Preserving Artwork for Future Generations

Some of the most celebrated artists live on through their work after death. But whether you are an artist or a collector, failing to plan for the future of your artwork when you pass away can make it harder to preserve its cultural legacy. It could also lead to protracted and costly legal difficulties for your heirs.

Pablo Picasso, who died in 1973 without a will, offers a prime example. He left seven potential heirs—four children, a widow and two mistresses—to determine the fate of some 45,000 works of art, two chateaux, three other homes and approximately $6 million in cash, gold and securities. It took about six years, 60 meetings and $30 million in fees for lawyers, appraisers, cataloguers and government officials from several countries, including the president of France, to settle Picasso’s estate.¹

Ultimately, lacking an estate plan made meant Picasso did not dictate where his artwork and other possessions went after he died.^2,3 Lack of planning also meant that it would fall to one of his children to help oversee a slew of legal concerns, authentication of some of his works and management of the copyright. When an artist dies, the copyright may be separated from the work of art. Managing the copyright is important to guard against or license use of image and merchandising while authentication maintains the integrity of the artist’s work. Collectively, these responsibilities contribute to the value of the artist’s body of artwork.

Because your art can represent a considerable percentage of your wealth, it’s essential to plan for what will happen to it when you pass away. Here are strategies to consider.

Develop a Governance Plan

For artists, the orderly transfer of cultural works from one generation to the next requires a governance plan that addresses cataloguing, authentication, provenance, licensing, copyright and archiving—all with the purpose of creating transparency and legitimacy of the artist’s work for future generations to learn and be inspired. Without such a plan in place, an artist’s work may fail to be recognized as a cultural asset and instead become a source of acrimony for heirs. In establishing a governance plan for their artwork, artists can also consider the role of an artist’s foundation in preserving cultural legacy. A beneficial by-product of a foundation is the potential to maintain an orderly market in the purchase and sale of the artist’s work. By creating a scholarly inventory of the work and making it publicly accessible, as well as establishing an authentication process and records, an artist foundation instills trust in the market or the artist’s works and may reinforce the value of works by the artists for all who own them.⁴

For collectors, meanwhile, customized governing documents can memorialize the intention for the art, address the financial considerations of maintaining the collection and mitigate the emotional uncertainty around the future disposition of the art. The collector may establish legal structures to own and retain the art, as well as appoint art specialists to advise on the art.⁴   

Donate to Charity

For both artists and collectors, there are significant potential estate-planning benefits to posthumously donating artwork. Upon death, a collector’s estate may donate artwork owned by the deceased to a charity and receive an estate-tax deduction.

Artists will likely find it disadvantageous to donate works while they are alive, since they must also donate the copyright and only potentially receive an income-tax deduction equal to the cost of materials used to create the artwork. Collectors, however, may consider doing so and potentially benefit from an income-tax deduction based on the value of the work.

The Importance of Planning

One of the many lessons we can learn from Picasso’s lack of preparation is the financial benefit of planning where assets go after the owner’s death as well as the importance of maintaining cultural heritage.

It is estimated that approximately $2 trillion of art and collectibles is currently held in private collections and represents approximately 10-15% of UHNW individuals’ balance sheets.^{5, 6} This is exclusive of artwork owned by living artists, so one might only imagine the value of living artists’ artwork still in their  possession. The necessity of an orderly and more transparent overall art market to facilitate this wealth transfer is imperative and demands the discipline and fortitude of artists, collectors, their advisors and subsequent generations to govern and plan responsibly.^{7, 8}

Morgan Stanley’s Art Resources Team can help you make informed planning decisions about your collection when it comes to governance, philanthropy, your estate and more. Connect with your Morgan Stanley Financial Advisor or Private Wealth Advisor for more information about the team or for a copy of the more in-depth report, “The Cost of Superstition: Picasso’s Cautionary Tale.”