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The devil is in the details in battle over artist's trust

A few weeks ago, the University of Texas at Austin lost its claim to an Andy Warhol portrait of Farrah Fawcett. The actress had left her art collection to the university's museum, but it seems neither Fawcett nor her estate ever catalogued the collection. The museum did not realize it was missing the Warhol work until one of Fawcett's friends pointed it out.

Details can make or break an estate plan or trust. The lack of a catalog or even a list of works meant to go to the museum led to months of litigation and ended up costing the museum a pretty penny. Another example: One of Warhol's contemporaries -- and Texas native -- Robert Rauschenberg, left a detail out of his trust that has resulted in a years-long court battle between his foundation and the appointed trustees.

Rauschenberg died in 2008 at 82. He was a prolific and influential figure in the art world for 60 years, and he amassed a considerable fortune. At the time of his death, his estate was valued at about $600 million.

Not just an artist, Rauschenberg was also a patron of the arts and a philanthropist. He supported emerging artists and gave generously to children's charities and environmental causes. He wanted this work to continue after his death, and that meant establishing a foundation.

According to his will, all of his assets were to go into a trust. The primary beneficiary of the trust would be the foundation. The foundation would continue the charitable work and manage his artworks. He asked three friends -- his assistant, his business partner and his accountant -- to serve as trustees.

It often happens that an artist's work increases in value after the artist's death. It's a simple supply and demand proposition. After Rauschenberg's death, one of his works sold for $11 million. The value of the trust increased exponentially over the next few years. Court documents showed an estimated value of $2 billion or more in March 2012.

The trustees believe they have played a role in growing the trust, and they would like to be paid for their contribution. The problem is, the trust does not address the trustees' compensation. That leaves the matter up to the courts.

We'll continue this in our next post.

Sources: 

Chron, "Late artist's trustees seeking $60 million in fees," Tamara Lush, Jan. 7, 2014

CNN, "Ryan O'Neal can keep Farrah Fawcett portrait, jury says," Ann O'Neill, Dec. 20, 2013

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