Art Tag Archives — Houston Estate Planning and Elder Law Attorney Blog

Americans love collections and homes across the country boast music collections, rock collections, sea shell collections and the list goes on. Often, these personal collections hold a great deal of sentimental value while their market value is nil. Typically, favored items are passed on to the family members who will treasure them while the collections’ value presents very little impact on the estate.

However, an art collection is different because works of art can be extremely valuable.

As the New York Times points out in "Estate Planning Can Get Tricky When Art Is Concerned," art collections require very careful estate planning. The biggest issue is that art is illiquid. If the estate tax is due, then the heirs have to come up with cash to pay it. This requires them to use other estate assets or to sell the art.

Owning a fractional interest in a piece of highly valued art has never been a simple matter where estate taxes are concerned. How the IRS values and applies the estate tax for estates that include fractional interests in art may be changing due to a recent Fifth Circuit Court of Appeals ruling.

Owning a world-class art collection is something most of us only dream of. For wealthy families and individuals, art collections are a valuable and treasured part of their family’s history. But when the owners pass away, these collections often trigger huge estate taxes. Because they are not liquid assets, heirs must use funds to pay the estate taxes from somewhere else in the estate or sell the art to pay for the taxes.

To complicate matters, valuable pieces of art that have been passed down for generations are often owned by multiple family members, with each owning a fractional interest in the art. This makes it even more difficult to handle estate tax issues.

Articles Tagged with Art

Art Collections Can be Estate Tax Burden for Houston Families

Art Collector? Fifth Circuit Ruling May Change IRS Rules on Fractional Art Ownership