Estate tax considerations and a lack of space are the top reasons that heirs are deciding to not keep art they inherit, according to a new study on global collectors from Art Basel and UBS.
The survey found that 55% of inheritors were motivated to sell art due to not having enough space to keep them, while 47% used the proceeds to help pay estate taxes. Among Gen-Z and millennial respondents, 32% cited a “lack of fit” as their reason for selling or donating inherited works, suggesting their tastes in art differ from older generations.
Art Basel and UBS surveyed more than 3,660 high-net-worth individuals (HNWIs) from 14 global markets. The survey found that average allocation to art among HNWI slumped to 15% in 2024, a drop from the 19% average in 2023 and a peak of 24% a year prior.
However, the survey’s richest individuals, with at least $50 million, have maintained a 25% average art allocation this year.
Heirs could be further pushed to sell art for estate tax reasons leading up to the expiration of former President Donald Trump’s 2017 Tax Cuts and Jobs Act. Should that policy expire at the end of 2025 without further legislation from Congress, the U.S. federal estate tax threshold is expected to be cut in half from its current exemption level of $14 million.
Despite an overall drop in art spending and portfolio allocation, the Art Basel-UBS survey found that 80% of HNWIs are concerned about preserving their collection for future generations. Among them, 65% already have a succession plan in place to give works to their partner or spouse, and 43% enacted a similar plan for their children. Nearly half (49%) plan to donate their art to museums.
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