Abigail Bogli Authors Article for WealthManagement.com About Estate Planning Strategies for Art Collectors
Abigail Bogli, a Milwaukee-based Quarles & Brady attorney in the firm’s Estate, Trust & Wealth Preservation Practice Group, wrote an article for WealthManagement.com about key estate planning strategies for art collectors.
Over the years, many people have come to see art as a smart long-term investment, with one survey finding that four of 10 art collectors said they were motivated primarily by the financial aspect of collecting. In the article, Bogli outlined the role tools such as irrevocable trusts, family entities, art funds and freeports can play in protecting a collector’s investment.
An excerpt:
Three financial features of the art market intrigue investors: (1) value retention, (2) portfolio diversification, and (3) return potential. Art holds its value over time and can be used as a hedge during periods of high inflation and intense market fluctuations. The valuation of art is independent of many external events and tends to gradually increase in value over time. Art also provides for portfolio diversification, which helps minimize risk. Many investors are intrigued by the potential for high returns on art investments. A study concluded that between 1995 and 2023, art investments produced an average 11.5% return on investment year over year, while during the same 28 years, the annual rate of return for the S&P 500 was only 9.6%.
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Investing in art has its benefits, but it’s not without limitations. Entrance to the art market is pricey and comes with a steep learning curve. It’s generally illiquid, and, in most cases, to see real returns, investors must play the long game. However, because art appreciates over time and is insulated from much of the market volatility, it can be an ideal asset to accomplish investment and estate planning goals.