Next Generation Training for Families with Wealth in Art

There is no one "right" approach to involving millennials in the family art, but the timing is relatively clear.  Values surrounding art and culture are most easily transmitted from one generation to the next while senior family members are still living. For the most part, education regarding a family's art and cultural heritage is largely informal and often guided by parents and grandparents.

The act of passing on high value works of art is about much more than wealth preservation, its about creating a meaningful legacy that reflects the family's values. The following are 10 tips for advanced preparation when it comes to the family art collection and knowledge transfer to the next generation.

- Education about art and wealth transfer often happens later in life. More often than not, millennials find themselves seeking out information on their own as the need arises.  To maximise their chances of leaving a lasting legacy, millennials should confront this challenge sooner rather than later.  The key is to start early, particularly with external sources of learning such as visiting museums and art galleries as there is a clear correlation between starting early and building confidence.  

- Celebrating the history of a family collection is an excellent way to pass values from one generation to the next. Family members should share stories related to specific art acquisitions and the impact on the collection that past generations have made. Millennials should visit art institutions where their parents and grandparents have gone before them and learn how, thanks to their family, these organisations have benefited from family donations and/or the gifting of works of art.  

- Families should professionalise family meetings by inviting art market and wealth management professionals to attend as resources, teachers and mentors. Such meetings can serve to identify and prioritise issues objectively and recommend resources to address them.  Outsiders can often raise sensitive and important issues without the emotions and burdens of family baggage and help tackle the complex challenges of wealth planning for art assets. 

- Informal knowledge transfer is important, but supplementing it with more structured learning will help to preserve the family collection for future generations. By acknowledging the effectiveness of next generation training offered by professional advisers millennials can benefit from a more structured curriculum. These more formal methods of imparting knowledge are an important supplement to less formal methods.  Millennials should participate in workshops on how to chart a creative and sound art succession plan that will serve the family effectively over time.  

- For many individuals, their first exposure to ownership of an important private collection is as inheritors. Unfortunately, receiving an inheritance is an emotionally challenging time characterised by inadequate information and documentation on the artworks in the collection and low levels of support. The unsettling nature of the experience, combined with a lack of confidence, weakens their ability to build a lasting legacy. 

- Advance preparation and sound advice from trusted advisers can have a transformational impact during an emotionally challenging time. By seeking out information, talking openly with family members, and asking questions of professional advisers inheritors of important collections can better prepare themselves to navigate the uncertainty that awaits.  An art collection requires the same strategic planning as other investments and with the help of skilled advice can be an effective working asset. 

- Dealing professionally with art generally requires intense study, whether it be theoretical, academic, or practical.  It takes tremendous commitment to actively manage an art collection which is why partnership with established art market professionals can be an appealing and viable alternative. Without proper instruction or guidance, millennials can find themselves making decisions about the collection in a vacuum.

-The lack of preparedness around transferring the family collection can have broad implications on family relationships. Differing expectations between family members may lead to disagreements about what to do with the art, how to manage the collection, or how to preserve the art  for future generations. Misalignment of expectations can create long term unintended consequences for collecting families.  Such occurences can be avoided through proper discussion in advance.

- Families with art wealth to pass on often tend to have a conscious strategy of keeping it in the family by retaining control over next generation learning. Perhaps they want to impart a particular philosophy or set of family values.  In pursuing this approach, however, families typically minimise contact with external influences. The best education comes from blending formal and informal approaches giving families the best of both worlds. 

- In general, parents tend to lack confidence in their children's ability to preserve and protect the family art. To address these concerns, parents must be fully ready to have the inheritance discussion early on.  A critical barrier to open and transparent dialogue is often that the family's art succession plans aren't fully developed. When parents have a strategy in place they will feel more confident that their heirs will be capable of preserving and protecting the family art.

There is no better time for families to tackle the challenge of transferring art wealth.  They have greater access to resources, guidance, and support than ever before. By improving their knowledge, planning the inheritance process, promoting frank discussion, and providing more structured learning, parents can better prepare their heirs to effectively manage the family collection.

Taking advantage of teachable moments can also create opportunities for meaningful hands-on learning.  For those who get it right, the reward goes far beyond transferring knowledge, raising confidence levels, and creating peace of mind. Concerted effort and effective preparation can help ensure that the family collection will last for future generations.

To learn more about next generation training for families with wealth in art please see our Knowledge Library.