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Following on from the successful Art Business Conference 2016, Peter Wienand shares the notes of his panel discussion on Artists' Estates and the Art Market.
Mary Moore describes a formalised foundation as "another heir with rights and things that will represent it". Is that something you would agree with, and could you say a little more about the ideal framework for an estate and its many possible entities?
What is an estate?
The totality of assets, real and personal, left by an artist at death. It can take on a range of forms, which are dictated by the laws of succession. Unlike other countries, the UK leaves an individual free to determine how to dispose of his/her property - subject to the Inheritance (Provision for Family and Dependants) Act 1975.
There can therefore ba a huge variation, including:
- An intestate estate where the property passes to the next of kin;
- A Will leaving property to named beneficiaries (who may be individuals or legal entities).
The variety is compounded by the range of property to be disposed of, which can include:
- Artworks, finished and unfinished;
- Correspondence and records - part of the 'archive';
- Subsisting contracts;
- Artists' resale right;
- Business interests, e.g. in a company or partnership.
All of which can, in theory, be left to different beneficiaries.
So in conclusion, I completely agree with Mary Moore and I think this is how some foundations see themselves.
The ideal framework? This needs to flow from a thought-through strategy. There is no one-size-fits-all solution.
The structures and forms adopted for the management of an estate, and the individuals selected, should be driven by the strategy and objectives. These are influenced or shaped by:
- The artist's existing profile and trajectory;
- The artist's view of his/her own legacy, and objectives;
- The family and family's expertise;
- Funding requirements.
Why are we seeing so much about artists' estates right now?
- The natural legacy of successful artists;
- The increased interest of artists' heirs in maximising the artist's legacy and/or making more of under-exploited opportunities;
- Art market interest in opportunities, whether or not under-exploited (as evidenced by galleries actively seeking to represent estates);
- Disputes such as Picasso, Oskar Schlemmer, Cy Twombly, Lucian Freud.
How is an estate generally funded?
Sales of works (or authorised) duplicates, loans and exhibition fees, royalties, ARR.
It seems that when artists' estates are in order, their market value is higher - why is this?
The certainty provided by good organisation makes exploitation of commercial opportunities easier to realise - such estates are more able to respond to opportunities.
A key aspect of this is good documentation (hence the value of preserving archives, the catalogue raisonné, etc.).
What happens when artists leave their archives to a museum?
This can enhance the reputation/value of the artist, partly from the profile-raising effects but (in some cases) also by increasing the scarcity value of works remaining available for sale.
What can artists do today to avoid some of the problems of the past?
- Think ahead;
- Establish priorities and strategy or objectives for future;
- Make a Will;
- Consider a letter of wishes;
- Get good advice.
Should a foundation own the intellectual property?
IP can be more easily managed than among a disparate group of heirs, but it depends on strategy and objectives, which is no good if it's important to provide income for the next of kin or artist's partner. Coordinated control has benefits in terms of controlling counterfeits etc.
If you require further information on anything covered in this briefing please contact Peter Wienand ([email protected]; 020 3375 7355) or your usual contact at the firm on 020 3375 7000. Further information can also be found on the Art & Cultural Assets page on our website.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, October 2016