Managing Inherited Art: Your Options and Best Practices
Inherited art often carries emotional, aesthetic, and financial value. Yet, it also brings a heavy responsibility. You can keep, donate, or sell the artwork. No matter the choice, ensure the art is insured, stored, and transported properly. Also, include valuable items in your estate plan to pass them on.
To protect your inherited art, follow key steps and best practices. First, be prepared for damage that might occur during transport, storage, or display in your home or gallery.
Initial Steps
Begin by conducting thorough research on the artwork you have inherited. Start by taking detailed photographs of each piece.
Next, create a catalog of any significant and identifying information about each item, such as:
• The artist’s name
• The title of the work
• Dimensions
• The medium used
• The condition of the piece
• The subject matter
• The year of creation
• Exhibition history (where and when it was exhibited)
• The date of purchase
• Whether the art is classified as cultural property
• The provenance or ownership history
• Any other distinguishing or important details about the art
You should also gather all necessary documents to prove the authenticity of each piece (including certificates of authenticity, invoices, literature references, and previous appraisal details). This information is critical in determining the value of the art you’ve inherited.
After completing your research, have your art appraised by a professional. This will provide you with the guidance needed to decide on the best course of action and determine the steps necessary to protect your art.
Getting an Appraisal
Appraisals need to be current for both tax and insurance purposes. Three major professional organizations provide appraisers: (1) the American Society of Appraisers, (2) the International Society of Appraisers, and (3) the Appraisers Association of America. If your inheritance is recent, check with the estate executor to see if an appraisal was already conducted, as you may be able to use that one.
It’s crucial to select appraisers who are knowledgeable about the specific type of art you own. Their expertise will guide your decisions on what to keep, donate, or sell, as well as how to properly transport, store, and insure your art.
The appraiser will check, photograph, and research your inherited art to set its value. Likewise, the appraiser you choose should offer detailed checks and back their prices with market research.
This information is essential when working with an insurance broker to secure coverage for your inherited art. Knowing the value of the pieces will also inform your decisions about selling, gifting, or including them in your estate planning.
Caring for Art You Choose to Keep
If you decide to keep any of the inherited art, the next steps involve proper transportation, insurance, and display.
Art should be shielded from the harmful ultraviolet rays of the sun. Keep your artwork away from windows to prevent damage from bright light. Consider framing it with special glass designed to protect against UV rays and discoloration. Additionally, monitor the humidity levels in your home to prevent damage from moisture and mold.
Never store your art rolled up in cardboard or plastic tubes, as this can cause the paint to stain, crack, or dry out. Instead, store art flat in an acid-free print box, which can be purchased from conservation suppliers.
If you lack the appropriate space for storing art, consider crating it and storing it in a facility that specializes in fine art storage, offering a temperature and humidity-controlled environment.
Review the terms under which your art is stored carefully. It may be wise to seek legal counsel to ensure you receive full replacement value if your art is damaged while in storage. Be aware that many storage facilities, even those specializing in fine art, have a default liability of $1.00 per pound or less for damaged or lost items. This means if your art is damaged while under their care, the facility may only reimburse you $1.00 per pound or less. Additionally, ensure any secured lenders with an interest in the artwork are included in your storage arrangements.
In some cases, another option is to publicly display the art in a gallery or museum.
The terms under which your artwork is transported and displayed are important and often complex. Art can be damaged or lost during transportation, so it’s crucial to have appropriate art shipment insurance to cover potential losses. There are different types of coverage available, including comprehensive, named peril, and all-risk coverage. Selecting the right policy is essential. When in doubt, consult with a specialized insurance broker or attorney experienced in transportation and insurance coverage law to avoid unwelcome surprises.
If you receive a damaged art shipment, promptly photograph and document the damage. Note any signs of mishandling or improper packing. Contact the shipping company and your insurance carrier to report the damage and file a claim. If your art is lost during transportation, immediately report the loss to the shipping company and your insurer, then file a claim. For very valuable art, it’s best to involve an attorney with expertise in transportation and insurance coverage law early in the process to maximize your chances of full compensation for any damage or loss.
Selling Your Fine Art Inheritance
If you choose to sell your inherited art, you have several options depending on its value: you can consign it to a gallery or auction house, work with a private dealer, or sell it outright (for example, to an antique shop or through an online marketplace).
As mentioned earlier, it’s crucial to start by researching the art, verifying its provenance, and having it appraised by an expert.
Auction houses can provide an estimate of the anticipated auction price. Once you agree to a pre-sale estimate and the associated fees, your art will be photographed, cataloged, and offered at auction. Typically, you’re responsible for arranging transportation to and from the auction house, though they may recommend preferred providers.
Keep in mind that if your art is damaged or lost by a professional art transporter, standard reimbursement is usually only $0.60 per pound. This means that if your artwork weighs just 5 lbs., you could risk receiving a mere $3.00 for a $3,000,000 piece. Seeking legal counsel is crucial to thoroughly understand the terms of transportation and to receive guidance on the best coverage options against loss or damage during transit. It’s generally unwise to cut costs by using standard carriers like FedEx or UPS, which have very low declared value limits on fine art shipments (typically only $1,000).
When it comes to fees for services rendered in selling your art, galleries and dealers will charge a fee or commission on sales and may also charge a monthly fee for displaying and/or storing the art. Auction houses, on the other hand, require a “Buyer’s Premium” paid by the purchaser, not by you, typically ranging from 30-40% of the sale price. Legal counsel is critical to ensure the terms and fees are properly documented in a formal contract.
Alternatively, you could sell your art outright to a gallery, auction house, or fine art dealer. A knowledgeable and reputable dealer can advise whether an outright sale or consignment would likely maximize your return.
Whether you consign or sell, know your art’s transport insurance. Even top galleries and auction houses can lose or damage art. So, it’s wise to consult an insurance broker or lawyer. If your art gets damaged or lost, quickly notify the insurers and file a claim. Also, having a lawyer can help you get the most from your insurance claim.
Donating Your Fine Art Inheritance
Donating art can offer attractive tax benefits. You may choose to donate art outright or place it on loan, either temporarily or permanently. However, it’s essential to work with a seasoned estate planning attorney and tax professional to ensure compliance with all applicable tax laws and to receive the full tax benefits associated with your donation.
