By: Dr. Tamara Patzer
In brief: A New Orleans tax attorney explains the planning gap faced by artists and collectors whose wealth is tied up in works, studios and rights. The feature covers valuation, the federal tax treatment of collectibles, the 2026 estate exclusion and a practical inventory that helps a family avoid forced sales.
An artist can spend a lifetime making work that is worth a great deal and still have little cash. A collector can hold a wall of valuable pieces and a tight monthly budget. Both face a question that surprises families after a death: what is all this worth, and who must decide? Todd M. Villarrubia, a New Orleans tax and estate attorney, gives the principle behind the problem in Entrepreneurial B.E.A.S.T. Mode™: “Estate taxes are calculated on fair market value, not cash flow.”
Why is art a special planning problem?
Because it produces value without income. A building rents. A company pays dividends. A painting hangs on a wall. Its worth may rise sharply, yet it adds nothing to the household’s cash until someone sells it. The book describes the same pattern in a different setting: “It isn’t until a liquidity event that their wealth is fully realized; until then, it’s largely paper value.”
For heirs, paper value is a double-edged gift. It signals real wealth, and it can also create a tax bill that has to be paid in cash that does not exist.
What does the federal estate tax framework look like?
For 2026, the IRS lists a basic exclusion amount of $15,000,000 per person for estate and gift tax purposes. Estates below that level may owe no federal estate tax, though state rules and other factors can differ. An artist whose body of work, studio, property and rights together approach or pass that level has reason to plan.
Valuation is the hard part. Works are valued by appraisal, and appraisals can differ. An unsold body of work may be valued very differently by an heir, a gallery and a tax authority. Families should work with qualified appraisers and seek legal advice early, long before a valuation is needed.
How does the tax treatment of a sale work?
Differently from many assets. The IRS explains that long-term gains on collectibles can be taxed at a higher maximum federal rate, 28 percent, than the rates that apply to many other long-term gains1. Whether a particular work counts as a collectible in a particular person’s hands, and how sales by the artist differ from sales by a collector, depends on the facts. That is a question for a tax professional.
The practical lesson is that the form of a sale matters. Selling a piece, donating it, giving it to a family member or holding it in an entity can each produce a different result. The time to ask is before the decision, not after.
What should an artist or collector inventory?
Everything with value, including things that are easy to overlook. Make a list of finished works, works in progress, editions and prints, plates and negatives, and the studio and its equipment. Add copyrights, licensing agreements, gallery consignment contracts and any pending commissions. Note where each item physically is, who holds it, and whether insurance covers it.
The book makes a point about records that fits this task well: “But estate documents don’t prevent family disputes; they merely provide something to fight over.” An inventory that names who decides what happens to each category prevents many of those fights. A will that simply leaves the art to the children leaves the hard questions open.
Who should decide what happens to the work?
Someone named in advance. Artists often prefer a person who understands the work and its market. That person may not be a family member. A plan can separate the decision about what to do with the work from the question of who inherits the proceeds, so that the family benefits without being forced to curate.
The author makes a related point about ownership: “Wealth preservation depends not on what you own, but on how you own it.” An artist may hold works and rights personally, through a company or through a trust, and each choice changes who has control, who bears risk and how the estate will be valued. Seek legal advice on which approach fits.
How can a family avoid a forced sale?
By planning liquidity. That might mean life insurance held in a way that is separate from the estate, a reserve account or a plan for selling certain works in an orderly way over time. The goal is to have cash available when the bill arrives, so the family can choose what to sell and when.
A forced sale is rarely a good sale. Buyers know when a seller is under pressure. A family that has planned has time to wait for the right buyer and the right price. It can also decide which pieces to keep for sentimental reasons, which to place with institutions and which to sell, instead of letting a deadline decide for it.
What does the national picture add?
Context on how typical households hold wealth. The Federal Reserve’s 2025 Survey of Consumer Finances, released October 9, 2026, put median family net worth at $215,900 and mean net worth at $1.24 million. Artists and collectors often sit in an odd place against those numbers, with high asset values and unpredictable income. The distinction between worth and cash is what the plan must address. A useful habit is to ask every year: if the whole estate were valued tomorrow, how would the tax be paid and by whom? If the answer is unclear, the plan has a gap.
Common questions
Does every artist need an estate plan? Anyone with work, rights or property that others will inherit benefits from one. The level of detail depends on the value and complexity.
Should I donate work to a museum? That can be a good choice for some, with its own tax and practical consequences. Seek legal advice before deciding.
Who should hold the copyrights? It depends on goals and facts. Ask your attorney how to separate ownership of the physical work from the rights to reproduce it.
Sources
- Internal Revenue Service, Topic no. 409, Capital Gains and Losses
- Internal Revenue Service, What’s New: Estate and Gift Tax
- Federal Reserve Board, press release on the 2025 Survey of Consumer Finances
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™. Wealth Planning Law Group, 101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124. Phone: 504-982-8207; email: todd@lawealthplan.com; website: https://lawealthplan.com/?utm_source=newsanchored&utm_medium=artist-weekly&utm_campaign=family-office
Disclaimer:. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
