A common estate-planning tool, the irrevocable trust, is increasingly being used for an uncommon purpose: It allows art owners to reap tax savings by transferring ownership of their paintings or other collectible objects, but keep possession so they can still enjoy them.

First, the tax savings. Property placed in an irrevocable trust, in this case the art, no longer is legally part of an estate, which reduces the value of the estate for tax purposes.

But the tax benefits potentially go far beyond removing the art’s current value from the estate. The art, which legally is gifted to the trust, will be appraised for tax purposes at the time of the gift. The amount of the appraised value above the $14,000 annual exemption from gift taxes will be deducted from the owner’s lifetime combined federal gift-tax and estate-tax exemption (currently $5.45 million). … 

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