Estate Planning for Artists
Myth #1: Although I sell a piece of artwork here and there, I don’t make enough money to have an estate.
You do not have to be wealthy to have an estate. An estate is everything you own, whether it is a beat-up old car, a Lamborghini, or art that you have created. Your estate includes all of the accounts, property, artwork, and intellectual property that you own. While an estate plan helps determine which of your loved ones will receive your stuff, it also allows you to designate who will handle your financial and medical affairs in the event you cannot. Also, if you have a minor child, an estate plan allows you to designate a guardian.
It is also important to remember that while your artwork may not be bringing in vast sums of money now, the value of your artwork could increase after your death. Remember, Van Gogh died poor, having sold only one painting during his lifetime. Now he is regarded as one of the most famous artists, with many of his works valued at millions of dollars.
Question #1: What is the first thing that I can do to create an estate plan?
To create a financial and estate plan to protect yourself, your loved ones, and your legacy, you can begin by creating an inventory to organize your artwork. The list should include pieces that you have sold, to whom they were sold, and the sales price. This information can help value other pieces of your artwork that have not sold, as well as provide a list of potential buyers for your artwork after you pass away. You should also include any pieces of artwork that have been loaned to others. This information will help your loved ones determine who possesses your work and under what circumstances the work will be returned. Your inventory should also include pieces of artwork that have been licensed to someone else. It will be important for your loved ones to know about streams of income and the possibility of them continuing after your death. You may also want to consider including in the inventory pieces of artwork that you have gifted to individuals or donated to charities. This information could provide your loved ones with additional options when looking to distribute your artwork after your death. Lastly, do not forget any pieces of artwork that you have chosen to keep for your own enjoyment.
Question #2: Because I am an artist, should I choose someone with an art background to wind up my affairs or make financial decisions for me if I cannot?
Appointing someone with the requisite knowledge of the art world may make winding up your affairs easier and possibly save some money. However, it is not necessary that your agent under a financial power of attorney, trustee, executor, or personal representative understand every facet of the industry. As the person in charge of managing and wrapping up your affairs, your trusted decision makers can hire the appropriate parties to assist them in carrying out their duties, such as an expert to appraise your artwork, a broker to help sell artwork, and a tax advisor to help with the appropriate tax savings strategies.