Can you sense it?
Although many of our readers might not perceive it in any manifestly overt way, they nonetheless can intuit that there is an unprecedented amount of cash and other assets being shifted around presently. The movement owes to vast amounts of wealth owned by baby boomer individuals and couples now intent on passing it along to future generations.
A recent Reuters article notes the cataclysmic shift, calling it “the biggest intergenerational wealth transfer in history.” Reportedly, the boomer crowd will pass down close to $70 trillion (yes, that’s with a “t”) in assets within the next quarter century.
That’s just flatly stunning, right?
The “usual” sources are of course apparent and dominant. They include huge oceans of cash, large stock portfolios, bonds, real property, family businesses and valuable collections of various types.
That last-named asset class obviously includes art, which can command a huge piece of the asset pie in select cases spotlighting extreme wealth. Some well-heeled planners have art collections valued in the hundreds of millions of dollars.
Even those with more modest holdings can have urgent concerns regarding what might happen to their valued works in the future, though. A recent survey indicates that a chief worry for many collectors is “what happens when they pass on their art to the next generation.”
That’s obviously a valid concern. Perhaps a son or daughter won’t have the same acumen for art or appreciation for its value (both intrinsic and financially) that an original purchaser does. How can a collector protect a valuable collection if, as Reuters stresses, an heir can’t tell the difference between “a $100 print from a garage sale and a $1 million paradigm of Abstract Expressionism?”
It might reasonably be a smart move to enlist help from a proven estate administration attorney in such a context, specifically one with a deep well of experience working with high-asset individuals and families. There are a number of planning strategies that can be employed (establishing a trust, for example) to safeguard art’s economic value, reduce or eliminate its transfer-tax implications and promote a family’s legacy and values.
An experienced estate planning lawyer can provide further information.