Inventory Your Collection
Most collectors do not have a current inventory of their assets; or if the inventory does exist, it is lacking critical information or is in a format that is cryptic in the extreme. Inventories in the estate often are geared towards minimizing the estate tax value of the asset, and are rarely complete or sufficiently detailed. Inventories can sometimes be confusing, because artists often work and collect artwork in many different media, making it difficult to determine who created what artworks in the collection. Therefore, your client will need expert assistance to describe assets for the inventory. At the minimum, inventories should include:
• List of works created by an artist and in your client’s possession;
• Authors (including joint authors and collaborations and contact information);
• Dates of both creation and acquisition;
• Contracts associated with any works, such as licenses, assignments, etc.;
• Where the items are located;
• Galleries or dealer names, along with their contact information; and, any paperwork that refers to the artwork, such as catalogs, bills of sale and so forth.
Whether you use a spreadsheet, a software program or even old-fashioned card catalog system, beginning an inventory is critical.
Include in the inventory any reference to contractual relationships that might exist, including consignment agreements, copyrights, distributions and reproduction rights. Remember that ownership of artwork does not convey the copyright to that artwork. In some countries, artists retain certain rights over the transfer and display of art, even after sale.
Aggregate Your Collection
Even when all of the significant artwork is clearly inventoried, researched, labeled and stored, your client will most likely be confronted with a large number of items, not only easily recognizable valuable art, but coins, gemstones, jewelry, furniture or other collectables. Each collection of items has associated masses of documents, catalogs, notes, letters, bills of sale and paperwork. Although it does not seem like much, a single piece of paperwork can be critical for determining the provenance (and therefore value) of an item. In order to support your client and their new collections of items, each with many different taxes, provenance and valuation issues, you must help them simplify.
A critical first step to simplification is aggregating items and their associated paperwork. Items with similar characteristics are formed into groups and these groups are given certain rules or guidelines based on trends in the taxes, recognition, liquidity premium as well as your client’s desires.