Estate Planning and Stolen Art: The Tip of the Iceberg

If you are working with a client who owns art, either as their estate attorney, financial planner, asset planner, or even art appraiser, you should take into consideration they may not have clear title to their art. Not only is there the potential for the loss of the artwork asset (= returned to rightful owner), there are also significant financial and tax implications for the client's estate as well.

Artwork stolen pre, during and post WWII, in particular, or any of the world's wars, can find a new home on your family's wall, after going through auction, private sales, or even a estate sale. Looting and repatriation are coming to light on a daily basis and your client may have inadvertently purchased one or more such works. Auction houses will decline such a work IF discovered in their provenance research. There are sites such as the Art Loss Registry or the FBI Art Theft Program, that record lost or stolen art, although not 100% accurate.

Also, there is no statute of limitations (think Klimt's "Portrait of Adele-Bloch-Bauer [Helen Mirren in "Woman in Gold"]). As a legal and financial professional, you could try the Defense of Laches, but as an alternative, the artwork might be set up in a Will or Trust, donated with the fiduciary disclaiming the artwork and even if the artwork is repatriated, potentially might not increase the taxes on the estate. Finding one stolen work of art may be a red flag and perhaps more lie within the collection. Due diligence on the part of the team - legal, financial and art appraiser, and having a Plan B in place, will potentially keep your client's carefully crafted estate plan from floundering.

* Excerpts taken from Wealth Management by Matthew F. Erkine. ** No legal advice is conveyed here.

#art #artwork #legal #wealthmanagement #planning #repatriation #stolen #trustsandestates #trustsandwills #estatetax #estateattorney