​A client recently called us to update an insurance appraisal for original Andy Warhol prints. A previous appraisal from two years ago was available, however, the insurance company insisted on a new appraisal. You might wonder why insurance companies, such as Pure Insurance (https://www.pureinsurance.com) or Huntington T. Block (https://www.huntingtontblock.com), insist on having an updated appraisal for artwork. There are several reasons that are particularly important to consider.
 
One of the most important reasons to update an appraisal for artwork is to provide documentation of current condition. Condition of an artwork is a significant factor in determining value. Events such as flooding or fire can damage artwork and reduce the value, even if the artwork was not directly impacted. Fires cause smoke damage, and flooding can increase exposure to humidity and molds. A well-trained art appraiser is able to identify and document damage, or confirm that the artwork is not damaged. Furthermore, a fine art appraiser will document details, such as a blindmark, that may be overlooked by a general appraiser.
 
Secondly, an updated appraisal will make sure your collection is insured at an appropriate level. Similar to investment markets, the market value of artwork fluctuates over time. For collectors, underinsured artwork can be a significant risk. For example, if you bought an original artwork 5 years ago for $10,000, and that artwork is now worth $100,000, you need an updated insurance appraisal to ensure adequate coverage amount for an insurance policy. Conversely, if the value of your artwork has gone down, an appraisal will result in lower premiums for adequate insurance coverage.
 
Other significant considerations to take into account for insurance are remodels to the home where artwork is kept, or relocation of artwork. If you are planning a remodel, protect your artwork from any potential damage. Protecting your artwork is especially important if the remodel includes structural changes. Sometimes artwork can be wrapped to protect it during a remodel. However, sometimes the best protection is to remove the artwork for the duration of construction. Whether you are wrapping artwork or moving it, be sure to have professional art handlers and packagers wrap or move the artwork to prevent damage during the remodel or moving process. 

​If you have any questions, please contact us at [email protected].

Recently, a client contacted us for an insurance appraisal. She was remodeling her home and wanted to make sure that her paintings were insured to the proper value in case there was any damage during the remodel. An insurance appraisal serves several purposes, and thinking ahead provides peace of mind. 
 
WHAT DOES AN APPRAISAL INCLUDE?
Documentation of current condition is one of the benefits all appraisals include. In an insurance appraisal, current condition is especially important to document the “before” condition in case there is an event that causes damage. Types of damage include water damage, smoke damage, damage that may occur during a move such as denting or cracking and age-related damage, such as oxidation. Insurance companies, such as Huntington T. Block (https://www.huntingtontblock.com) and Pure Insurance (https://www.pureinsurance.com) provide outstanding policies to protect artwork. 
 
An insurance appraisal is also the basis for estate planning. While financial planners are very good about considering their clients’ needs in terms of financial investments, real property is often overlooked. An insurance appraisal provides information for current values, as well as accurate identification of artwork, furnishings and personal accessories. 
 
In certain cases, art investments outperform equities, real estate and commodities, particularly over the long-term.
 
A SUMMARY SHOWS MARKET CHANGES
Similar to financial investments the value of artwork fluctuates as markets and trends change. Therefore, it is recommended that an insurance appraisal is updated every three years. In addition to a full appraisal report, we provide a summary report of valuations that succinctly reflects market fluctuations. Whether you are remodeling your home or considering estate planning, an insurance appraisal is necessary for good stewardship of a collection.
 
Please contact us at [email protected]. 

When you consider making an investment, there are several considerations to keep in mind. Basic questions such as how much you should invest, what are the expected returns on the investment and what is the time frame for the returns, in addition to what should you sell to invest, are top of the list. Most importantly, what are your goals for investing? Often people look at these considerations in regards to financial investments, such as stocks and bonds, however, the same criteria apply to fine art investments. In some instances, fine art outperforms traditional financial market investments.

HOLISTIC WEALTH MANAGEMENT
While most wealth managers can be proficient in helping clients invest in financial markets, it is recommended to work with a wealth advisor who includes real asset management, such as fine art or collectibles that appreciate in value over time. Wealth Managers such as Andy Chong, CFA at Highline Wealth Partners, https://www.highlinewp.com, utilizes a comprehensive approach in identifying all assets, including financial assets, real assets and fine arts, on your personal or family balance sheet to match your investments with your life goals and aspirations for a fully customized, truly holistic wealth plan.
 
WHERE TO START
The appraisers’ definition of what is considered fine art is usually a piece of art worth at least $5,000. If you want to build a fine art collection, the minimum investment is $5,000 per artwork. If your budget for fine art is above $50,000, you are well positioned to start a fine art collection. My advice to investors is to think about the type of art they enjoy the most, then find a piece, or several pieces, that fit your budget. Finding a good investment can be overwhelming, and working with an art consultant can provide the expertise to help you navigate the gallery and fine art auction world.

BUILDING A FINE ART COLLECTION
Whether it is a personal collection or investments for future appreciation, fine art and collectibles should be taken into consideration in your overall asset base.  After you have established your goals and a budget, a fine art consultant is key to finding investments that will hold their value and increase over time. Beyond simply having a good eye, an art consultant should be highly knowledgable about the artworks, artist and art market of works that they recommend. A good art consultant will help hone your preferences and find strong investments that will perform well over time and also add pleasure to your daily life as part of your collection. Several galleries, such as Artsy (https://www.artsy.net), are online and the big auction houses have also made auctions available online. Keep in mind that if you are purchasing or selling fine art at an auction house, transaction fees need to be taken into account. Fees vary between auction houses, and there is no set industry standard.

WHY YOU NEED AN APPRAISAL
An appraisal is essential to verify the value of an artwork before you purchase it, and is also required to insure your investment. Appraisers often work closely with art consultants, and sometimes we are the same people.
If you have any questions about building or stewarding  your fine art collection, please contact us at Drishti LLC Appraisers, https://www.drishtillc.com.

A few days ago, I was talking with a wealth advisor who asked some pointed questions. The most direct of his questions was, “How do you convince clients that the cost of an appraisal is worth it?”. His next question was, “How often does an appraisal need to be updated?”.  
 
ACCURATE INFORMATION
As with any decision regarding investments, you want to make sure you are basing decisions and strategy on accurate information.  An appraisal provides an accurate valuation based on the current market. Similar to market changes in financial or real estate investments, values of artwork fluctuates. Whether you have an extensive collection or a few valuable artworks, having a current appraisal is crucial to know the standing of your investment, and to help you decide if you want to consider any changes, either expanding your collection or downsizing to reinvest. 
 
You might have any early work from an artist before he or she was discovered, or a collection of Victorian jewelry that has recently become in high demand. An appraisal may reinforce the assumed value of an artwork or discover that a piece that was undervalued. In all cases, it will provide accurate information to base decisions on as you move forward.
 
MARKET CHANGES
Over the past 18 months, the art market has largely moved to online auctions. For an industry that is people-oriented and thrives on in-person experiences of artwork and objects, the shift to on-line viewing rooms and auctions has been challenging. 
 
At first the shift to online high-end sales met some resistance, however, overall sales have rebounded.  Interestingly, sales of contemporary art in particular have excelled. According to the recent Contemporary Art Market Report in 2021 (https://www.artprice.com/artprice-reports/the-contemporary-art-market-report-2021/1-key-figures/) sales have doubled over the previous reporting period, with a strong balance of supply and demand. Sales for traditional art and antique items remains strong. However, with the shift to online sales we need to emphasize our advice to collectors to work with trusted resources for all transactions.
 
MAINTAINING CURRENT INFORMATION
We advise an appraisal of artwork every 3-5 years. In addition to providing the current value, an appraisal will document the current condition and provide information to make sure your valuables are insured for an accurate value.
 
If you have any questions, please contact us at [email protected].

Whether you’re wanting to protect the value of an artwork or in the process of estate planning, an insurance appraisal can help you in both situations. Too often people look into insurance after some sort of damage has occurred, but the best time to have an appraisal is before an incident. In addition to providing a replacement value, an appraisal proves the object exists, documents the current condition, and provides identification with a detailed description.
 
THINKING AHEAD
While we don’t usually anticipate that an artwork will be damaged, it is also impossible to fully prevent damage from water, fire or even in transit during a move. Given that most original artwork is not reproduced, thorough documentation has multiple benefits. First, it provides  record of the artwork, and reference for the condition. If damage occurs that is repairable, an appraisal might be the best or only record available to restore a piece to its pre-damage state. In the event that a piece is damaged beyond repair, an appraisal will provide the information for your insurance company to process the claim. 
 
Having full documentation of your valuables prior to damage will make it much easier to file a loss or damage claim and be reimbursed for the full value. Furthermore, once you have an appraisal, it should be reviewed every 3-5 years to account for changes in your collection, note any changes in condition and be adjusted for changes in the market value. Similar to other investments you may make, the art market fluctuates and tracking the current value every few years can help you decide if you may want to sell or shift the type of pieces in your collection.
 
ESTATE PLANNING
Similar to having an insurance appraisal before an incident, the best time to do estate planning is long before you need it. And the good news is that an insurance appraisal is also the basis for estate planning. So, whether you are building a collection or making changes in a collection, an insurance appraisal will help you steward your investment for the long-term.
 
Please contact us with any appraisal questions at [email protected].

Every now and then, heirs to an estate inherit an artwork that they know is culturally significant, but it isn’t something they want to keep or is unwieldly to preserve. Donation to a cultural institution can offer a way for a piece to be maintained, preserved and shared with the general public. One of the greatest benefits of donating to a museum or cultural institution is knowing that the artwork will be well cared for and preserved. Depending on the value of a piece, it might also be a good tax deduction.
 
THE MURAL STORY
A few years ago, clients I was working with had inherited, among other artworks, a mural by the artist Robert Russin. Robert Russin was a well-known sculptor with more than 400 public sculptures worldwide. He was also a resident of Laramie, Wyoming and head of the art department at University of Wyoming. My client’s mother had been a personal friend of Robert Russin. According to my clients, one evening at a dinner party, Robert Russin drew a mural on their mother’s bathroom wall. It was a classic scene of a reclining Eve being tempted by a serpent giving her an apple. The sketch that night was a start that was fleshed out the next day. Over decades, the mural remained in the bathroom and was preserved. 
 
With the passing of their mother, the heirs planned to sell the house and were concerned about the fate of the mural. While working on their appraisal report, I contacted the Wyoming State Museum to see if they would be interested in having the mural in their collection. I also provided quotes from an art conservator to remove the mural from the home, in essence removing the entire wall. Once the appraisal established the value of the mural, the museum agreed to accession it into their collection. Removal of the mural was a dramatic and carefully orchestrated project that took two days.
 
DONATI0N PROCEDURE
While most donations are not as complicated as removing the wall of a bathroom, there are procedures for donations that appraisers can help with. Most important is finding the appropriate cultural organization. Most cultural institutions only accept donations that directly support their core purpose. For example, an art museum will not be interested in historic papers, but your state historic society most likely will be interested and might even have a budget to purchase historic documents.
 
After you contact on organization to offer a donation, they will probably want to meet for a review process. This provides an opportunity for the organization to examine the piece in person and determine if it fits in well with their collection. There are many considerations that an organization takes into account for donations, and not all offered donations will be accepted.
 
Having an appraisal in hand provides clear documentation, identification and a value for both the donor to use as a tax deduction and also for the organization to consider the donation. If you plan to use the donation for tax deduction, talk with your accountant prior to making the donation to ensure the proper information is provided and procedures are followed. Some organizations may request a fiscal donation to cover the burden of care for a donation, while other organizations may offer a to cover the cost to transport an artwork that is offered for donation. 
 
If you are considering donating an artwork, we can help. Please contact us at 970-658-0468 or [email protected].

You know you need an appraisal, but what kind of appraisal?
What are the options? And what are the differences?
 
The quick answer is that the kind of appraisal you need depends on your intention. Do you want to know the value simply out of curiosity? Do you need to have a collection appraised for insurance? Do you want to liquidate? Are you in the process of estate planning or distribution? 
 
CURIOSITY
If you are simply curious about the value of an artwork or collection, a restricted appraisal will help you. A restricted appraisal is a written appraisal that provides a valuation, but information is for the client only and cannot be shared with anyone else. For example, a client cannot use a restricted appraisal as a basis for a sales price with an auction house or antique dealer. Likewise, it cannot be used for insurance purposes. It is for your information only.
 
SAFEGUARDING YOUR COLLECTION
A full appraisal report can be shared with specified entities, such as an insurance company, a lawyer or legal firm, accountant or anyone specified in the contract. It is the type of appraisal report we most commonly provide for our clients. Whether the appraisal report is for insurance, estate or donation purposes, every report should include good documentation and a detailed description of each item along with the valuation. However, the methodology and type of valuation varies depending on the intention.
 
For insurance purposes, the appraisal report is written for replacement value. For one-of-a-kind artworks, the basis for comparables is usually other works by the same artist, or artwork of similar renown, age, materials and genre. An insurance appraisal is also used for estate planning purposes, as well as insurance policies and claims.
 
FAIR MARKET VALUE VS. MARKET VALUE
In the situation of an estate distribution, the appraisal report is written to determine Fair Market Value, which is slightly different from Market Value. The term Fair Market Value is defined by the IRS as: “The price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.” In other words, Fair Market Value is the value at which an object would change hands between a knowledgeable seller and a knowledgeable buyer, where both parties are willing and comfortable with the transaction. Comparables for Fair Market Value are relatively recent, actualized sales of pieces by the same artist or artwork of a similar renown, era, materials and genre. It is not used for forced sale or bankruptcy situations. On the other hand, Market Value takes into account the more specific circumstances of a sale, and is used for the intention of liquidation.  Similar to Fair Market Value, Market Value uses a sales comparison approach of recent, actualized sales to determine the value.
 
CHARITABLE DONATIONS
Fair Market Value is also used for non-cash contributions. Although there has been much discussion regarding non-cash donations and the eligibility for tax deductions in the past few years, they are still allowed. Furthermore, any non-cash donations over $5,000 require an appraisal by an IRS qualified appraiser.
 
While methodologies and terms differ for each kind of appraisal I hope this article provides an overview understanding to help you determine what kind of appraisal you need. Please contact us with any questions you have at [email protected].

If you follow news of the artworld, or are watching a movie, one of the perennial themes in real life as well as fiction is the question of fake reproductions of masterpieces. Consider for a moment the painting by Leonardo Da Vinci titled Salvator Mundi. Not only has the authenticity of the original been heavily scrutinized, there are 12 copies painted by Da Vinci’s students and variations created by other students and followers of Da Vinci. Whether a classic painting such as Salvator Mundi, or more recent knock offs such as fake Rothkos, the authenticity of artwork matters
So how do art collectors ensure their pieces are authentic?
 
TRUSTED SOURCES
Many art dealers and galleries will provide a Certificate of Authenticity (CoA). While a CoA can be a valuable document, they are also a commonly forged document so we rely on further documentation of provenance – the paper trail of previous ownership or record of sale – and study of the artwork to prove authenticity.
 
The best way to know that art you are investing in is authentic is to buy from trusted sources. Galleries usually have a relationship with the artists they represent, and can provide information on their work and artistic process in addition to specific information on a piece you are interested in purchasing. Most serious contemporary artists have websites and are happy to verify (or disavow) the authenticity of an artwork.

Similarly, auction houses are selective with the pieces they accept for auction. Before including a piece in an auction, a credible auction house will have experts look at the piece and will often list provenance of an artwork. Before attending an auction or bidding on a piece, review the description and make inquiries regarding the provenance of an artwork. Ask about the previous ownership and location of an artwork. [3]  It is good practice to follow up on the information provided. In addition to verifying the provenance of an artwork, you may find other information to inform your purchase. The more knowledge you have about an artwork and the artist the more you are likely to enjoy it.
 
KNOW THE ARTIST
The most direct way to be sure of the authenticity of an artwork is to know the artist. While artists have a reputation of being reclusive, most will welcome the opportunity to discuss their artwork with an interested buyer. Although artist receptions have been curbed in Covid times, you can still connect digitally, or simply over the phone.
Whether you buy directly from an artist, a gallery or at an auction be sure to get full documentation of the sale to keep in your records. When you decide to get an appraisal, provide all the information you have to your appraiser. The more information you provide, the further ahead you’ll be in receiving an accurate valuation of your artwork.
 
OPPORTUNIST BUYING
Although gallery, auction and artist -direct purchases are the most trust worthy, many knowledgeable collectors comb antique stores and flea markets hoping to find that hidden gem. Opportunist purchases can be good investments, however, you need to have significant knowledge for a “find” to be fruitful.
One of my clients is a highly educated art historian who claims to have an original William Hogarth drawing in his collection. The drawing was purchased from a reputable auction house, but not identified as a Hogarth. Following extensive research, he asked me to appraise the drawing for him. In order to provide an accurate appraisal, I referred the client to an authenticator to verify the authenticity of the drawing as an original William Hogarth.
​
To be clear, authentication is a scientific process that analyses the materials as well as use of materials to determine the artist or creator of an artwork. In this case, the potential increase in value was definitely worth the cost of authentication. 
Although most appraisers are not authenticators, we work closely with authenticators and conservators, and can help you determine when it is worthwhile to authenticate or restore an artwork.
If you have questions about artwork in your collection, please contact us at  [email protected].

In January 2020, I got a call from clients who had recently lost their mother. One of the siblings lives in Canada and the other sibling lives in Colorado and they weren’t sure about the value of some of the artwork and how/if they sibling in Canada could take a piece over the border. I was able to identify the high value pieces for the estate and help my clients decide the best way to divide the valuables. On the way to a consignment store, one of the lamps in the estate broke and lost all its value. 
 
In this case it was not a high value object, but if it had been high value an insurance appraisal would have helped retain that value.
 
If you are undergoing the process of estate planning, your advisor will encourage you to have your art collection appraised in addition to your other assets. For the purposes of estate planning, there are really two subsequent appraisals that need to happen: The first is the insurance appraisal, which reveals the replacement value of any object. However, your estate will eventually need to be distributed, and so a second estate-distribution appraisal will be necessary to know the market value of your collections. But before we go too far down the path of estate planning, let’s take a closer look at that crucial first step and the many benefits of an insurance appraisal.
 
THE STORIES YOUR OBJECTS TELL
In addition to its contribution to your estate planning, the insurance appraisal itself has a tremendous amount of value. One of the great benefits is preserving the stories of objects. Having those histories recorded and documented officially with the piece will serve generations to come. Unfortunately, not all families can agree on ownership, let alone the historical significance, of their inherited collections. Going through the documentation process will also help further down the line if you need to find any specific information about any single piece of art. 
 
KNOWING BEFORE ITS TOO LATE
One of the most practical benefits of an insurance appraisal in and of itself is knowing the value of an object or the need for documentation before any damage happens. Of course, we don’t plan on damage happening, but an appraisal will help maintain the value of objects while you still have them and maintain that value for future owners.
 
PEACE OF MIND
Being prepared for the unexpected is primarily for your loved ones. You would like to ensure that the transfer of your estate goes smoothly, and stays outside of the court system. But it also helps your own peace of mind to know that you have your ducks in a row should anything happen. You may not want your legacy and your estate to be a burden on its recipients, but rather the gift you intend it to be.
 
FINDING THE RIGHT PEOPLE 
If you’ve found an estate planner that you trust to help you make a distribution plan for your estate, they should also be able to recommend an art appraiser. But if you’ve already made it this far, then I suggest you give us a call first, at 970.658.0468 or email us  [email protected]