Part III: Who? Identifying The Participants.
“All the world’s a stage,
And all the men and women merely players:
They have their exits and their entrances;
And one man in his time plays many parts[.]”
~ William Shakespeare’s As You Like It
In addition to making clients face their own mortality, estate planning presents an overwhelming number of decisions to be made by clients, ranging from who gets what, to what should be done, and who gets to be in charge of the process. It is the “who” that is the focus of this entry in the series.
For the most part, artists face many of the same challenges as any client in determining who should be cast in one of the many important roles of an estate plan. However, attorneys and artists need to be aware that there are some very specific issues and additional concerns that need to be considered in designating candidates to serve in the roles of an artist client’s estate plan.
The lingo associated with estate planning can be confusing and overly lawyerly at times. To make sure everyone is speaking the same language, at least for the purposes of this article series, here is a standard list of some of the roles involved in estate planning, along with a very basic definition. Later, we will delve more deeply into a few roles that present unique challenges for artists and their attorneys. We will also discuss an additional role that may need to be considered specifically for artists’ estates.
The Estate Planning Cast List.
• Beneficiaries. Beneficiaries are the people, organizations, and, sometimes even pets, that receive some form of benefit from the estate, whether directly through a will, trust or other estate planning mechanism like a life insurance policy.
• Testator. The Testator is the person for whom a Will is being drafted.
• Personal Representative (Executor). The Personal Representative is the person nominated by the Testator to administer the will.
• Guardian. This is the person nominated by the Testator to provide care for any minor children, or other incapacitated dependents, left behind by the Testator.
• Trustor (Settlor or Donor). The Trustor is the person for whom a Trust is being drafted.
• Trustee. Like the Personal Representative, the Trustee is the person nominated by the Trustor to administer the trust.
• Health Care Agent. The Health Care Agent is the person appointed in a Health Care Director (Living Will) to make health care decisions upon incapacitation.
• Principal. The Principal is the person for whom a Power of Attorney is being drafted..
• Attorney-in-Fact. The Attorney-in-Fact is the person appointed by the Principal in a Durable Power of Attorney to make financial decisions when the Principal becomes incapacitated.
• Foundation Board. The Foundation Board is a team of individuals who are responsible for running a foundation created by the client.
Beneficiaries.
As with all decisions in estate planning, determining the beneficiaries of an estate is an innately individual decision. Most often, people wish to leave the bulk, if not all, of their assets to their children, especially if their children are minors. People with philanthropic inclinations or no surviving family commonly leave their estates to organizations that held significance to them during their life.
Artists not only have to determine who should receive their financial assets, real estate, and tangible property, but they also have to determine who should receive their body of work made up of physical and/or intellectual property and their associated legal rights. Many times it will still make sense to leave those assets to family just as anyone might leave other assets. However, it is extremely common that this is not an appropriate election, and attorneys and artists are encouraged to exercise caution in making this decision.
Many artist clients may be estranged from their families. Greater still are the number of artist clients who feel that family or friends are inappropriate beneficiaries because they do not have an appreciation of or background for comprehending their work. Other artists prefer to leave at least some of their work with museums or other organizations, like universities.
For an artist already working with an organization, for instance a visual artist who has a permanent collection with a museum, this can be a very easy decision. In this situation, the attorney and artist client should contact the organization to ensure the best method for designating the organization as beneficiary. Most organizations will have a planned giving officer and, sometimes, even a curator on staff to assist in this process.
Far more frequently, artists will not already have an established relationship with an organization to which they want to make such a gift. It is even more important to contact the organization in these cases. Although artists hate to hear this, not all organizations are open to receiving all works. Further, not all organizations are appropriate to designate as a beneficiary. I have had artist clients want to designate organizations as a beneficiaries that had no association to their body of work and no capacity to accept, maintain and manage their art. I have also had artist clients try to designate organizations as beneficiaries when the organizations were clearly in financial distress and most likely would not survive the clients. If an attorney discovers that this is the case, it is important to discuss the issue with the client and designate successor organizations if the artist client still chooses to make a designation to the organization.
Estate Planning Administrators –
Personal Representative (Executor)/Trustee/Foundation Board
Whether an artist client uses a will, trust, foundation or any combination in their estate plan, a designation will need to be made for who should administer these estate planning tools. The administrator of a will is the Personal Representative. The administrator of a trust is the Trustee. The administrator of a foundation is the Foundation Board. For any client, it is imperative to make appropriate designations. Ideally, these roles should be filled with people who are competent and can be trusted to carry out the client’s wishes.
Making these administrative designations can be especially challenging for artists. Most clients will designate a spouse, family member, or close friend to serve in these roles. However, for artists, these standard designations may not best serve their estate planning needs. It can be difficult to find a spouse, family member, or close friend who is adequately versed in the business and artistic particulars of the artist’s body of work. Even in those cases where an artist client is married to another artist, their work is usually in two totally different areas of art. I commonly have visual artists married to performance artists or, say, musicians married to writers. It is not difficult to see that a dancer is most likely not familiar with the professional and creative needs of a sculptor.
It is important for artist clients to choose people they feel confident understand and respect their art and are also equipped to navigate the professional landscape of their artistic area. This combination of professional and artistic savvy may not be found in a single person. The best solution may be to select a team to work together in these roles, which can be contrary to what many attorneys suggest for non-artist clients.
When the artist client is unable to designate a qualified individual or even a group of people to fill the various needs of their estate, there is still another alternative. Finding an Artistic Advisor for the estate can be a good solution.
Artistic Advisor.
The role of Artistic Advisor is unique to estate planning artist clients. This is particularly useful for artist clients who do not have other individuals available to make informed decisions regarding their body of work. The artist client can either designate the Artistic Advisor into an administrative role in their estate plan or simply require in their estate plan that their designated administrators and beneficiaries work with the Artistic Advisor before making decisions regarding their art.
As with designating an organization as a beneficiary, an artist client may already be working with an Artistic Advisor. The Artistic Advisor can be an agent, manager, publicist, curator, educator or other professional or expert in the particular area of art. In these cases, bringing the Artistic Advisor into the planning process can be a natural choice. In fact, it is recommended that the attorney contact any such Artistic Advisor currently working with the artist client, as he/she will often be able to provide a more full picture of the artist’s business and artistic assets. Additionally, I always encourage my artist clients to introduce the people they designate as administrators and beneficiaries in their estate plans to their Artistic Advisors.
For artist clients who are not currently working with an Artistic Advisor and whose estates would benefit from having an industry expert advise the other administrators and beneficiaries of the estate, the artist client and attorney will need to make some new connections. For attorneys who do not have current contacts in the particular area of art, contacting arts organizations that the artist client is associated with can be a good first step. These organizations can be wonderful resources for networking into the artist client’s artistic community. In fact, some of these organizations have staff members who can serve in the Artistic Advisor capacity. At the very least, these organizations will be able to connect the attorney and artistic client to individuals or other organizations that can provide further information or serve in the capacity of Artistic Advisor.
Designating an Artistic Advisor can help artist clients gain a level of comfort with their estate plans that otherwise may not be achieved. It is not appropriate in all cases. Artistic Advisors may charge for their participation. However, for those artist clients who are concerned about what beneficiaries will do with their art or have strained family relationships or other reasons for not having appropriate candidates for estate administrators, the Artistic Advisor can be a good solution.
The important takeaway for artist clients and their attorneys is that the decision on making designations for the various roles in an estate plan will often require a deeper discussion and possibly more legwork than for the non-artist client. Both the artist client and attorney may have to look outside of the usual suspects to create the best team to manage and protect the artist client’s body of work.
Part IV of this series will examine the different tools and techniques that can be used in an artist client’s estate plan to best serve their specific needs.
Photo Credits: “Brick”, “Lear”, and “Nurture” all by multimedia artist Jeremy K. Cottrell.
