Sooner or later we all think about what is going to happen after we are gone. This question is just as important to an artist as to any other professional. Using a hypothetical situation, with Ann Artist as the case study, this article explores the legal tools available to help with estate planning. Ann Artist is a reasonably successful artist whose works sell now and who plans to have many more years of working and selling her art. She is represented by a gallery, has a show every year or two, enters competitions and has accumulated a body of work. Now she is beginning to wonder what will happen to all of this after she is gone.

Ann makes an appointment to see a lawyer who has experience with artists' estates. The following interview illustrates the typical questions an artist should ask about estate planning.

Ann's Question:
As an artist, I am concerned about the impact of leaving a studio full of art after I die. What do I need to think about concerning the handling of my property and art work

Answer: Here are three main reasons to plan in advance for your estate as far as your art works are concerned. First, do you want your beneficiaries to maintain, preserve and market your art works in accordance with your wishes?

If you think they are not qualified to carry out your desired plans for the art, or you do not want to burden them with this responsibility, you should consider appointing an artistic executor, a person who is competent to carry out your wish - This person should be someone w ho is familiar with your work such as your agent, dealer or gallery owner

Second, you want to avoid the probate process, which could prevent your art works from being distributed for years. During this process, the works would be confined to storage and unavailable for sale or distribution to intended beneficiaries.

Third, if all of your financial assets (including home equity and life insurance exceed the exempt amount you will want to minimize the federal estate tax burden, which can exceed a 50 percent tax rate. At the time of this writing the exempt amount is $600,000 but pending legislation may raise it to $750,000.

Q: After my death, I would like to have my work continue to be seen and sold. There are a few pieces I would like to have go to specific people. I w ant m! family to benefit from the sales proceeds of my art, although they know very little about the art market and cannot manage the art works without me. What do I need to do?

A: If you family or other intended beneficiaries. is not competent to manage your art works after your death you need to select an artistic executor who is competent. Your artistic executor should know how to maintain the integrity of out art works and preserve their physical condition This per son should be able to exercise judgment in offering the work for sale or placing it in a museum to protect the historical value of the body of work Your beneficiaries can still enjoy the sale proceeds and be able to select certain pieces of your art works for their own use, but they will not be managing your art works after your death. Your estate planning documents need to give y our artistic executor direction in these matters You also need to decide whether the artistic executor or your beneficiaries have the ultimate power in a disagreement over the disposition of the art works Will your artistic executor be merely an adviser to your beneficiaries or the ultimate decision maker? This decision also needs to be reflected in your documents.

Q: How can I avoid the delay and expense of probate for my art works?

A: Probate consists of court supervision of all actions of your executor and entails appraisals and detailed accounts. The probate process only governs art works that you as an individual, own at your death A popular method of avoiding probate is to give your art works to a trust, which you create and manage as its trustee. At y our death, your trust owns the art works Probate is not required if the art works are owned by your trust at your death.

Q: Does creating this trust deprive me of an! tight to control my art Folks or enjoy their sale proceeds?

A: The trustee has the legal right to decide how to manage the art works and their sale proceeds. As long as you are trustee of your trust, you maintain all ownership rights.

Q: What kind of paperwork is required to create a trust?

A: Your attorney will prepare a trust and a deed that transfers your art works into this trust. You will need to set up a bank account for your trust and see that all contracts (with dealers, galleries, insurance and moving companies, etc.) are executed by you as trustee of your trust.

Q: What if I change my mind about how I want things handled?

A: You can change your mind and have your revised decisions incorporated into your trust. Only death prevents you from the ability to change your trust.

Q: I am afraid that my total assets exceed the exempt amount and my estate will have to pay hefty estate taxes. What can I do with my art works to minimize this tax?

A: If you are married, it is possible for you and your spouse to pass along to your beneficiaries up to $1.2 million (or two times the exempt amount) without having to pay federal estate tax. To tax shelter this amount, each spouse must own in that spouse's own name (and not jointly) the exempt amount and each spouse must have a specialized form of trust designed specifically to avoid estate taxes. If your assets exceed the exempt amount and your spouse owns less than the exempt amount, you could give some of your art works to your spouse in order to bring your spouse's estate up to the exempt amount. If you are not married and your assets exceed the exempt amount, you can give your intended beneficiaries gifts of your art works during your lifetime. You can make gifts of up to $10,000 per person per year without incurring gift or estate taxes. In order to reduce the estate taxes that your estate will be liable for at your death, you can give away your art works during your lifetime and your estate will not be liable for the payment of estate taxes on the gifted art works because you did not own them at y our death.

Q: I would like to get started on this right away. What do I need to do first ?

A: Prepare a detailed inventory of your art works with an estimated market value for each piece. Identify any specific pieces you want to go to named individuals or institutions. Write out what you want your artistic executor to do and limits on power that you want to impose.

Following the interview, our case study Ann leaves the lawyer's office happy that she has taken a positive step toward ensuring that her art Works will continue to be seen after she is gone. Estate planning has given her the tools to direct the course of her work into the future for posterity.