The playground of art collectors has evolved a lot, in particular over the past few years. With many art shows and fairs going online, as well as the raise of NFTs, collectors had to adjust to new ways of collecting. Despite a fast-evolving art scene, the challenges of managing an important collection remain the same: its structuring and the passing onto the next generation.
Important art collections usually represent a huge investment from a financial perspective. As the financial world has for several years now accepted art as an asset class, it is no longer possible to treat these type of collection as simple collectibles hanging on walls. Many solutions already existed for the structuring and estate planning of collection, such as trusts and foundations, but now planning experts have become also very familiar with these assets and can therefore offer highly sophisticated solutions, which are essential in the global planning of the collector’s wealth.
In the specific case of the transmission of a collection, one of the main issues is how it can be best passed onto the next generation. Art Expert, Melanie Damani, notices that the younger generation often do not appreciate the artworks collected by their parents or may simply have no interest in art. In addition, the family has not usually discussed the future of the older generation’s collection.
In the Deloitte Art & Finance Report she has explained that: “Family members have several options to plan the transmission of the art collection successfully. In the process, advisers’ role is to assist the younger generation in viewing the collected items as assets rather than merely an art collection. If the children perceive their parents’ collection in this way, they will be more inclined to keep the collection and manage it rather than selling or simply ignoring it. To assist the family with this, experts can help implement a family governance plan for the art collection, whereby each family member has a role to play around the collection. As with the transmission of a family business, certain children would be actively involved in working in the business while others would be happy simply to be shareholders. Advisers’ role is also to educate the younger generation, provide curation advice on the collection and set up a dedicated vehicle to manage or hold the art”.
The structuring and transmission arrangements for each collection need to be tailored, but, in many cases, advisor’s role, besides providing the above-mentioned services, is to act as a mediator between the two generations. Art is an emotional asset and triggers a highly personal response. It is not always easy for collectors to open up to others on this topic, even to their own children. However, independent advisors can serve as a bridge for communication between the two generations.
Finally and as we know collectors are moved by their passion and may tend to focus only on “now” and forget about “tomorrow”, working with both an art advisor and a wealth structuring expert may be the perfect combination to guarantee an excellent management of the collection, for generations to come.
