Delaware offers a Complete Package of Incorporation Services:
Modern and Flexible Corporate Laws, a Highly-Respected Court of Chancery, and a Business-Friendly State Government.


I am constantly asked, “Why Delaware?”, what is the “Delaware Advantage” and how does it apply to fine arts? Fine arts can create challenging tax issues, but with proper planning, artists, collectors, investors and dealers can minimize income, sales and estate tax consequences.

Delaware has long been known as the jurisdiction to settle trusts. Specifically, the Delaware “advantage” comes from its longstanding favorable laws, consistent rulings by the Court of Chancery and a legislature and bar that work closely to keep Delaware in the forefront of trust construction and administration. Such advantages include providing for asset protection, confidentiality, non-judicial settlements, creation of perpetual trusts, non-judicial accounting, creation of total return trusts and state tax exclusions for accumulation of income for non-Delaware beneficiaries of certain trusts, just to name a few.

Although not for everyone, fine arts can be a valuable asset class making up a balanced portfolio within a Delaware trust. In many cases, corporate trustees will not take possession of tangible assets such as fine arts or real estate, but this can be resolved by having the trust form an LLC to hold the asset, thereby allowing the custodian to take possession of the interest in the LLC. There are ample storage facilities in Delaware that cater to fine art collections and the cost of storage in Delaware can be less than that in other parts of the country. There can also be a significant sales tax savings on the purchase and sale of fine arts since Delaware does not have a sales or use tax. Furthermore, in the case where the trust beneficiary is not a Delaware resident, an income tax savings may be achieved in some cases where the LLC interest (which holds the fine art) is sold and the profit is not distributed to the beneficiary. This could be a significant savings if the beneficiary lives in a high income tax state such as California or Illinois.

Careful planning and the advice of a Delaware CPA, tax attorney and corporate trustee should be sought before implementing any of the above strategies.

The author, Jordon Rosen is a CPA and the head of the Estate & Trust Section at the Wilmington, Delaware CPA firm of Belfint, Lyons & Shuman and can be reached for questions at or at 302.573.3911.


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