Planning for Collections
Why should attorneys properly plan for collectibles — avoid confusion and lawsuits
i. Inadequate drafting
1. If decedent client owned a valuable gem cut to be fit in a setting, is the gem jewelry that passes under the will to the second wife, or is it an investment that passes under the residuary clause to the children of the first marriage?
2. Estate of Rothko, 77 Misc. 2d 168, 352 N.Y.S.2d 574 (Surr. Ct. 1974). Action to construe the will of famous painter, Mark Rothko, in which he left his residence at 118 E. 95th Street, New York, “together with all the contents thereof” to his wife and, aside from a few specific gifts, the residue of his estate to the Mark Rothko Foundation. The issue decided by the court was whether the bequest of the real estate and all the contents thereof included the more than forty Rothko paintings that were located in the house on 95th Street. Several were displayed, but most were stored on the fourth floor that Rothko claimed on his income tax returns was his part-time studio. Two of the three executors were also directors of the Foundation. The court held the paintings in the house were included in the bequest of the house’s contents. Rothko, shortly after he executed his will and at the request of one of his executors, undertook to inventory his work. He inventoried all of his works, except those located at the house. The court interpreted this behavior to mean that Rothko thought of the paintings in his house differently. Interesting fact: Rothko’s estate, which consisted mostly of 840 of his paintings, was valued at $5,000,000 in 1970 (approximately $6,000 per painting). Thirty-seven years later, in 2007, one Rothko painting sold for $72.8 million at auction at Sotheby’s New York.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.