An interesting article on probate & artwork in the recent issue of Penta, published by Barron’s, www.barrons.com.
Q: What do you do with artwork that creates a taxable estate?
Q: How will you plan your estate and do you have a plan to pay your estate tax?
- While 90% of most “artwork” does not appreciate, the “art market” has been on a tear. What’s the difference?
- The painting which you purchased on your trip to Key West or Orlando probably is not going to create a sizable estate for you.
- But purchase hot, emerging artists active on the NY art scene who galleries court and who museums whisper about? Or Modern marvels? Now, you may have something.
- Unless you are a serious and selective art investor or collector, don’t expect to make millions.
- If you are serious and are building an art collection, consider these points and read the recent Barron’s PENTA article.http://blogs.barrons.com/penta/2014/06/27/gifting-the-de-kooning/?mod=BOL_hp_highlight_5
- Artwork is illiquid and “unmarketable” — Florida estate planning attorneys define “unmarketable” differently than you do.
- Does your estate plan include a liquidity plan?
You need a liquidity plan to pay the estate tax if your estate is more than $5 Million.
- Will your Florida personal representative sell other estate assets to pay the IRS? Will someone not inherit something that you expected them to?
- Or does your probate have enough money at its fingertips to pay estat taxes….because you created a life insurance trust outside of your taxable estate?
- If you are using a life insurance trust to provide liquidity, know how to keep the death benefit our of your estate, but still available to your Florida personal representative to tap for estate administration expenses, IRS estate taxes, and, oh yes, those Florida probate lawyers.