As more Arab women invest in fine art, Diana Hamade Al-Ghurair reveals how to protect this new-age asset class
During my recent keynote speech at a gathering of wealth managers and estate planners in Dubai, I spoke about the emerging generation of affluent women in the Arab world and how fine art is increasingly becoming a part of their estate plan. Most guests nodded, some in agreement, some in disbelief, but one thing is certain—this merits a greater discussion.For a long time, older generations of highand ultra-high-net-worth Arab women were known for investing in properties, gold and stocks as a means of financial security. But the new generation has a different palate, with their investment trends reflecting an interest in luxury goods, jewelry and visual art as opposed to traditional asset classes. And these evolving preferences call for a new breed of advisors, who understand and appreciate this paradigm shift.
As a lawyer, I’ve seen a fair share of disputes over art ownership, be it in the form of family business succession planning or divorce battles. I’ve also met clients who have sought advice and assistance about how they can better protect their investments in art and luxury goods, as they feel they aren’t being adequately advised in these areas. The demand for legal services rendered to female art collectors has increased, with a growing interest in fine art.
Most of these women hail from families of art enthusiasts or are artists themselves. For those of us in the UAE, the exciting news is that the country is soon to become a premier jurisdiction for establishing and operating various foundations and trusts. In fact, on-shore financial centers such as DIFC (Dubai International Financial Centre) and the ADGM (Abu Dhabi General Market) are growing in popularity over many off-shore options as jurisdictions of choice.
The UAE offers Islamic Waqf (religious endowments) on-shore as well. The country’s comprehensive legislation that ensures an attractive tax-free regime and strong regulatory framework for trust arrangements has been progressively amended for anyone seeking estate planning in the region. The DIFC hosts the most exquisite art galleries in the UAE because it offers the structures needed to financially and legally sustain and protect them.
For the collection and preservation of fine art and jewelry, women should devise a strategy early on during their acquisitions to avoid potential liabilities when they become a part of their overall estate planning in relation to other assets.
Art ownership through a fiduciary structure can offer significant advantages over direct ownership. It’s essential for art collectors to find the right advisor, fiduciary structure and regulatory environment, so their interests are prioritized over all else.