A growing number of art collectors are turning to a common estate planning tool that will let them continue possessing and enjoying their art while reaping tax savings. When a person places property into an irrevocable trust it is no longer included as part of the estate for tax purposes. Another tax benefit involves being able to legally appraise the items of art for tax purposes when they are gifted to the trust, and as a result being able to shelter the appreciation. People who put their art into a trust can continue to hold onto it by having the trust rent it back to them. One of the issues that might come up involves determining a fair-market rent for the art because the rent does matter to the IRS.
See Daniel Grant, Art Collectors Discover Irrevocable Trust, The Wall Street Journal, March 27, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
