Evaluation of works of art
As with all asset classes, the valuation of works of art fluctuates. In a bull market, insurance should cover the full value of your collection. In a bear market, you want to make sure that you don't pay for an amount of collateral that exceeds the current value. Regardless of the stage of the assessment cycle, art collections generally remain valuable assets that require periodic attention in order to properly assess the level of protection required.
“The key to making sure you have the right coverage and the right policy amount is, first and foremost, to estimate the present value of your collection. In most cases, it is necessary to use a qualified professional art appraiser, ”explains Anton Antonov of Marsh's Personal Services. Appraisal helps to determine the appropriate replacement value for a work of art, usually at retail price, or to estimate the value of a work if it is damaged.
That said, ratings aren't just useful for insurance coverage. They also help determine fair market value, which is important in the following situations:
Fair distribution of property jointly owned by individuals or institutions
Calculation of the income tax credit granted in the event of a charitable donation of a work of art
Proof of the value of an object in anticipation of its sale or acquisition
Verification of the preparation of estate tax returns, assistance with estate planning or assistance with the distribution of assets
Asset management, loan guarantees, and resolution of related financial and legal issues that may be related to a collection of works of art
Marsh Personal Services recommends using the services of an appraiser accredited by a nationally recognized organization with a satisfactory level of expertise in the category and type of collection you own. To choose the right assessor, remember to ask the following questions:
What are your skills and qualifications? The Chartered Appraiser of Personal Property (CAPP) designation is one of the most recognized professional titles, as well as that granted by the International Society of Appraisers (ISA).
What is your experience with appraising such collections or objects of art? Use an appraiser who has relevant expertise.
Do you have a vested interest in the articles reviewed? Reviewers should not participate in the buying or selling of the reviewed item or comparable items. In particular, they must not have any current or potential interest in the articles of the collection.
What is the cost of the assessment? Reviewers can bill for their services by the hour or by item rated. Request a written quote.
What will be the result of your evaluation work? Request a sample final report or a description of what it will contain.
Protecting the value of works of art relies heavily on careful appraisals, carried out every few years or more frequently if necessary. It is also important to work with qualified insurers and appraisers to obtain adequate protection.
Art asset backed loans
Some Marsh Personal Services clients may be interested in placing an art asset as collateral, which allows the value of a work of art or collection to be leveraged without having to pay. to sell. This is sometimes the best option when a work of art has sentimental value, when it is preferable to keep an item that is likely to increase in value, or when the time is not right to display yourself. the payment of a capital gains tax or sales commissions.
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