9. Insurance
• Art Insurance
• Explosion of art market = Explosion of
insurance business
• Premium revenues have increased by
30% in last 5 years
• U.S. is fastest-growing market; Brazil
• Increased values also mean increased
liability
14. How much to insure for?
Richard Prince, Man-Crazy Nurse
No.2 sold for $7,433,000
at Christies, May 2008
2003:
Nurse painting purchased for
$100,000
2006:
Same Nurse painting valued at
$250,000
New buyers from Russia, Middle East
and Asia concentrate on artists with
momentum
15. Title Insurance
When is title not clear?
Theft, Liens, Divorce
Provenance Gap
Reassure Buyer
Muddy Ownership
.Note: most reputable dealers guarantee clear title and auction houses
offer warranty
• Suffland Holdings v. Gagosian Gallery (Mark Tansey) 2010
– Consignor forgot work had been partially gifted to Met when signed
representation of warranty to title
16. Shipping
International Freight
• 9/11 Commission Act of 2007
– TSA screens 100% cargo on passenger aircraft
(some shipping companies are Cargo Screening Facilities)
17. Shipping
Mitigate Risk
• Reputable Art Handlers
→ ICEFAT (International Convention of Exhibition Fine Art
Transporters) www.icefat.org
• Before anything is shipped:
→ Condition Report with Images
• Correctly Packed: Crate, Travel Frame, Conservation→ Grade Soft Packing Materials
• Most Direct Route Possible
18. Shipping
Road Freight
−
−
−
−
−
−
Air-Ride Suspension; Humidity, Temperature Control
Security Tracking
Alarm
Consolidated Shipment? → LOFO (Last On, First Off)
Is Someone with Artwork At All Times?
Can Art Be Unloaded in Building?
By Courier
Delivery
− Must be supervised
− Signature constitutes owner’s approval of arrival condition
− Conservator should be on hand for valuable and vulnerable
pieces
19. Shipping
Customs
Generally: Fine Art is Duty Free
→ But what is “Fine Art”?
• “executed entirely by hand” -- YES
• Antiques over 100 years old – YES
• Disassembled “light art” – NO! (EU)
→ Haunch of Venison Case (2010)
= VAT 20% instead of 5% + Customs
» Viola and Flavin works are “wall lighting” and “fixtures”
21. INSTALLATION
• Does it fit??
• Avoid Direct Sunlight – Ultraviolet radiation
(cumulative damage cannot be reversed)
− solar shades
− UV filters/Glazing
− Rotate works
• Location
(Radiators, Fireplaces, Under Sprinkler Systems, Near Heaters)
• Humidity fluctuations (optimal: stabilized between 40-60%)
− Beware of spotlights (heat)
• Sculpture and Objects:
consider plinths, display cases, bases and mounts
30. PARTING WITH COLLECTIONS
• Tired of the Artwork/Change of Taste
• Raise money to buy more art
• No more room/doesn’t fit
• Approaching end of life/priorities shifting
31. PARTING WITH COLLECTIONS
DE-ACCESSIONING: SELLING
• Auction - open, public (not discreet), transparent,
but all at once can be a risk
• Private Sales
− Dealer – or not
− Conflict? Selling
• For multiple pieces: De-accession Plan
− Analyze Each Market Sector
− Don’t Flood the Market
32. PARTING WITH COLLECTIONS
ESTATE PLANNING
GOALS
1.Respect collector’s wishes vis-àvis collection
2.Reduce tax burden on estate
33. PARTING WITH COLLECTIONS
ESTATE PLANNING: GIFT/BEQUEST
DONATE WORKS
TO
CHARITIBLE
INSTITUTIONS
Dorothy and Herbert Vogel
National Gallery of Art
Washington, DC
(Collectors Deduct FMV)
34. PARTING WITH COLLECTIONS
“BARGAIN SALE”
Sammlung Berggruen
Heinz Berggruen
Sold works to Berlin’s
State Museums
for $129 million,
1/10 market value
35. PARTING WITH COLLECTIONS
“BARGAIN SALE”
= Sell Works to Museum for Reduced
Price
•Cash strapped museums
acquire desirable works
•Collector gets deduction +
funds to enjoy or use to defray
estate costs
Blockage: Artist’s estate or estate of their families. Can bring value of estate down significantly 20 – 90%– BUT NOT CASE WHEN CHILDREN INHERIT
Files IRS Form 8232 Noncash Charitable Contributions with tax return, subject to audit. If FMV is worth more than 5k, must obtain qualified appreaisal not more than 60 days prior to donation date. Appraisal must be signed and dated and included in tax return. /MISTAKE: accept artwork as gift from artist and donate because valuation limited to cost of materials
