What is Your Art Worth?
Art appraisals can be an important part of tax and estate planning as well as a means of protecting one’s art investment. In this Tanager Talk, Jeremy Stone, an accredited senior appraiser with over 30 years experience in the Modern, Post-War & Contemporary art market provides a master class in valuing art that is essential for insurance coverage, charitable donations, estate tax, division of property and more.
When considering insurance coverage for fine art, Jeremy reminds us that unimaginable accidents happen all the time. For example, once in a heated game of ping-pong, a player fell into a valuable 1960s Wayne Thiebaud painting. Sinks overflow and roofs leak so don’t leave your art unprotected.
For insurance coverage, you will need a Replacement Value report by a qualified fine art appraiser. The report determines the value that would be required to replace the work with another by the same artist with a similar date of creation, composition, media, provenance, quality, condition and scale. Replacement value appraisals should be updated every five years as the market for certain artists can change dramatically.
If you are considering art for charitable contributions, estate planning, division of property or as collateral, then you need a Fair Market Value report defined as the price at which the property would change hands between a willing buyer and seller. Fair market valuations are also useful in the sales process, helping the owner negotiate consignment agreements with galleries and auction houses or when completing private sales.
Whatever the reason for the appraisal, the process is the same. The appraiser should always view the work in person (not from photographs), checking the condition and other important details. But how to select the right appraiser? You can obtain referrals from galleries, other collectors and on websites such as www.appraisers.org. Look for individuals who are experienced, discreet, who have access to non-public information and insight into the art market.
Membership in a professional organization is essential and, objectivity is key. Appraisers are paid by the hour and not as a percentage of the value of the art, just like a lawyer. Jeremy warns that auction houses have an inherent conflict of interest in offering their appraisal services, often for free, as they are hoping to eventually sell the work.
And never forget that while art may be your passion, it is important to never forget the business side so that you can always protect the beautiful art that you value.
To hear the full interview packed with useful information plus entertaining insights and anecdotes from the art world, click here.
Learn more about Business Matters in the Visual Arts at www.BMVA.biz . Jeremy Stone. ASA, may be contacted at Jeremy@BMVA.biz. To learn more about the services provided by Cullman Stone LLC visit www.CullmanStone.com