Estate planning for art collections—a German perspective

Abstract Under German law, artworks are highly attractive assets when it comes to estate planning for various reasons: First, the valuation method to be used is favourable, secondly, if applicable, payment of taxes with artworks instead of cash can ease liquidity issues, and thirdly, donations to public-benefit organizations can significantly reduce tax liabilities. Last but not least, artworks in private collections may be eligible for tax exemptions of either 60% or 100%. In the course of such estate planning in relation to artworks, it is important to consider certain provisions of inheritance law to avoid disputes among the future heirs and, if the testator wishes so, to protect the integrity of the art collection.