Giving Compass' Take:

• The Aspen Institute provides notes on estate planning for artists endowing foundations based on research.

• How can this information guide your planning? Is it time to overhaul your strategy? 

• Read about a collaborative approach to estate planning. 

It is important to acknowledge that many artists will not be well served by creating a taxexempt charitable entity as the means to steward their creative works posthumously. This includes artists whose primary estate planning concern is to provide a financial benefit to family members, a function that by definition will require a non-charitable vehicle such as a noncharitable trust or a simple noncharitable bequest. It also includes those artists whose works have only a nominal current market value and who are unable to provide sufficient alternative sources of economic support (such as easily liquated real estate holdings, financial investments, or a life insurance policy) to make a foundation financially viable.

But what of those artists for whom a private foundation in the form of a charitable trust or nonprofit corporation could indeed be an appropriate option in light of a public benefit purpose and sufficient assets? They have a different set of concerns.

Once committed to the decision to create a foundation, the choices such artists make in estate planning can have a significant impact on the viability of the entity they intend as the mechanism to fulfill their charitable intentions for art stewardship and cultural philanthropy. Failing to act, waiting too long to act, acting without appropriately qualified guidance, or acting but making uninformed choices—i.e., not querying the potential results of the choice that has been recommended—can compromise the best intentions and undermine the most generous commitment of resources. To help avoid these pitfalls, AEFI offers a partial checklist of issues that should be considered by artists intending their estate plans to endow a foundation.