Your expensive artwork could end up ruining your estate, leaving your heirs scrambling to pay bills. The IRS Art Advisory Panel is meticulously scrutinizing appraisals of artwork above $50,000 and insisting on value adjustments, creating unexpected, huge tax bills for heirs. So as a collector, you should have your estate get two artwork appraisals, and the heirs should prepare themselves for having to pay unexpected taxes. Another alternative would be to make lifetime donations, which would avoid estate taxes and allow for charitable deductions.
See Karen Hube, How Art Can Blow Apart Your Estate, Barron’s, June 18, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
