“You don’t want to create a family art war because of bad planning,” Mendelsohn says. Certainly, no option has more potential to create domestic friction than keeping art in the family. Many collectors are surprised to learn that the art they hold so dear holds no real appeal for their offspring. That’s why Hollander stresses the importance of open communication between advisors and collectors and between collectors and their families.

In addition, Mendelsohn warns against the “empty-hook syndrome.” This occurs when you assume that your children will simply remove the paintings on your wall and hang them on theirs. It’s never a good idea to leave even a single painting to your children without telling anyone. When your children later want to sell the painting, they’ll be asked to present a record of its provenance. Without that paper trail, the work’s value will be diminished. And if your children eventually do sell the painting, the Internal Revenue Service won’t be happy to learn that they’ve generated income from an asset that your estate never accounted for.

If you plan to leave art to your children, you and they would be wise to sit down with your advisors and discuss the logistics.

ESTATE TAXES

You must consider the tax bill your children might inherit. Unless the collector’s will stipulates otherwise, the beneficiary is responsible for paying estate taxes on inherited property. Your advisors can show you how to ease the burden on heirs created by estate taxes (the federal rate is 45 percent, and some states impose their own estate taxes) that could stretch into six figures. “If you’re not leaving your property to either your spouse or charity,” says Susan Porter, a managing director with U.S. Trust, Bank of America Private Wealth Management, “the most significant beneficiary of your estate will be Uncle Sam.” While we’re on the subject of taxes: If your children later decide to sell your works, they will be liable for the 28 percent federal capital gains tax on fine art—nearly double that of most other assets. In some cases, a will may specify that certain assets be bequeathed. Those assets that are not specifically accounted for (known as the “residue”) can then be used to pay estate taxes as well as the cost of executing the will.

Another mechanism is an irrevocable life insurance trust, whose proceeds, when you die, could be used to cover estate taxes.