This information is located in our software for artists. Some references within the text will be software related.

The Marie Walsh Sharpe Art Foundation offers a comprehensive visual artist’s guide to Estate Planning via their web site and in book form.  Sections of the following have been published on their web site.  The book is a must if you are serious about estate planning.
 
www.sharpeartfdn.org/estateplnbook/estateplanning.htm
 
INTRODUCTION
 
Typically, working artists produce a large amount of work over the course of their career and lifetime.  As you get older, your chances of passing on are greater, and at some point you should begin to consider just what to do with your artwork.  Consider what would happen to your work if you did not plan ahead.  All artists should consider their legacy.  How you treat your artwork can affect its value and marketability for the rest of your life and beyond.
 
Lots of artists do not consider this important aspect of their careers until much later in their lives.  The idea of making a will can be off-putting, but if you value your work, you should read this segment and perhaps begin to think about your long-term plans.
 
YOUR ESTATE PLANNING
 
Creating a good estate and financial plan is a good way to start.  Your financial security and the preservation of your assets for future generations should be in place by the time you reach 50 years of age.
 
• Do you have a will?
 
• Is your will up to date or less than five years old?
 
• Are there any changes in your life that would change the circumstances of your will?
 
• Do you know your financial status?
 
Keep a list where all of your important financial information and documents are stored and tell someone you trust.
 
HOW TO START
 
•  Document and inventory all of your work and enter it into the Artwork Inventory section of the GYST software. This includes art at home, in your studio, in storage areas, at galleries, and on display at outside locations.  In case you will ever have a retrospective, you should include all artwork you have ever made, including work owned by collectors so it will be easy to find your work in the future.
 
• Artists often amass a collection of artwork by other artists, friends and colleagues. You should treat this collection with the same professionalism as your own work. Archive this work, maintain accurate records, and have a plan in place for this work should something happen to you at a later date.
 
•  Organize all information related to your art and your career as an artist, including notes, show reviews, photographs, invoices, personal journals, and correspondences from artists, friends, dealers and collectors.
 
•  Sign, date and title all your artwork, legibly.
 
•  Price your work or get an appraisal.
 
•  Have a marketing plan for your work after your gone.
 
Additional points to keep in mind when planning your estate:
 
•  When planning your estate, you need to assign an executor.  Find someone you trust and make sure they are willing to take on this role.  Talking with them upfront is a good idea, and you can make plans together.
 
•  Make sure the executor knows where things are stored and how to find complete contact information for your dealers, representatives and agents. It is crucial to explain to the executor how to work with these people. If you have not found someone with art business experience to represent or handle your art, now is a good time to start looking.
 
•  Make sure your executor, heirs, dealers, agents and representatives understand what you want done with your art (without trying to micro manage). Never assume that people automatically know what to do. Put your preferences in writing.
 
•  Give all concerned parties opportunities to ask questions, offer opinions, and make suggestions regarding the future of your art and your legacy as an artist.
 
•  Leave clear instructions on how your art is to be divided among family members, institutions, galleries, and other relevant parties. Make sure that everyone understands what they are going to get and, if necessary, why they are getting it.
 
•  All instructions should be clear and sufficiently detailed in order to prevent fighting, arguments, or legal disputes over who owns or controls what, and how much that art is worth.
 
•  Consider working with a lawyer to draw up the necessary legal papers for your will and executor responsibilities.
 
WHY NOT LEAVE ART UP TO FAMILY CONTROL?
 
Leaving art in control of immediate family members often does more harm than good. They lack appropriate understanding of how the art business works, cannot promote the art effectively, confuse sentimentality with dollar value, are unsure of what to sell and what to hold, and have difficulty distinguishing opportunists from helpful dealers, collectors or agents. They tend to quote potential buyers prices that are beyond retail, want too large a percentage of the profits when working through agents or consultants, and ignore requests of legitimate dealers to offer the work at sensible prices. Getting the art out into the public becomes difficult and, in extreme cases, an artist's market can be significantly damaged.
 
Less often, family members grossly undervalue the art and either sell it off in bulk to dealers or occasionally destroy pieces that they regard as insignificant or that they simply do not like. Once again, personal feelings can trump reason. In these cases, the artist has failed to convey the value of the art and failed to provide specific instruction on how to maintain and sell it.
 
MAKING ARRANGEMENTS WITH A GALLERY
 
The best procedure is to make arrangements with a gallery or galleries to represent your work. If you have had reasonable success in your career, engaging the services of an arts attorney is probably a good idea. The decision on whether to have family members sit in on negotiations or to simply present them with the final contract is up to you.
 
When negotiating, specify wholesale and retail price structures (by the piece, according to size, medium, etc.), dealer commissions, methods of payment, percentages of profits that go to specific family members, and how and where the art is to be stored, maintained, and accessed. Ultimately, dealers should have control over whether and how much to raise or lower selling prices in the future, so do not be too rigid or insistent here. When a percentage of the art is to remain in the family, leave complete instructions on how to appraise, sell or donate it if or when those situations arise. Lastly, make sure every piece is catalogued and classified according to your agreement.
 
If you do not have a solid relationship with a gallery, consider establishing one now. Another option would be to contract with an agent to represent your work. In either case, make sure you have adequate referrals from artists and collectors before proceeding. Since you will be dealing with a stranger, enlist the services of an arts attorney and a neutral appraiser in order to protect your interests.
 
MASS DONATIONS

As for donating to museums, only contact institutions that have expressed interest in your work and donate only what is requested. Do not insist that anyone take more than they want and do not donate to places unfamiliar with your work. Excess or unwanted art is usually refused altogether, accepted but placed into eternal storage, or ends up on tables at white elephant sales. Only consider a mass donation if your primary reason is tax related, but make sure you fully understand IRS procedures and get formal appraisals for tax purposes well ahead of time.
 
FUTURE MARKET VALUE
 
You can further enhance the future market for your art by making sure that everything is signed, dated or otherwise labeled including sketches, drawings, and lesser items. In situations where artists leave behind quantities of unsigned works, those representing the estates are forced to make estate stamps or provide other forms of certification after the fact. Dealers and collectors view these pieces as less desirable because the artists never took time to sign them and, therefore, are less valuable.
 
Also document as many pieces as possible in terms of age, significance, and other relevant details. Good documentation increases understanding of the art as well as its value. Collectors prefer knowing the history behind what they are buying and pay for that privilege. Younger artists should think about starting this now while everything is fresh in their minds.
 
ESTATE TAXES
 
Estate planning should begin as soon as possible, especially if you are successful and are accumulating increasing amounts of your own art. To the IRS, successful means that your entire estate (art included) is valued at over $600,000. Under that amount, you have nothing to worry about tax wise, at least at the federal level.
 
One of the best methods for passing on property and minimizing estate taxes is to give non=taxable gifts during your lifetime. According to IRS regulations, you can give a maximum of $10,000 per year to any individual, charity, museum or other entity (except to an employee) or as an incentive to enter into a business transaction. 
 
In order to avoid any confusion as to when gifts are given, supply the IRS with full documentation as to dates, recipients, and amounts by filing the proper document—Form 709, United States Gift and Generation-Skipping Transfer Tax Return.  If you wish to give gifts or donations of over $10,000, particularly to museums or charities, you will need to consult a qualified tax consultant and work out an arrangement where you will be able to take the full, appreciated value of that gift as a tax deduction.
 
Now for the sticky part: determining the fair market value of the art that you are gifting or donating. According to Internal Revenue Code, fair market value is defined as the amount that an appropriately informed and willing buyer will pay a willing seller in an unforced transaction and in a market in which such items are commonly sold. With art, there is plenty of room for interpretation for you as well as for the IRS, which means that one has to be careful. The IRS has the right to challenge valuations on any gifts of over $5,000 for a period of four years after they have bequeathed, so be accurate in your assessments.
 
Consulting a professional appraiser and paying for an appraisal is advisable if you have any questions as to how to value your art. You can avoid this by maintaining records that show your art repeatedly changing hands in the marketplace for comparable amounts to what you claim they are worth as gifts or donations. The more of these records you have, the better.
 
Certain valuation problems arise on a regular basis. For example, when artists give art to close friends, family and relatives, their natural inclinations are to give as much as possible and value it as low as possible in order to maximize the amounts that they can give tax-free. On the other hand, when artists donate to museums, charities, or similar institutions, their natural inclinations are to give as little as possible and value it as high as possible in order to maximize their income, gift or estate tax deductions. The IRS is well aware of both inclinations and will go after you if they think something strange is going on.