm that can provide the same level of service and system support for their collection. This will enable owners to make updates as pieces are added or removed and provide an easily managed, and often enjoyed, comprehensive report. Having a detailed account, including where and how each piece was obtained, can make a significant difference in individual item and overall valuation.
Customize a plan for the unexpectedIt is important individuals consider these items in the estate planning process. This allows the owner to truly consider how he or she would like to have these assets distributed when the time comes. Will they be gifted to a museum, a family member or a nonprofit? Will these objects be liquidated so the funds can be passed on to beneficiaries? Who will handle the logistical details and actual distribution? These can be complicated and confusing areas to traverse. However, a fine art management professional can help address and execute these strategies and plans, which will not only benefit the owner, but the recipients, as well.
Be proactive and plan nowThe sooner an individual begins this process, the sooner they will reap the benefits. Owners of valuable collectibles, memorabilia, art and so on have much to gain by exploring these options. Establishing a thoughtful and well-planned legacy ensures beloved items will be expertly managed both now and in the future.
Jan Leonard is senior vice president and managing director of UMB’s Fine Art Services and Charitable Trusts and Foundations. She can be reached at jan.leonard@umb.com.
