Estate Planning for Artists : A Primer

Many of my clients are artists and their estate planning involves unique practical hurdles and intellectual property issues. Artists worry about their creations and how they will fare in the world after they are gone – much like they would their children. This is a legitimate concern and I thought it would be helpful to the artist community to lay out the basic steps for preserving their legacy. This guide is geared toward the visual artist of every level – but applies equally to other mediums such as musical composition, sound recordings and literary works.

Catalogue Your Work 

Either before we draft a will or trust, I encourage my artist clients to inventory their work. This inventory or catalogue can simply be an excel spreadsheet or paper notebook with the following information:

• Image or description of piece.
• Title and date

• Physical location (auction house, studio, home, or gallery)

• Contractual agreements licenses, or royalties.

• Appraised or approximate value

• History of sales

This makes it easy to keep track of the physical location as well as any outstanding contractual obligations. If the artwork is of considerable value, the pieces should be insured. There are many free digital tools online, such as ArtDex.

How is Artwork Treated in Your Will?

Artwork is considered “tangible personal property.” In many simple wills, little consideration is given to how tangible personal property is distributed, even though such property consists of the artist’s own work and/or valuable art collection.

Technically all tangible personal property should be appraised upon the death of the testator, but that is rarely done because there is little monetary value to such items – books, clothes, household goods, furniture, art! Sometimes such items are thrown out, doled out to relatives, or there is an estate sale. As you can imagine if artwork is sold as part of an estate sale, it is likely not being sold for its true worth.

To avoid your artwork being treated like yard sale paintings, you need to make arrangements in your will or trust. As many artists collect or are gifted work of other artists, you also want to clearly differentiate between your own creations and works from other artists, as well as collaborations.

Specific Bequests of Artwork

You should consider any specific pieces of artwork you want to gift to friends or family upon your death. A specific bequest is the gift of a specific asset that is clearly identified and left to a specific person. If the item is not in existence at the Testator’s death, then the bequest lapses and becomes part of the Testator’s residuary estate.

For example, if you sell a painting you left in your will to your sister, your sister does not inherit the proceeds from the sale.

Preservation of Your Artistic Legacy

An important consideration is how to preserve the physical art pieces themselves. Some artists donate all or a portion of their artwork to their alma mater. If this is your wish, it is important to contact the school ahead of time to make sure they can comply with your wishes. Further, if prominent enough, the school may allow you to have input on how your artwork will be used – in an exhibition, at an auction to benefit the school, or simply preserved for educational purposes.

If donating is not your wish or impractical, you can simply create a testamentary trust that is created upon your death. You would name a trustee to take charge of your artwork, literary works, or musical compositions upon your death. This individual could be given wide latitude in deciding how to preserve your works.

What about unfinished works? Some artists prefer unfinished works be destroyed – your preference should be documented.

Sale of Artwork Upon Death 

If, instead, you want your heirs to reap some commercial benefit from your work, then steps should be taken to set up a trust, foundation or LLC during your lifetime or upon your death. This option involves making sure there is enough money allocated for insurance and to properly store the artwork in a studio or storage facility.

Whichever organizational structure is decided upon, there must be an agreement as to how commissions and expenses will be paid. An individual must be appointed to head the foundation, trust or company. This could be a family member or an independent professional. If naming a family member or friend, make sure that they have the authority to hire professionals if needed. For example, you will need to avoid novice mistakes such as the “bulk discount” phenomenon – the idea being that if all of the art in your estate is put up for sale at once, the prices will drop and each individual piece will therefore be worth less.

Much as you would with any asset, you direct how the proceeds from sales of your artwork are distributed to your beneficiaries. Will your beneficiaries receive all the net proceeds outright or in trust? Such beneficiary trusts could be structured to avoid estate taxes on their death and benefit future generations. A bypass trust structure could provide income to a spouse for life and the remainder to children and grandchildren – a popular option for blended families. If an LLC, beneficiaries could share in assets based on their percentage of the LLC interest -without having to parse out artwork.

Intellectual Property at Death

You need to also consider the intellectual property rights in the artwork. Contrary to popular belief, “copyright” is automatic and extends to “original works of authorship fixed in any tangible medium of expression” and lasts for the life of the artist plus 70 years. Copyright vests in the creator at the time the work is made and is distinct from the physical art piece. For example, even if you sell a physical painting, you retain the copyright in the artwork unless you include that right in the sale – in writing.

Copyright includes the legal right to make and distribute copies and “derivative works.” These copyrights can be licensed or assigned permanently or for a limited time. You would not only want your heirs to benefit from such licensing fees or royalties, but control how your work can be used. You could consider granting copyright in one or more specific art pieces to a local non-profit?

Without a will or trust that thoughtfully lays out your wishes, you will have no control over your art at death. It is important to choose the right people to preserve your legacy and give them clear directions. You also want to avoid discord between family members. Remember that Picasso died without a will – and the estate ended up paying $30 million dollars just in lawyer’s fees.