Museum Donation Agreement

These model agreements are only made available as a reference and do not constitute legal advice. It is recommended that people wishing to enter into similar agreements consult a lawyer. Assuming a suitable museum is interested in the work, there are three fundamental structures of giving: donate the work now; Make a promised legacy; or donate a fraction of the interest, perhaps 25%, with the balance given later. There is an additional deal structure called bargain selling, but it is rarely used. This happens when the museum has the opportunity to purchase the work for less than its market value. The collector receives a charitable donation equal to the difference between the fair market value and the sale price and the proceeds of the sale. These agreement structures have very different financial, tax and operational implications. That`s why collectors need to be aware of the differences so they can make an informed decision about whether and how to proceed. Sally and John, collectors who want to remain anonymous, have a magnificent collection of drawings, paintings and sculptures by post-war and contemporary American and European artists. As their children will inherit a lot of wealth and none are interested in living with the collection, the couple chooses to donate their collection to a large institution. After selecting three museums, they negotiated simultaneously with everyone to get the best gift deal possible. Due to the quality of the collection and their willingness to collaborate creatively with the institution around the structure of the agreement, they have reached an agreement with the following conditions: collectors and museums love both art and objects, but they may have different views on the works important to scientists and the museum`s public. Since most museums can only display a fraction of their collection at the same time (usually 5 percent or less of the total number of objects), they are reluctant to expand their collections with material that will spend most of their time in expensive warehouses.

One of the biggest planning mistakes collectors make is thinking that art museums will be happy to accept works from their collection. Timing. The title of the collection goes to the museum after the death of Sally and John. Until then, the collection will remain in their homes for them to enjoy….