The Artist's Estate; Structuring and Managing an Artist's Legacy (Part II)
Feb 23, 2017
Estate planning involves more than drafting a will and good estate planning and administration involves a variety of skills: a collaboration between the artist and his or her advisors.
Over the years that I have been involved in advising artists, writers, and other creators with respect to the planning of their estates, two of the most difficult decisions for many artists is who will be in charge of managing the artist's legacy and the artistic assets left behind and who or what is the beneficiary of the estate's assets- a foundation, a trust or heirs.
As the artist Betty Woodman noted, "It seems there are two things to be concerned about- the wellbeing of the person to whom you give the property and the wellbeing of the property (art)." Many artists are concerned that the family member may not be interested in developing the artist's legacy, or may not be competent to do so, or would be unduly burdened by the obligations imposed upon them to probate and/or manage an artist's estate. For that reason, I found the largely anecdotal article by Robin Pogrebin in the New York Times entitled, "Decision Time for Aging Artists" on January 31, 2017, misses the forest for the trees.
For those charged with structuring and managing an artist legacy, the most difficult choice is not necessarily whether to choose an auction house or gallery to represent the estate. The most difficult choice is who will be named in the will if there is one, or by the court if there is not, to collect and sell the estate's assets, pay the estate's debts and collect any money owed to the estate and administer and manage the artist's legacy, including his or her art, intellectual property, and personal archive.
This is the executor. In addition to these various functions, the executor follows the artist's instructions in the will which may include creating a foundation, selling works at auction, or entering into relations with a gallery. The fundamental duty of the executor is loyalty to the beneficiaries of the estate, or as Peter Stevens, executive director of the estate of David Smith noted, "Choose someone with the most expertise and the least amount of self-interest."
A Visual Artist's Guide to Estate Planning states, "Above all, make your executor and any advisors aware of your priorities; choose people who are knowledgeable about the art world and sympathetic to your work, and encourage them to seek advice from other experts whenever necessary."
A competent and trusted family member should be named as the executor or executrix (the feminine) unless the person has expressed a desire not to be placed in this role or because the person is not competent either by temperament or mental state to be in charge of the artist's estate. All too often there is a tendency to look to an artist's trusted professional advisors, the artist's gallery, the artist's accountant, or the artist's lawyer to serve in the role of executor. Absent very specific factors and conditions, such as long-term professional relationships and the lack of any reliable family member to list a few, a family member should be preferred to these professionals. That family member can then hire competent professionals and advisors, including the artist's gallery. It is at this point where it becomes important to evaluate any long-term artist-gallery relationships, the capacity and commitment of the gallery to working and developing the artist legacy, or the prior long-term relationship held with the gallery.
As auction houses are presently constituted, with their focus primarily on sales of works of art consigned to them by collectors, and for auction or private sales, would not be a first choice to manage an artist's estate or as the beneficiary of the artist's assets. Notwithstanding Sotheby's Amy Cappellazzo's claim: "We're not an auction house […] We're an art business," whether an auction house can transform its culture into the "care and feeding" of artist's estates remains a question.
Galleries, unlike auction houses, do more than sell works of art: Galleries, particularly those who have long-term relationships with older artists, committed to an artist's legacy, may undertake catalogue raisonné; organize exhibitions in the gallery and with museums; prepare publications and archives; and have a strategy which may include buy in of artist's works at auction.
A second major concern for artists is setting priorities as to who will benefit from the assets of the estate. For the artist whose primary mission is to preserve and create a legacy either solely benefiting the artist and his or her professional reputation or the artist's reputation and his or her philanthropic goals, the "artist endowed foundation" may be the vehicle of choice. Such foundation may be a private foundation or a private operating foundation. The foundation must be funded with sufficient assets to fulfil its mission and unless a board of directors dedicates enormous sweat equity, for example the Estate of Ree Morton or the Dorothy Dehner Foundation, less than two million dollars in assets may prove an obstacle.
The difficult choices posed by Ms. Pogrebin are left to the expertise of trustees or directors who are often familiar with the art world and its players. These individuals advise on or hire others to advise on catalogue raisonnés, auction sales, and appraisers. Control, however, rests with those most identified with the artist's interests.
Transactions with both galleries and auction houses who are involved in direct management of estate or foundation assets pose numerous conflict of interest issues which require transparency and oversight. Unlike the conflict of issues which may be raised by direct involvement of a gallery or auction house as the executor, a gallery or auction house may not be absolutely prohibited under state conflict of interest rules from participating. See "The Many Facets of Conflict of Interest" in Ethics and the Visual Arts.
Every artist, however, has an estate plan--either one imposed if the artist dies without a will or one of his or her own careful deliberation and planning. For artists whose oeuvre may not support a foundation or who simply do not wish to create one, the Artist's Legacy Project offers a solution, if the artist is accepted.
Legacy Artists are painters and sculptors whose estates have been accepted by Artists' Legacy Foundation's (ALF) board of directors and entrusted by the artist or artist's heirs to the Artists' Legacy Foundation in perpetuity.
For example, since receiving founder Viola Frey's bequest, the Artists' Legacy Foundation has enhanced her legacy by supporting and promoting the exhibitions at museums and galleries. The website states,
"Beyond facilitating museum and gallery exhibitions, the Foundation organizes, stores, conserves, and insures all of Frey's artwork and is creating a working database to make information about her artwork readily accessible; ALF has commenced a long-term project to produce the Frey catalogue raisonné and is organizing the artist's papers and other archival materials to make them available and accessible to researchers, scholars, and students."
The model for legacy preservation adopted by ALF also serves as a model for artist-endowed foundations.
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* © 2017 Banco de México Diego Rivera Frida Kahlo Museums Trust, Mexico, D.F. / Artists Rights Society (ARS), New York
Barbara T. Hoffman is recognized internationally and nationally as one of the preeminent art, intellectual property, and cultural heritage lawyers. With more than forty years of practice in every aspect of the field, Hoffman has been acknowledged by her peers with leadership positions in the New York City Bar Association and International Bar Association, elected to Super Lawyers, Best Lawyers...