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Lending art and collectibles to museums

Among their many tasks, museum curators are charged with designing exhibitions that are intended to advance academic research and stimulate the public’s interest and knowledge about a particular work, an artist, a group of artists or movement(s) in art history.1

A visitor walking through a museum

Exhibitions often present works of art in novel ways in order to create new thought-provoking narratives about moments and trends in art history. A recent example is Monet/Mitchell, an exhibition that’s toured several U.S. museums in 2022 and 2023. It provides a fresh view of two of the most experimental painters of the 20th century, Claude Monet and Joan Mitchell.

Part of any curator’s challenge in staging an exhibition lies in the fact that even the largest and best-known museums rarely contain enough materials in their own permanent collections to be able to adequately “tell the story” behind the exhibition. This makes borrowing works from other museums, dealers and collectors an inevitable (and expensive) element to staging most exhibitions.

Private collectors tend to be eager to lend works from their personal collections to such shows. While these loans certainly help museums fulfill their educational goals, foster research and drive attendance, they can also be very beneficial to the collector in a number of ways. For example, all the carrying costs2 associated with a work on loan are usually borne by the museum, which can end up saving the collector who’s lending the material(s) thousands of dollars a year in nondeductible expenses.3

Assuming the loan isn’t anonymous, it can provide collectors and their personal collection with an unofficial “stamp of approval” from the museum. This often serves to elevate collectors and their collections in the eyes of the art world elite4 and can lead to a host of positive outcomes, such as:

  • Being asked to participate in other museum shows
  • Being invited to sit on a museum board or a museum committee
  • Being placed on a primary dealer’s client list for fresh works coming to market
  • Being invited to other arts and cultural events

Perhaps the biggest advantage to a collector is that a well-staged exhibition naturally enhances the work’s exhibition history. Exhibition history is an important part of any artwork’s “provenance” (that is, history of possession). Having clear and interesting provenance can help to increase the value of a work, especially if it’s shown at a prominent museum. Most museums are very sensitive to this pricing phenomenon, however, and often require lenders to agree that they won’t sell their artwork for some stated length of time after the loan expires. This is because tax-exempt museums don’t want to be seen, either by the public or by the IRS, as a de facto marketing arm of a for-profit private art collector who’s looking to monetize a work of art in the near future.

It’s important to note: One benefit that’s never available to a collector who lends works to museums is a current charitable income tax deduction. The IRS doesn’t allow taxpayers to claim an income tax deduction for merely loaning works of art to tax-exempt organizations, even for long-term loans. A charitable income tax deduction is available only for irrevocable lifetime donations that have been delivered to the museum in perpetuity.

Considerations before lending


Collectors need to assess whether the requested loan material can survive the trip to and from the museum, and to and from the various venues of the exhibit. Approximately 60% of insurance claims for damaged art stem from handling and shipping mishaps.5 So even if a collector is comfortable with a museum’s fine art insurance coverage, which is designed to pay the collector a dollar amount against successful claims, the collector needs to come to terms with the fact that there’s always a chance a work can be damaged beyond repair while in a museum’s care.

Due diligence on the museum

Collectors are encouraged to make loans only to well- known museums that have an excellent reputation among their museum peers and the art world elite. It’s also a good practice to review the financial health of the museum requesting the loan before committing. Collectors don’t want a museum to be shuttered while their piece is on view.One way to get a sense of a museum’s finances is  to obtain its latest annual federal income tax return: IRS Form 990 (Return of Organization Exempt From Income Tax) or Form 990-PF (Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation). Tax-exempt income tax returns for charities are available on various websites, such as GuideStar, Charity Navigator and These searchable Form 990s and Form 990-PFs generally run about two years behind the current year, meaning these websites won’t have the current or prior year’s tax returns — but perhaps “close enough” information to help guide a collector’s decision.

Due diligence on the exhibition

An exhibition that’s received well by the public can help to increase the fair market value of the works in the exhibit and shed a positive light on a collector’s endeavors. Unfortunately, the opposite can also be true. A show that’s received poorly can cast a negative shadow on the material, the collector and the collection.

In an attempt to safeguard against any negative consequences, collectors are encouraged to ask museums that request materials for exhibitions to provide the following data points before they commit to a loan:

  • Who’s the curator?
  • What’s the theme/story of the show?
  • What pieces from the museum’s permanent collection will be included?
  • What pieces are being lent by collectors?
  • Who are the other collectors loaning works to the exhibition?
  • Why would the loan enhance the proposed exhibition?
  • Will the exhibit travel to multiple venues?

Note that even when a show is scheduled to take place at one specific museum location, it’s a best practice to include language in the loan agreement that states the museum has no right to place the loaned object at any other venue not specified in the agreement or at the disposal of any third party.

Written loan agreement

Loans to museums should be set forth in a written contract that’s executed under the formalities of the state law the parties select to control the agreement. The Art Museum of the Americas (AMA) suggests a sample template6 to its members, but as collectors might imagine, the AMA template is skewed toward protecting museums rather than protecting collectors. What’s important to understand is that, with any loan, collectors are always in the superior bargaining position to demand contractual language that will protect their interests.

Here’s a list of provisions collectors and their legal advisors should consider.



Describe the piece fully and include:

  • Artist name
  • Title of work
  • Date/circa
  • Type/format (for example, painting, sculpture, artifact, digital)
  • Value (to be agreed upon by the lender and borrower)
  • Size
  • Condition (see “Condition report” on the following page)



The length of the loan period should be expressly set forth in the contract, including early termination provisions such as:

  • Lender has the right to terminate the agreement and repossess the material if the safety of the material is jeopardized, as determined by the sole discretion of the lender.
  • Lender has the right to terminate the agreement and repossess the material if the museum is unable to fulfill its commitments under the loan agreement.
  • Lender’s executor has the right to terminate the agreement, repossess the material and immediately sell the material in order to pay estate tax.

Note that it’s common for museums to have the right to terminate a loan agreement if there’s any suspicion about the legal or ethical origin of the material on loan.

Loan termination

The agreement should set forth the rights of each party if the museum cannot locate the collector within a stated period of time after the loan expires. For example, California has a statute that stipulates if a lender doesn’t retrieve work within 25 years of the expiration of the loan, the lender is deemed to have donated the work,7 and title automatically transfers to the museum. Note that borrowers and collectors can change their state’s default rule by inserting different terms in their written loan agreements.

Applicable state law

It’s common for a collector to live in one state and the museum requesting the loan to be located in another state. The loan agreement will be construed under the law of the state that’s specifically designated by the parties in the loan agreement. Collectors should check with their legal advisors to determine which state’s laws best protect their interests.

Change of ownership

It’s crucial to notify the museum if legal title to the material on loan has changed due to a sale, gift or bequest. This allows the museum to return the loan to the correct new owner.

Note that when collector-lenders who are U.S. citizens, green card holders or resident aliens die, and their art is to be valued in their taxable estate, it will be valued at full fair market value, as determined by an appraisal of an expert or experts, under oath. Such appraisals typically don’t provide any valuation discounts due to the terms and restrictions in the loan agreement.8

Since large estates may need to sell the art in order to come up with cash to pay estate tax, there’s often an early-termination provision in the contract that allows executors to request the material be sent back as soon as possible.

If a loan is made by a nonresident alien (NRA), it won’t be considered U.S.-situs property, and it won’t be included in the collector-lender’s taxable U.S. estate.9 NRAs can pass only $60,000 of U.S.-situs assets to heirs before becoming subject to U.S. estate tax on U.S.-situs property. This exemption allows NRAs to contribute to U.S. exhibitions without fear of adverse U.S. estate tax consequences.

Packing and shipping

These crucial terms are usually dictated by the lender and paid for by the museum. Depending upon the material and the owner’s concerns, packing and shipping can be accomplished through a number of different solutions that should be expressly set forth in the agreement and can range from expensive armored delivery vehicles to inexpensive express mail couriers, such as DHL, FedEx and UPS.


Collectors typically demand that the museum fully insure their piece from the time it’s removed from their wall until it’s returned and hung back on their wall (that is, “wall to wall” insurance). They should request a certificate of insurance (COI) from the museum and then have their own fine art insurer review the COI before committing to a loan. Collectors should also ask their own fine art insurance specialist whether it makes sense to continue personally insuring the piece while it’s on loan as a “belt and suspenders” approach to providing coverage. Finally, loan agreements should require timely notice to collectors if there’s a change in a museum’s property and casualty insurance coverage. In such cases, the loan agreement might give a collector the unilateral right to cancel the loan if the new policy doesn’t meet the old policy’s coverage specifications.

Condition report

Legal advisors, together with property and casualty specialists, generally advise collectors to obtain multiple condition reports:

  • Before shipping their items to a museum
  • Upon delivery to the museum
  • After installation at the museum
  • When the work(s) are returned to the collector

Such reports, which detail in writing and through digital photographs a work’s physical appearance at each stage of the museum’s use, will be critical if a work is damaged and an insurance claim needs to be made against either the museum’s or the collector’s insurance policy.

Museum patrons enjoying hanging artwork

Naming rights

Some collectors prefer to remain anonymous. Many, however, wish to be publicly recognized for their efforts by having their name appear in the show’s catalog, written materials and on a plaque next to their artwork for visitors to read. Collectors should set forth their specific naming requirements in their loan agreement.

Display requirements

If a piece requires special safekeeping and handling, such as special light and humidity controls, these requirements should be detailed in the loan agreement.

Intellectual property

If a museum intends to use images of the loaned artwork on its website or in any printed material, the museum should be solely responsible for obtaining reproduction and other-use rights from the copyright holder. Most collectors don’t own the copyrights of the works in their collection. Such rights typically stay with the artist or the artist’s estate, unless the sales agreement between the collector and the artist specifically designates that the work’s copyrights are also being purchased in conjunction with the artwork.

Repair and restoration rights

Most art loan agreements specifically forbid the museum from repairing or cleaning items on loan unless there are extraordinary circumstances that require immediate care to save the items (for example, a museum flood). In many cases, even light dusting and polishing should be specifically prohibited.

Force majeure clause

There are circumstances beyond anyone’s control that might serve as a reason to terminate the loan and return the material to the lender. These events, often called “acts of God,” need to be expressly set forth in writing. For example, collectors might consider adding a provision that allows them to repossess material on loan if there’s a pandemic and the museum is forced to temporarily shut its doors for the expected length of the loan.

Sales clause

Loan agreements often specifically provide that works on loan aren’t being offered for sale and the borrower has no right to sell or transfer legal title.

Donation clause

Loan agreements often specifically provide that works on loan aren’t being donated in perpetuity to the museum’s permanent collection.

In closing

Most loan requests are instigated by museums, although occasionally collectors will contact a museum and offer up a piece to a future exhibit. Curators often tend to be on the lookout for potential material from collectors by staying close to their museum’s collector base, following fine art auction results, and taking note of who the consignors and the successful buyers are  in an attempt to track works in private hands so they can solicit loans in the future. If you’re considering loaning a work of art to a museum, you’ll be in good company. Thousands of pieces are lent to U.S. museums every year, allowing collectors to temporarily share their treasures with the public and the borrowing museum to tell more robust stories. Remember, however, that before you commit to the loan, you should speak with your property and casualty expert and your legal counsel.

To learn more about how we can help you build, manage and protect your art collection, contact your advisor.

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